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The Left’s Big Lie About Repealing the Bush Tax Cuts

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As we go into the next round of budget negotiations, it seems quite clear that the Democrat response to every effort to cut spending will be to propose ways to raise revenue, usually by trotting out their well-worn battle cry “repeal the Bush tax cuts!” That will then be followed by describing them as “tax cuts for the rich” which redistribute wealth from the poorest Americans to the wealthiest. But is this true? Are the rich really the largest beneficiaries of the tax structure implemented in 2001 and 2003 by George W. Bush, and who would bear the brunt of additional taxation if the Bush cuts were repealed?

To find out the answers to these questions, all I needed was the handy calculator on my iPhone and a visit to the Tax Facts archive at the Tax Policy Center, which keeps records of all the tax rates and rules going back to the passage of the 16th Amendment.

The first fact which became clear on looking at the data is that the very rich were not the largest beneficiaries of the Bush tax cuts. In fact, their taxes were cut significantly less than the taxes of those in the lowest tax brackets. The top rate was cut by 4.6%, while the lowest bracket was split into three groups and the bottom two of those saw their taxes cut by a minimum of 5% and in many cases by as much as 18%. Those are far greater cuts than any of the higher brackets, even the top bracket.

In addition, with increased values for exemptions and deductions, many of the working poor and lower middle class saw much of their tax liability just eliminated completely. The Bush structure has raised the standard deductions and exemptions for an individual from $7200 to $9500, protecting an additional $2300 in income, which is a big chunk for someone with a low income, and that is high enough that no one in the lowest income bracket actually has any tax liability at all. If the Bush tax cuts were repealed a significant number of the poorest workers would owe 15% on that $2300 in income. Handing people earning below the poverty level a bill for $345 would be just one of the unpleasant consequences of repealing the Bush tax cuts.

So, let’s say that Democrats win this argument and decide to raise taxes. Yes, the rich would pay a little more which they can probably easily afford. But at the same time, almost 20 million people in the category which I would define as the lower middle class, who have gross incomes between about $35,000 and $43,000 (as individuals), would see their taxes increase by 13% if the Bush tax cuts were repealed. These people are the heart of working America and they are the people the Democrats claim to stand up for, but they would be devastated if the Bush tax cuts were actually repealed. They outnumber the members of the top bracket almost 5 to 1, and are much less able to afford a massive increase in their taxes.

So the next time you hear a Democrat politician talking about repealing the Bush tax cuts so that the rich will pay their “fair share,” remember that it was the poor who benefited the most from the Bush cuts, and that if they were repealed they would pay a very large and unfair additional share of taxes which they certainly cannot afford.

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About Dave Nalle

  • troll

    Dave – the democrat mantra is ‘repeal the cuts for the rich – keep the cuts for the poor’ for the basic reasons you point out…the rich can afford a repeal while the poor cannot

  • Troll 2

    Dave – The Bush tax cuts were designed by Republicans to have already expired anyway. Can you explain why doing just that would be “Democrats [deciding] to raise taxes”. Thx,

  • Troll 3

    Dave – These are some funny numbers you have here. The current six rate brackets of 10%, 15%, 25%, 28%, 33% and 35% will be replaced by five new brackets with the higher rates of 15%, 28%, 31%, 36% and 39.6%.

    Where do these increases of 13-18% come from?

  • http://www.republicofdave.com Dave Nalle

    Dave – The Bush tax cuts were designed by Republicans to have already expired anyway. Can you explain why doing just that would be “Democrats [deciding] to raise taxes”

    No, they weren’t designed to expire. They were passed with the option of expiring if they were not renewed as a concession to Democrats to get more votes in support of them. The intent of Republicans would be that they would be renewed or made permanent.

    Dave – These are some funny numbers you have here. The current six rate brackets of 10%, 15%, 25%, 28%, 33% and 35% will be replaced by five new brackets with the higher rates of 15%, 28%, 31%, 36% and 39.6%.

    Where do these increases of 13-18% come from?

    The site with the various tax rate schedules is linked to in the article. Those increases result from the difference in rate applied to groups whose tax bracket would change. There are two groups on the low end of the brackets who would be reclassified into higher tax brackets in addition to having the rates for those brackets go up slightly, so rather than just being hit with the 3% increase from 25% to 28% they would be reclassified from either 10% to 28% or from 15% to 28% because many of those currently in the two lowest brackets would be consolidated into a larger bracket at a higher tax rate.

