Friday, September 17, 2010

A Lessening of the Worsening...

Both parties, both R and D are being less than truthful.

  1. Dem's say that keeping rates frozen for another two (2) years for all tax brackets won't make any difference other than robbing the US treasury of 700 billion dollars over ten years.
  2. Repub's say that extending the tax cuts to *all* brackets will create the growth we need, and stimulate job growth by freeing money that now sits on the sideline.
R wants all rates to stay down because they see that if they don't - the recession has no chance of getting better.

D wants to increase tax rates on those with incomes over $250k because they truly believe that will help the economy. Think Keynesian economics.

The truth for R's is that even with keeping all the Bush tax cuts unchanged, they will only get this for a maximum of two years until *guess what* happens? That's right! Obama's re-election bid will be known. Odds are always in favor of re-election... But you remember... Carter... GHW Bush? There are always exceptions. So with the possible re-election of O, most entrepreneurial money (in the +250k bracket) will stay on the sidelines until O is gone, if he gets gone. The only thing propping up the stock market now is interest rates are staying extremely, exceptionally low. If the current O's keep the Keynesian high deficit spending going - all bets are off regarding interest rates, the stock market and '70's style inflation.

The truth for D's is that they keep doggedly missing the point that the Bush year's tax cuts created 8 million jobs during his presidency even though he started out his time at bat with a recession as well. Those same style of tax cuts (across the board) created more than 20 million jobs during the Reagan years. The exact same is true for the Kennedy years. Most of the Reagan years *and* Bush years, as well as Clinton's years were spent with opposing House and Senate Majorities. Tax cuts for the upper brackets have historically created more jobs, and therefore more revenue from higher economic activity in the resulting economic boom, than their costs in lost tax revenue.

One fact is - prior to Bush Tax Cuts the top 1% (of taxpayers) paid 19% of  Federal Income Taxes (FIT) - After the Bush Tax Cuts the top 1% paid 36% of FIT.

If cutting tax rates on those making more than $250k is going to "Rob the Treasury" how was the above possible?

Here are some more facts:
  • the top 2% of our citizenry represent 25% of all consumer spending
  • 5% account for 37% of all consumer spending
  • The top 1% of taxpayers  paid more than 40% of all Federal Income Taxes (FIT) in 2007
  • 47% of households paid 0% FIT in 2009
  • During 2003-2007 the Federal Deficit fell $217 billion (the Bush years)
  • Currently the top 10% of taxpayers pay 68% of *all* FIT collected

IF all tax rates stay the same from the R's defeating the D's (keeping the Bush tax cuts) in this current economic debate, the main effect will be a lessening of the worsening of our economy. And, that's not such a bad thing.

Tell me how *you* feel, or what you think, by clicking on "Comments" below.

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