Tag: Bush Tax Cuts
The Fundamental Flaw in Republican Economic Cliches
When Republicans aren’t telling us how they want to run government like a business, they bluster on about handling government finances like Americans do around their kitchen table. If they can’t afford something, they don’t buy it. If their credit card is at its limit, they quit charging on it. Blah-blah.
Except this isn’t how either businesses or family finances work. At least, not in my world.
I happen to have a business. And while I do all I can to cut costs, I recognize that if I am to stay in business I simply must spend money. There are minimum levels of expenses that I have to meet: computers and software must be maintained, bills for internet access and domain names have to be paid, and on and on. And when I come up short for these costs, I do what I can to increase revenue.
Any successful business owner knows there is a point beyond which cost-cutting alone solves problems
Any successful business owner knows there is a point beyond which cost-cutting alone solves problems. In fact, to cut beyond those levels can put you out of business. If you cut your staffing or hours or locations so customers are dissatisfied, they will leave you. If you slash spending to the point you’re offering inferior products or services, they will leave you over that. And if you stop paying your staff or overhead, you might as well put out the “Closed” sign and walk away.
The same is true of the fabled kitchen table financials. Sure, you can get by without cable TV and you can cut your auto insurance coverage and you can even start shopping at the Scratch and Dent Food Store. But if all this fails to help you meet your remaining monthly bills, you will probably look at cleaning out the garage onto eBay or Craig’s List, getting a second job, cashing in a low performing retirement account, and whatever else you can think of to bring in more money.
Why do Republicans not know this? Why do they think we can lower the deficit (the urgency of which is in dispute) by cutting spending alone?
I can’t help but summon a picture of Chad telling Chloe they’re going to have to tighten their belts by spending a month this year in Cozumel instead of Capri. Cash flow problem solved!
But here in reality world, we know that if you’re going to stay on track, with your business or your life, when you fall short you find ways to increase the money coming in. Cash flow problem really solved.
Come on Republicans, start solving the problem.
Raising Taxes on the Rich Would In Fact Fuel Job Growth
We’ve all heard the Republican argument that if we continue to keep personal income taxes low for Scrooge McDuck, he will take this personal money he would otherwise pay in taxes and which he could spend on any number of things – a newer car, travel, really, really expensive and delicious june bugs – and invest it in enterprises that produce jobs.
Republicans tells us, as did former Gov. Mitt Romney, “With over 20 million people who are unemployed or who have stopped looking for work, the last thing we should be doing is raising taxes on job-creators, entrepreneurs, and small business owners across America.”
Except they’re dead wrong. Michael Linden, at the Center for American Progress, crunched the numbers.
In the past 60 years, job growth has actually been greater in years when the top income tax rate was much higher than it is now.
For instance, in years when the top marginal rate was more than 90 percent, the average annual growth in total payroll employment was 2 percent. In years when the top marginal rate was 35 percent or less—which it is now—employment grew by an average of just 0.4 percent.
And there’s no cherry-picking here. Pick any threshold. When the marginal tax rate was 50 percent or above, annual employment growth averaged 2.3 percent, and when the rate was under 50, growth was half that.
In fact, if you ranked each year since 1950 by overall job growth, the top five years would all boast marginal tax rates at 70 percent or higher. The top 10 years would share marginal tax rates at 50 percent or higher. The two worst years, on the other hand, were 2008 and 2009, when the top marginal tax rate was 35 percent. In the 13 years that the top marginal tax rate has been at its current level or lower, only one year even cracks the top 20 in overall job creation.
This Week Marks 10 Years Under the Bush Tax Cuts
In addition to being the day that the word “weiner” stopped being naughty and started being tiresome, June 7 was another milestone. According to self-proclaimed “Corporate Person American” William Rice, it deserves commemoration as the 10th anniversary of the Bush tax cuts.
Rice: ‘The Bush tax cuts created the deficit now being cited as a reason to pretty much scrap Medicare and once again make a college education a pleasant, impossible dream among the lower classes’
It was on June 7, 2001, that President Bush signed into law the high-end tax cuts that added $2.6 trillion to the national debt. It was these tax cuts, along with two wars and a recession, that created the deficit now being cited as a reason to pretty much scrap Medicare and once again make a college education a pleasant, impossible dream among the lower classes.