    Dave

  • http://www.republicofdave.com Dave Nalle

    And as far as just repealing the tax cuts for the “rich” then you’re not repealing the Bush tax cuts, you’re implementing a new set of taxes and you’re raising taxes. Let’s be honest about it.

    Dave

  • http://handyfilm.blogspot.com handyguy

    OK, no problem, I’ll be honest about it: let’s raise taxes on the rich. They can afford it, and no serious, fair deficit reduction proposal can set tax increases completely off the negotiating table, as Ryan, Boehner and McConnell want to do.

    I’d let all the tax cuts expire, and yes, that would affect some middle class taxpayers. The Dems won’t go there, and politically it’s an understandable call. But Americans made it through the 90s paying those rates, without harm to the economy or to individuals, and we can do so now.

    The president’s speech today was a good one. It should become known quickly as the “not while I’m president” speech. That’s a phrase that cuts two ways, of course, but in context it showed a Democrat willing to stand for something [the inherent social promise/contract of Medicare and Social Security].

    Ryan, looking all “you hurt my feelings, Daddy,” of course accused the president of making a campaign speech. It was…and it was also an honest and balanced policy statement. They are not completely incompatible, although one can understand why a Republican accustomed to take-no-prisoners rhetorical hyperbole might not recognize the fact.

  • http://pajamasmedia.com/blog/author/danmiller/ Dan(Miller)

    Re comment #6 — It wasn’t just a “good” speech. It was a great speech and probably even the highpoint of his presidency. I said so here; credit where credit is due. Even Vice President Biden was mesmerized.

    Dan(Miller)

  • Glenn Contrarian

    And that’s why I hold Dan M. in high regard – he’s one of the few here who’s not afraid to give credit to the other side.

  • http://www.roblogpolitics.blogspot.com RJ

    The whole argument about “tax cuts for the rich” or “tax cuts for the wealthy” is a misnomer anyway. We don’t have a wealth tax in the United States. We have an income tax. So it’s really “tax cuts for high income earners.” That’s the accurate way to describe cuts to the top marginal tax rate.

  • http://pajamasmedia.com/blog/author/danmiller/ Dan(Miller)

    Dear me, Glen. I somehow have an intuitive sense lurking somewhere in the deep recesses of what might conceivably pass for my befuddled mind, twisted though it is, that perhaps you may not have read the linked article with the very greatest of care.

    But thanks.

    Dan(Miller)

  • http://handyfilm.blogspot.com handyguy

    Whatever words you choose to describe them, the highest-earners have gained enormous ground in the last thirty years, and especially in the last decade, while the middle class and the poor have stagnated or slipped. In other words, there has been a ‘transfer of wealth’ all right: upward.

    Most rich folks and high earners are OK with returning to the Clinton marginal tax rates. Quite a few could even live with a ‘millionaire’s tax,’ a new higher rate for the highest of high earners.

    I’m not sure where the conservative rigidity on taxes comes from, but in this case it is way out of step with public opinion.

    The Ryan plan — gigantic tax cuts coupled with forcing the elderly and the poor to pay more for health care — is politically insane. How could you honestly expect the Dems not to capitalize on this low-hanging fruit?

  • Dan

    “I’m not sure where the conservative rigidity on taxes comes from”—handyguy

    It’s called principle. It also stifles economic activity thus hurting everyone. Liberals, in their greed and envy have never understood this. Or being principled for that matter.

  • http://handyfilm.blogspot.com handyguy

    I read Dan’s ‘article,’ if that’s the word. His main objection, other than the fact that the president is not now and never will be a conservative ideologue like Dan himself, seems to be to a lack of specificity about defense cuts and Social Security and tax changes.

    Has there ever been a presidential speech, by a chief exec from either party, that offered granular specificity in this situation? The idea is to lay out a blueprint: while Paul Ryan avoided defense cuts entirely and was mostly mum on Social Security, the president said he would follow Gates and his own appointed deficit panel from last fall in determining significant Pentagon cuts and Social Security revisions.

    By daring to, gasp, defend and propose expanding the Medicare cost-cutting provisions in his own healthcare bill, the president draws only an eye-roll and a giggle from Dan: oh that again? Why, it’s just a joke, so unpopular! This is not exactly an argument, just an ideological stance. But that’s all the GOP has ever offered about the healthcare bill: it’s just so awful, where to begin?

