The Dow Jones is currently at 11,689 points. Today on Fox News, Neil Cavuto featured a segment on whether the Dow’s strength is the result of President Bush’s tax cuts.
Bush’s tax cuts don’t have anything to do with the strength of the Dow. Here are the facts:
— A 2005 study by four Federal Reserve Board economists “fail[ed] to find much, if any, imprint of the dividend tax cut news on the value of the aggregate stock market.” According to a Wall Street Journal article, the study concluded that Bush’s tax cuts were “a dud when it came to boosting the stock market.”
— Analysts at the Tax Policy Center found that the link between capital gains tax rates and stock market growth is “weak” and capital gains have historically risen with “little apparent effect on the stock market.”