Rice’s modest proposal says that government is for pansies, unless you’re a corporation and in that case, government is here for you.
We expect the government to continue providing certain vital services, of course, such as huge, no-bid defense contracts; and 24-hour, drive-through patent courts for us to fight over the profits of questionably-useful and semi-dangerous but very well-promoted new drugs. But all the peripheral activities of government — such as ensuring adequate childhood nutrition and repairing drawbridges — merely create a strain on the natural ecosystem of corporations and Corporate-Person Americans.
If Republicans continue to run the economy into the ground by refusing to look at the revenue side of the budget equation, Obama will have to borrow Pres. Reagan’s line when he ran for re-election in 1984, but with a slight adjustment: Are you better off now than you were ten years ago?
Cheney Was Referring to the Bush Tax Cuts When He Said, ‘Reagan Proved Deficits Don’t Matter’ – But Even Bush Had Doubts about Them in 2002
Not long after O’Neill left office, author Ron Suskind wrote a book about O’Neill’s tenure as Treasury secretary titled, “The Price of Loyalty: George W Bush, the White House, and the Education of Paul O’Neill.” The book made headlines when it was published in late 2003, because, in it, O’Neill became the first high-ranking official from the administration to say publicly that war with Iraq had been a top objective of the Bush administration from the outset, and that the Sept. 11 attacks had merely provided a pretext for the invasion.
“Haven’t we already given money to rich people? This second tax cut’s gonna do it again. Shouldn’t we be giving money to the middle?”
– Bush in 2002
– Bush in 2002
(It was also around this time that Ron Suskind reported on a conversation he’d had with an anonymous senior White House aide — now universally thought to have been Karl Rove. “The aide said that guys like me,” Suskind wrote, “were ‘in what we call the reality-based community,’ which [Rove] defined as people who ‘believe that solutions emerge from your judicious study of discernible reality.’ I nodded and murmured something about enlightenment principles and empiricism. He cut me off. ‘That’s not the way the world really works anymore,’ he continued. ‘We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality — judiciously, as you will — we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors . . . and you, all of you, will be left to just study what we do.'”)
But the other controversial revelation in Suskind’s book was about the Bush administration’s reckless decision after the 2002 midterms to go for a second round of tax cuts for the rich. In a January 2004 article about the book, Julian Borger wrote in the Guardian:
Verbatim
I was in business for 35 years and nothing happened until somebody bought something. I never based my production decisions on the amount of taxes but did base my decisions upon the likelihood of sales.
— Charley B., a Pensito Review commenter, responding to Republican claims that tax cuts produce jobs, stimulating the economy. Charley, and most of us, prefer the more direct route, which begins with consumer spending. He also notes that if the Bush tax cuts were intended to produce jobs, judging by American unemployment numbers, they were a failure. We admit, though, that the tax cuts did create plenty of jobs in other countries (while the rich back here pocketed their tax savings).
Extending High-Income Tax Cuts Would Balloon Deficit
$3.9 trillion
Amount extending the Bush tax cuts for high-income households would add to the deficit over the next 10 years. The increase would, “slow future economic growth, saddle future generations with sizable interest payments, and leave the nation ill-prepared not only for the retirement of baby boomers but also for responding to potential future crises…”
Verbatim
Remember, the lack of jobs in America today was created by Republicans. What happened to all the jobs [President George W.] Bush’s big tax cuts were supposed to create? Now Republicans want more tax cuts for the wealthy and again say they will create jobs?
— Comment on Jacksonville newspaper web site
Majority Opposes Boehner’s Billionaire Bailout – Wants Bush’s Tax Cuts for the Rich to Expire
A new Gallup poll finds that 44 percent of Americans oppose the “billionaire bailout” — meaning they want George Bush’s temporary tax cuts for everyone who makes under $250,000 to be extended, while returning the tax rate on the wealthy to the Clinton-era rate.
Thirty-seven percent favor House Republican Leader John Boehner’s demand that all Bush tax cuts be extended, including the breaks for the super-rich.
Just 15 percent want all the tax cuts to expire, regardless of income level.