  • http://handyfilm.blogspot.com handyguy

    I don’t usually respond to the writer of #12, but I’ll say this: the elder Bush and Clinton both raised taxes, and the booming 90s came immediately after. The younger Bush cut taxes, and the droopy 2000’s followed — turning into a scary panic and recession at the end of the decade.

    And yes, JFK and Reagan cut taxes — from much higher levels than now — and growth resulted. But it’s not a mystical magical formula.

    Taxes are just one piece of the puzzle. They are just a tool. Hiding them away and refusing to employ them is foolish. It’s putting ideological blinders on, tying a hand behind your back.

    A reminder: Obama hasn’t raised taxes [yet], he’s mostly cut them, both for individuals and small businesses. [A third of the stimulus bill conservatives spit on was composed of tax cuts.] Any tax increases would come in 2013 and after.

    If the deficit and debt are such an urgent problem, then stop pretending it can be solved without revenue increases. It certainly isn’t just “leftists” who agree with me. About 80% of the public favors a millionaire’s tax.

  • Dan

    The Bush tax cuts yielded a flood of increased revenue. Look it up. It’s not mystical to anyone who understands the Laffer curve.

    One “piece of the puzzle” that hasn’t been tried yet is spending cuts. I don’t think it would be mystical or magical to expect that spending cuts would reduce the need for revenue.

    A bigger problem for spoiled entitlement seekers is that the rich don’t have the money. As economist Walter Williams recently pointed out:

    “If Congress imposed a 100% tax, taking all earnings above $250,000 per year, it would yield the princely sum of $1.4 trillion. That would keep the government running for 141 days”

    But that is a static scenario. In reality, it would wreck the economy and produce less revenue. So 80% of the public favors a stupid solution.

  • http://handyfilm.blogspot.com handyguy

    The ‘flood of revenue’ did not prevent the budget surplus from turning into a deficit. If the deficit matters now, it mattered then.

    Nor did this magical mystical [and possibly mythical, see below] flood of revenue result in the sustained growth of good-paying jobs, or in increased prosperity for those not in the top 10% of earners.

    Inflation-adjusted median household income was flat or slightly down in 2007 compared to 2000 [end of one boom compared to end of previous boom], which had never happened before in the post-WWII era.

    Interestingly, when I did look up the Bush tax cuts’ revenue effects, I found two similar articles with opposite conclusions, both set up as debunking the myths from the other side.

    They make interesting reading. They also make it clear that if you torture numbers enough, they will tell you exactly what you want to hear, thus reinforcing your pre-existing tunnel vision condition. [Both were written after the 2006 election but before the 2008 financial panic/collapse.]

    Pro-tax-cuts [Heritage Foundation]

    Anti-tax-cuts [Center on Budget and Policy Priorities]

  • http://handyfilm.blogspot.com handyguy

    And the kinda-dumb 100% tax hypothetical has a correlative of course: if cutting tax rates always increases revenue, why not cut taxes to zero and get infinite revenue?

    Taken together, the two hypotheticals ought to effectively illustrate the limits of cast-in-concrete ideological positions. I’m not holding my breath.

  • http://www.RoseDigitalMarketing.com Christopher Rose

    It is actually pretty easy for anyone, individual, small business or large company to legally minimise their tax bill by legitimate tax avoidance – not illegal tax evasion – methods.

    Given how easy it is, I’m surprised that more people don’t do it.

    People who are opposed to big government would presumably see it as their patriotic duty to offshore themselves in order to force reductions in government!

  • http://www.republicofdave.com Dave Nalle

    Handy, I have to say to you what I say to other conspiracy theorists. Show me the causal relationship between raising taxes and economic upswings. You can’t, because there isn’t one. You’ve got a couple of anecdotal coincidences and no substance to your argument.

    Dve

  • Glenn Contrarian

    Dan –

    I guess that’s what I get for taking your words at face value.

    And btw, exactly how does one balance a household budget by slashing the breadwinner’s income?

  • http://handyfilm.blogspot.com handyguy

    My point was not that tax increases caused growth, but that they did not prevent growth — and they did help lead to the first budget surplus in decades. [This is not anecdotal, it’s what happened.] And the surplus was then squandered by the brilliant tactic of combining two wars with big tax cuts.

