The rich got most of the Bush the tax breaks. Yes, they paid most of the taxes, but "Voodoo Economics" was supposed to have the effect of benefits trickling down to the low- and middle-income denizens of this country.
It didn't happen.
What did happen is that the rich got richer because they got most of the tax breaks and own most of the stocks that recovered as industry profits jumped by 42% while real wages for non-supervisory workers dropped (2.6% last month), and low- and middle-income households got squeezed by higher local taxes and fees and higher costs for fuel, food and housing.
Here's how the Wall Street Journal sees the situation:
ECONOMIC RECOVERY TILTS TO HIGHEST-INCOME AMERICANS
... many economists believe the economic recovery has indeed taken two tracks:
Share of dollars saved through 2003 tax cuts by income group Lowest 20% of households 0.1% 20-40 percentile 2.1% 40-60 percentile 7.1% 60-80 percentile 13.7% 80-100 percentile 76.9% [Besides getting 77% of the tax break] wealthier households also have been big beneficiaries of the stronger stock market, higher corporate profits, bigger dividend payments and the boom in housing.
Lower- and middle-income households have benefited from some of these trends, but not nearly as much. Many have been squeezed, with wages under pressure and with gasoline and food prices higher. The resulting two-tier recovery is showing up in vivid detail in the way Americans are spending money.
At high-end Bulgari stores, meanwhile, consumers are gobbling up $5,000 Astrale gold and diamond "cocktail" rings [and] the Italian company's U.S. revenue was up 22 percent in the first quarter. By contrast, such "same store" sales at Wal-Mart Stores Inc., retailer for the masses, were up just 2.2 percent in June. A similar pattern shows up in cars.
Longer-term issues are also at work. Wage and income disparities between the rich and poor have generally been widening for nearly 20 years. In 1980, the top 10 percent of households in income accounted for 33 percent of total household income, according to economist Emmanuel Saez at University of California, Berkeley. By 2000, that had risen to 44 percent.
Mr. Maki of J.P. Morgan Chase estimates that in terms of dollars saved, the top 20 percent of households by income got 77 percent of the benefit of the 2003 tax cuts, and roughly 50 percent of the 2001 tax cuts. And of stocks held by households, roughly 75 percent are owned by the top 20 percent of those households.
The affluent also benefit more from stock dividends, on which the federal income-tax rate was cut last year retroactive to the start of 2003. Higher-income households also are larger beneficiaries of the surge in corporate earnings, which helps to drive dividend and stock returns. The level of corporate profits has risen 42 percent since the last recession, which ended in the final quarter of 2001. Wage and salary income is up just 6.3 percent in that time. [Wall Street Journal 7/20/2004 free with signup here]
They also mention that jobs are being created
... the outlook is still highly uncertain. Payroll employment has increased by 1.5 million since last August. "
but those number isn't as good as it might appear - currently, about 137,000 new jobs have to be created every month just to match the number of new people looking for work. "1.5 million jobs since August" just about covers that. The bottom line is that there are still over 4 million jobs gone missing (read "off shore") during this administration's tenure and there's still no sign that they're coming back.
Article comments
1 - Tom
[yawn]
Your class warefare claptrap is older than the stain on Monica's dress.
Read this:
WASHINGTON, July 13 (Reuters) - The U.S. government posted a larger-than-expected budget surplus in June, propped up by higher quarterly business tax receipts, a government report released on Tuesday showed.
In the Treasury Department's monthly budget statement, June income outpaced spending by $19.14 billion, slightly less than the government's June 2003 surplus of $21.23 billion.
"What we are seeing is the impact of a good economy, the impact of extraordinarily strong corporate profits, and likely the impact of more people being caught in the alternative minimum tax," Drew Matus, financial markets economist at Lehman Brothers in New York, said in response to the report.
"Surprisingly strong receipts are really helping out a great deal here. There is no reason to suspect, given the employment growth we have seen, that this trend will change any time soon," he said.
