The tax cuts in 2001 (EGTRRA) reduced income tax rates,
phased out and temporarily eliminated the estate tax,
expanded the child credit, and made other changes. The
2003 tax cut (JGTRRA) reduced rates on dividends and
capital gains. The impact on growth of these changes
appears to have been negligible. First, a cursory look at
growth between 2001 and 2007 (before the onset of the
Great Recession) suggests that overall growth rate was
both mediocre – real per-capita income grew at an annual
rate of 1.5 percent during that period, compared to 2.3
percent from 1950 to 2001 – and was concentrated in
housing and finance, two sectors that were not favored
by the tax cuts. There is, in short, no first-order evidence
in the aggregate data that these tax cuts generated growth.