    [Which did not lead to healthy, sustained growth, just another boom/bust cycle, the worst in decades. Was the dot-com boom/bust ’caused’ by Bush Sr’s and Clinton’s tax hikes? Was the 2005-2008 boom/bust ’caused’ by Bush Jr’s tax cuts? You can’t have it both ways.]

    Calling me a conspiracy theorist is pretty rich. I’m allergic to all the conspiracy spinning around here, a prime example being your pasting of “Left’s Big Lie” on anything you disagree with.

  • http://pajamasmedia.com/blog/author/danmiller/ Dan(Miller)

    Glen, re Comment #20, I guess if one views the government as the breadwinner, it all hangs together. That strikes me as a strange way of looking at things, but so be it.

    Handy, re Comment #13, I am far from surprised at your reaction. President Obama’s speech would have made a fine campaign speech; perhaps that what he intended it to be. He appealed to his ideological base, offended many others and that’s about it. Even the Washington Post appears to say so. As a way to move forward on actually reducing the deficit, it was anything but a useful speech. Deficit reduction negotiations will be with the opposition, which now has a significant majority in the House, to at least as great an extent as they will be with his ideological base. Even though former Speaker Pelosi says that elections shouldn’t matter so much, they sure did until the 2010 upsets and elephants rarely forget.

    President Obama opened his speech with an attack on Republican policies. I haven’t done a word count but the linked Washington Post article observes: In the speech, he used as many words to attack the GOP proposal as to lay out his own . . . . Even as he savaged the GOP proposal, Obama was less than specific about his own. He did not say exactly how he would reform how corporations are taxed, what he would do to achieve a simpler tax system or which defense programs he would cut. On Social Security, he not only didn’t announce a proposal but would not say whether one was likely to be included in the final legislation.

    Whatever good President Obama may have done during negotiations on a continuing resolution for the remainder of fiscal 2011 he eviscerated through his speech on April 13. As noted by Howard Kurtz of the Daily Beast, In his eat-your-peas speech Wednesday, President Obama excelled at eviscerating the GOP budget plan as slashing away at worthy programs and leading to “a fundamentally different America”–one that would screw everyone from college students to Medicare patients who would get cheapo vouchers. . . . But when it came to his blueprint for slashing the deficit by $4 trillion over 12 years, Obama painted in the broadest strokes. . . . The president closed with an appeal for Reagan/O’Neill bipartisanship and a paean to messy democracy. But by limiting his pitch to general themes, by failing to fill in the blanks, he ensured that it will get even messier. Once again, Obama is taking the high rhetorical ground while largely leaving the details to others.

    President Obama hardly set the stage for non-ideological, non-theatrical future negotiations. As Clive Crook of the Atlantic noted, My instant unguarded reaction, in fact, was to find it not just weak but pitiful. I honestly wondered why he bothered. . . . The speech was more notable for its militant–though ineffectual–hostility to Republican proposals than for any fresh thinking of its own. It was a waste of breath.

    It’s sometimes difficult for me to agree with a bunch of Libruls, but as to the absurdity of President Obama’s speech I do.

    Dan(Miller)

  • http://handyfilm.blogspot.com handyguy

    I view it quite differently: Paul Ryan and Pres. Obama have laid out very clear markers for negotiating positions.

    If Obama’s message was in part a reassurance to his base, was Ryan’s an outstretched olive branch to moderates and liberals? Certainly not. It was an ideological shot across the bow [“this is a cause, not a budget”], and answering it in kind was appropriate.

    But while the message was clear, the president’s tone was far from harsh or abrasive. He outlined his position with crystal clarity and logic, as calmly and reasonably as a first-class law lecture. The specifics, as they always are in this kind of presidential address, were left to negotiating legislators. He set the framework, and he did so brilliantly.

    The fact that a few whiny liberals objected only makes his position stronger.

  • http://handyfilm.blogspot.com handyguy

    James Fallows’s rebuttal to Clive Crook’s bitchy broadside, also in the Atlantic, is worth looking at, highlighting some of the best moments in the speech. Amusingly, they are some of the same sentences that most appalled Dan M. Not surprising: when would Dan ever admit that a “Librul” had made an effective argument? When Panama freezes over, I imagine.

  • http://handyfilm.blogspot.com handyguy

    Referring to Clive Crook as a liberal is also amusingly off-base. But if you enjoyed the tart-tongued Brit’s dismissal of the Obama speech, you might also want to check out his evisceration of Paul Ryan’s proposal. Equal opportunity snottiness.