Corporate income tax inflows grew 38 percent in June, when quarterly tax statements are normally filed, compared to June 2003. Individual tax receipts were nearly 9 percent higher.
The rich got a smaller tax cut as percent of their total income. It's hard to get a $30,000 tax cut when you only make $25,000 to begin with.
Many of those people who 'are rich' are so because they own businesses. That income which is taxed as individual income is actually business income. By increasing taxes on these individuals (and therefore the business) you decrease the liklihood that they can invest in their business to increase productivity and grow and make even more money.
That means fewer jobs created, and a slower growing ecnonomy.
It's terribly sad that in order for your guy to get elected, the economy has to suffer. Well, guess what, it isnt' suffering. And that makes you upset that Americans are prospering?
2 - Tom
And why do you blame tax cuts for the 'middle class squeeze'. Why don't you blame out of control government spending which causes the need for higher taxes.
Read Dr. Walter E. Williams' column on socialism and poverty
There's no complete explanation for why some countries are affluent while others are poor, but there are some leads. Rank countries along a continuum according to whether they are closer to being free-market economies or whether they're closer to socialist or planned economies. Then, rank countries by per-capita income. We will find a general, not perfect, pattern whereby those countries having a larger free-market sector produce a higher standard of living for their citizens than those at the socialist end of the continuum.
3 - Hal Pawluk
The U.S. government posted a larger-than-expected budget surplus in June, propped up by higher quarterly business tax receipts, a government report released on Tuesday showed.
That's what claptrap really sounds like.
The reason for that result in June is because that's when corporations turn in their quarterly tax payments.
This June's surplus is less than last year's June surplus was, and last year the budget deficit set an all-time record.
Even with this good month, the outlook is that Bush will match last year's deficit this year.
Pfui.
4 - Hal Pawluk
And by the way, Tom, I'm really surprised to see you so excited and opposed to a story in the Wall Street Journal, that bastion of big business (not to mention neoconservatism).
Where do you think they got it wrong?
5 - Tom
I'm not debating that, i said the following:
The rich got a smaller tax cut as percent of their total income. It's hard to get a $30,000 tax cut when you only make $25,000 to begin with.
Many of those people who 'are rich' are so because they own businesses. That income which is taxed as individual income is actually business income. By increasing taxes on these individuals (and therefore the business) you decrease the liklihood that they can invest in their business to increase productivity and grow and make even more money.
6 - Tom
Plus I've never met a guy that makes $30,000 give me a job. So please stop inciting class warefare.
7 - JR
I've gotten most if not all of my jobs from people who make between $30,000 and, I don't know, let's say $100,000.
But maybe I'd be doing better if I met more millionaires...
8 - Hal Pawluk
And why do you blame tax cuts for the 'middle class squeeze'.
Just agreeing with the Wall Street Journal that it's a major part of reason for the squeeze. It's a fact and it won't bite - deal with it.
Why don't you blame out of control government spending which causes the need for higher taxes.
That's the Republicans again, and it's deliberate implementation of the Reaganesque "Starve the Beast" economic policy. The idea is to increase spending and cut taxes until there is such a huge financial problem that social programs have to be cut and/or eliminated.
In the meantime, the rich have gotten richer, corporations pay even less in taxes than they do now (Wachovia made a $3.6 billion profit in 2002 and paid no taxes - yes, that's 'billion' and 'profit' and 'no'), and the entire nation will be comprised of "consumers" barely making a living wage.
It's a throwback to the idea of "company towns" through the days of the robber barons, when the workers lived their entire lives essentially owned by the companies (Pullman was an admirable exception to most industrialists).
I'll bet most voters, even Republican supporters, don't think that's what they voted for.
Plus I've never met a guy that makes $30,000 give me a job.
The way things are going, nobody will be able to even get a job paying $30,000 (adjusted for inflation).
So please stop inciting class warefare.
You and Bob Novak and a big, big bunch of millionaires (including the majority in Congress).
It's amazing how income redistribution from the lower end of the economic scale to the upper end is okay, but objecting to that is "class warfare."
Double pfui.