  • Dan

    “The ‘flood of revenue’ did not prevent the budget surplus from turning into a deficit.”—handyguy

    I didn’t say flood of revenue. I said flood of *increased* revenue. That was the point. Increased revenue, increased market activity, and job growth all followed the Bush tax cuts.

    “if you torture numbers enough, they will tell you exactly what you want to hear.”

    If you wanted to “hear” that tax cuts contributed to the deficit even though revenue increased after the cuts, then you would have to believe that revenue would have magically increased even more without the cuts. That would be a hard case to make.

    “And the kinda-dumb 100% tax hypothetical has a correlative of course: if cutting tax rates always increases revenue, why not cut taxes to zero and get infinite revenue”

    You miss the point entirely. I’m not making a Laffer curve argument here. The point is that the rich (everyone earning over 250k)do not have the money to cover Obama and Democrats lunatic spending. If you take all of it, it’s not even close to being enough.

  • Cannonshop

    It’s not about revenue or deficits, Dan. (#26), it’s about power and control, and a perspective that very much presumes Uncle Sam is the Breadwinner.

    In the Leftist World, your labour is a public resource to be distributed as the Enlightened Elite see fit, using the dialectics of Marx and Engels as a guideline, and you should not want/aspire to/or possess more than the philosopher-kings deem you need, based on the requirements of “Society”.

    In short, you’re a serf, and it’s immoral to refuse your betters their entitled right to distribute the fruits of your labour as they see fit.

    Once you understand that THIS is what the Democrats are about, it’s a lot easier to understand what kind of thinking you’re dealing with-for instance, how (in spite of empirical evidence to the contrary) they can believe that spending has no impact on the deficit, but cutting taxes is ‘subsidizing’ private interests at the public cost, and entirely the cause of deficits.

  • http://www.gwbush.blogspot.com RJ

    “Has there ever been a presidential speech, by a chief exec from either party, that offered granular specificity in this situation?”

    Dubya was pretty specific in 2005 about the Social Security reforms he wanted to make.

  • http://blogcritics.org/writers/dr-dreadful/ Dr Dreadful

    I didn’t say flood of revenue. I said flood of *increased* revenue. That was the point. Increased revenue, increased market activity, and job growth all followed the Bush tax cuts.

    “Flood of revenue” and “flood of increased revenue” are the exact same thing. The latter phrasing is tautologous, that’s all.

  • http://handyfilm.blogspot.com handyguy

    The president’s proposal yesterday was $3 of spending cuts for every $1 of tax increases. He’s not pretending that tax increases will solve the problem alone.

    And it’s not Obama-originated programs that are causing the biggest deficit bulge. It’s the coming retirement of the boomers, added to the steady increase in the cost of health care.

    The president’s health reform bill of last year, so hated by conservatives, contains elements designed to curb health cost increases. Its target of $500 billion in Medicare savings was used by the GOP in campaign ads attacking Democrats last fall. Now Ryan has proposed far, far deeper cuts than that, not by addressing costs but by cutting back on coverage.

  • http://handyfilm.blogspot.com handyguy

    And let’s talk about those “floods” of revenue.

    Govt receipts went up every fiscal year from 1984 through 2000 [down in 1983, then back up]. Then:

    2000: $2,025 million
    2001: $1,991
    2002: $1,853
    2003: $1,782
    2004: $1,880
    2005: $2,154
    2006: $2,407
    2007: $2,568
    2008: $2,524
    2009: $2,105
    2010: $2,163

    So the first 3 years of the Bush tax cuts [fiscal 2002, 2003, 2004], revenue was down. The budget went from surplus into deficit in FY2002. The biggest spike in the deficit occurred in FY09, Bush’s final budget, when revenue decreased by $400 billion and spending went up $535 billion.

    [Not all the receipts are from personal income tax, of course. And the performance of the economy is a bigger factor than the tax rates per se.]

  • http://handyfilm.blogspot.com handyguy

    Those are billions, not millions, sorry.

  • Glenn Contrarian

    handy – don’t you get it? The Republicans really know how to run a household! Slash the income of the breadwinner, and all of a sudden MORE money will be coming into the household! Doesn’t that make perfect sense?

  • http://www.gwbush.blogspot.com RJ

    It’s a false analogy, Glenn.

    If you cut the salary of a family’s breadwinner, then you’ve cut their income. No exceptions. If s/he was making $40,000 a year and now s/he’s making $30,000 a year, s/he’s just lost $10,000 in income. It’s a static sort of thing.

    Tax revenue is different, because it isn’t a fixed amount. Instead, tax revenue is based on a percentage of economic activity (personal income, corporate income, capital gains, etc.). That’s how you can have federal revenues go from $1.88 trillion in 2004 to $2.41 trillion in 2006 without tax increases. Economic growth allowed tax revenues to rise without a tax hike.

    Tax revenues can also increase even after a tax cut. We can see this by comparing government revenues in 2000 (before either of the Bush tax cuts) to government revenues in 2007 (after both of the Bush tax cuts). Revenues in 2007 were more than $500 billion dollars greater than they were in 2000. How? Economic growth. And lower tax rates, ceteris paribus, lead to greater economic growth.

  • http://www.republicofdave.com Dave Nalle

    Notice the silence, RJ.

  • troll

    And lower tax rates, ceteris paribus, lead to greater economic growth.

    …what things might be unequal and lead to the failure of this relationship?

  • http://thingsalongtheway.blogspot.com/ Cindy

    RJ and Dave…

    “In a detailed look at the Bush tax cuts in the current issue of Bloomberg Businessweek, Peter Coy writes:

    They were supposed to promote long-term growth by realigning incentives. On that score their legacy is hard to measure because there’s no way to know how the economy would have fared without them. Many companies instituted dividends to take advantage of the tax break, but whether that induced more investment is unclear. What’s indisputable is that deficits grew while the U.S. economy rumbled along in slow gear: Growth averaged 2.3 percent a year from the end of the 2001 recession through December 2007, at which point the economy tumbled into the worst downturn since the Great Depression.

    I agree there is no way to know for sure how the economy would have fared without the tax cuts. But the evidence we have does not suggest the cuts were especially good for growth.

    The expansion that began in 2001 and ended in 2007 had average annual economic growth of 2.7 percent. That was the slowest of any expansion since World War II.” (link)

    Here is a question for you both. Why is it that beautiful buildings, furniture, and goods were once made and now all we have is cheap crap that doesn’t last and often never works in the first place? Now the quality that was once standard to everyone is considered premium and not affordable o most. Quality has been replaced with cheap crap and capitalists have taught us to become used to this. Business is directing the market and normalizing what is acceptable. This is in direct contrast to Libertarian claims about how the market works.

  • Dan

    “”Flood of revenue” and “flood of increased revenue” are the exact same thing. The latter phrasing is tautologous, that’s all.”—Dr. Dreadful

    Typical selective pettiness. Less obsessive readers will note that the word “increasing”, in this instance, is used as a modifier to distinguish the “increasing” flood from just your average run of the mill flood. Poor phrasing choice perhaps, tautologous no.

    Ironically, I would like to see the rich parted from their money as much as envious lefties would. The difference is I would like to see it remain in the private sector where I can have a fair shot at it, rather than see it confiscated and distributed to Democrat constituent groups.

  • Boeke

    12 – Dan

    “It’s called principle.”

    No it’s not, it’s called THEORY. You have a THEORY about how things would work if YOU could just get your way. You seem to ignore that many people will suffer from your THEORY and that you yourself will be enriched. Gee. Really?

    Your THEORY is no closer to being a principle that the worst excesses of the soviets.

  • http://handyfilm.blogspot.com handyguy

    Objecting to either tax cuts or tax increases on the basis of inflexible ‘principle’ is the problem. It’s equivalent to treating policy as religion, with laws that can’t be broken. This applies to ideologues on both left and right.

    When tax rates are high, lowering them can be one tool for increasing economic activity. But this is not a time of high taxation. [Claiming that taxes are historically high now is the right’s current Big Lie.]

    From the AP this morning:

    The Internal Revenue Service tracks the tax returns with the 400 highest adjusted gross incomes each year. The average income on those returns in 2007, the latest year for IRS data, was nearly $345 million. Their average federal income tax rate was 17 percent, down from 26 percent in 1992.

    Over the same period, the average federal income tax rate for all taxpayers declined to 9.3 percent from 9.9 percent.

    We’re actually in an era of historically low income taxation.

  • Kudzuisedible

    Re # 17, at Handyguy, your good observation on the negative consequences of a zero tax rate (obviously zero tax rate means zero government revenue) does not make amends for your general leftist moonbattery, eg. ascribing any positive value to any and every Obama lie. Were you not a besotted leftist, you might have raised the point, what is the tax rate that yields the most long-term government revenue? Leftists are not interested in the answer, because they tax to create “fairness” by punishing those who create wealth. But the answer is interesting. Given the huge increase in revenue from the Bush tax cut, and from the Reagan tax cut earlier, and from the Kennedy tax cut back in the ’60’s, all of which helped pay for wars and new entitlements (guns and butter) rather than reduce the deficits, an optimal tax rate is lower than current rates. The optimal rate must allow for rapid, sustained growth of the private sector, while siphoning off the maximum “take” for government that does not stifle growth. I think a flat rate of about seven percent of GDP (for local, state, and national governments combined) is about the optimum level. Spending simply must be cut to a level that matches available income at the optimum lower tax rate. Then, as the nation’s GDP rises at sustained rates hitherto undreamed of, the revenue from even such a modest tax rate eventually exceeds the revenue which would have been realized under current rates. From then on, the same sane tax policy would yield huge revenue increases until the overall revenue, over many decades, would dwarf what we can reasonably expect for our future under the stifling tax increases enacted under Clinton or envisioned under Obama. The regressive taxes demanded by “progressives” actually reduce, long term, the money available to fund progressives’ utopian socialist spending proposals. Receivers of government entitlement are cheated, long term, by liberals’ penchant for over-taxing “the rich” in counterproductive class warfare. You are your own worst enemy.

  • http://handyfilm.blogspot.com handyguy

    That is a fascinating mental exercise, Mr Kudzu, but since no one has ever come close to trying it, it remains completely hypothetical.

    Meanwhile, the human costs of immediately chopping social services to the level required by 7% total taxation would be very, very real. Would you simply accept the pain and misery of the poor, the elderly, the unemployed, as the price for your false Utopia? Actions have consequences; acknowledge and own up to them.

  • Dan

    Most often, the perceived “pain and misery of the poor” is the consequence of actions.

    Principle is not a theory. You either believe in confiscation of other peoples money by threat of violence, or you do not.

    Whining about the suffering of the poor gets a little thin when the poor are obese and illegal, and the whiners cannot accept the empirical evidence of supply side economics.

    It’s as if they can’t think in the abstract.

  • Desert Rat

    Notice the silence, Cindy

  • Boeke

    43-Dan says:

    “You either believe in confiscation of other peoples money by threat of violence, or you do not.”

    So how do you feel about confiscating someones house with the sheriff?

    How do you feel about “Robo-signing”?

    Etc., etc.

    And, while we’re at it: how do you feel about killing a wedding party in Afghanistan?

  • http://handyfilm.blogspot.com handyguy

    #43 – The ‘obese and illegal’ line tells us a lot about the depth and quality of the writer’s thinking, whether abstract or concrete.

    The ten million or more children going to bed hungry tonight, in the US alone, thank him for his kind words. It’s great to know that if we just cut the taxes of multimillionaires to 7%, everything will soon be just peachy, thanks to the mystical magic of trickle-down economics.

    [By the way, multimillionaires currently pay an average of about 17%, with remarkably little trickling going on.]

  • http://thingsalongtheway.blogspot.com/ Cindy

    Oh Rat, I expect Dave and RJ are just busy–probably out eating somebody’s children or something. I’m sure they’ll come around some time. ;-)

  • Cannonshop

    #46 Handy, one must wonder how they’re managing to go to bed hungry with AFDC, WIC, State programmes, food stamps, etc. etc.

    I mean, seriously, when the Taxpayers are paying benefits through SSI to drug addicts in the cities, how is it that these vast programmes can’t feed ten million kids?

    Could it, perhaps, be the fault of…their parents and/or case-workers?

    Perhaps because the ‘legal adults’ in charge of said kids, are selling their food-stamps for cash to buy things that are patently unhealthy (like, say, smokes, booze, gambling?)

    Do you honestly believe that increasing the funds dispersed in such a manner is going to end, rather than encourage, the behaviours that are endangering those kids?

    Seriously believe it??

  • zingzing

    can you buy booze and cigs and “gambling” with food stamps? if so, i’m getting me some food stamps somehow.

  • http://handyfilm.blogspot.com handyguy

    What I ‘seriously believe’ is that Cannonshop’s comment has more to do with his own prejudices than with reality that he has lived or observed.

    As if living on welfare and food stamps is just a jolly party! I wouldn’t want to have to live such a life, and neither would Cannon.

    By the way, not nearly everyone who qualifies for food stamps signs up for them.

    But a 7% tax rate would require getting rid of even the current inadequate programs we have.

  • http://blogcritics.org/writers/dr-dreadful/ Dr Dreadful

    can you buy booze and cigs and “gambling” with food stamps?

    No, or at least you’re not supposed to be able to. In the days when they actually were stamps, an unscrupulous store clerk might have slipped you some and put the sale down as groceries, but these days most states use a debit card system, which makes fraud more difficult.

    In California, there isn’t even any such thing as food stamps any more. They’ve just been rechristened “CalFresh”, which I think sounds like a fruit packing company.

  • zingzing

    damn, i thought i’d found the key to happiness. cannonshop, why do you tempt me with unlimited gov’t sponsored debauchery? huh? if i could have free booze and smokes, the kids can fuggin starve for all i care. but then, who’s going to go to the sto and get me my booze and smokes? oh, the harshness of modern life.

  • http://blogcritics.org/writers/dr-dreadful/ Dr Dreadful

    You think you’ve got it bad, zing, try getting stuck in the supermarket checkout line behind a WIC recipient. Oh, the horror.

  • zingzing

    doc, they do have self checkout these days. when you can do something yourself, why do you need someone else to do it for you, huh? take some responsibility. check yourself out. lookin’ good. baggin’ groceries. giving a computer something to do.

  • http://blogcritics.org/writers/dr-dreadful/ Dr Dreadful

    zing, I’m sure that in fabulous supercool NYC there are self checkout stands in every grocery store to go along with your flying cars, home nuclear reactors and food pills.

    Here in California, things are a bit more traditional. You still have to stand in line most places, we still think ruffs are the height of fashion, and the clerk carves your receipt onto a slab of rock using a moose’s jawbone.

  • http://handyfilm.blogspot.com handyguy

    They have far more self-checkouts in Tennessee [where my relatives live] than in NYC.

  • zingzing

    yeah, my local grocery doesn’t have self checkout. funny thing is that you have to unload your own basket (can’t just put it up there on the conveyor belt), but there’s a guy bagging your groceries and he wants a damn tip for it. shrug.

  • Dan

    If I remember correctly, California just experienced 69 million in welfare fraud drawn from some kind of state debit card. “Poor” people evidently neglected their starving children and instead opted for cash at Nevada casinos, in Hawaii, and on cruise ships etc.

    On a more honorable note, Rush Limbaugh pledged 500k to kick off his annual Leukemia/Lymphoma Cur-A-Thon Friday.

    “So how do you feel about confiscating someones house with the sheriff?”—Boeke

    You mean when the people living in it don’t pay for it? That’s not confiscation.

    zingzing, of course you can fund your debauchery with food stamps. I would have thought you would have already played this angle.

  • http://handyfilm.blogspot.com handyguy

    More evidence of your shining sensitivity. We’re all very impressed.

  • jack

    Why hasthis country done better with higher taxes than low ones? Late 1920s 24-25%
    1950s 91%
    Also, why has it always been a Republican president that was in office up to the depression and all the recessions

  • Tao

    Funny how you cite the conservative Brookings institute to add validity to your claims. Let’s boil it down to this: if tax cuts are so great then in a time when tax rates are at historic lows, where are the jobs? Running a massive deficit for 10 years under Bush plus instituting massive tax cuts gutted the federal government. The Bush tax cuts added $1 trillion to our federal debt without any substantial increase in jobs. The current extension added another $408-$600 billion to our federal deficit. After-tax income for the top 1% of taxpayers soared 74%, on average, between 1996 and 2006. The top 0.1% benefited even more, nearly doubling their income over that decade. By comparison, the bottom 20% of taxpayers saw their income fall by 6%, while the middle quintile experienced a meager 10% gain. Plus one of the stipulations of the capital gains tax was that people who make under $50,000 would benefit as greatly as those who made over a million. Ask yourself this, who on earth do you know that makes less than $50,000 a year and has assets that where they can gain from a capital gains tax reduction? Remember, 401ks don’t apply for this reduction. All a game to benefit the rich.

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