The Bush Tax Cuts
Is the Economy on the upswing?
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f you listen to President Bush, or right-wing news channels such as Fox News, the economy has never been better; the Dow Jones is setting new records almost on a daily basis.
But you don’t hear Bush say anything about the largest trade deficit in the history of our country. Or that the deficit widened from $125 billion in 1996, which was equal to 1.6 percent of the U.S. Gross Domestic Product (GDP), to an all-time record of $857 billion last year, which was equivalent to 6.5 percent of the U.S. GDP, also a U.S. record.
President Bush also forgets to mention that he has created the largest deficit in our history approaching $9 Trillion. According to the Treasury Department’s Bureau of Public Debt, the United States has been adding $1.11 billion every day since September 29, 2006.
Democrats have sometimes been referred to as the “tax and spend party.” This is a fair assessment. But President Bush and the Republican Party, up until this year, could certainly have been called the “party of tax cuts and spending.”
The Democrats know that if you want to spend, you have to have money coming in from taxes. The Republicans who have been spending, as some have said, drunken sailors, have been spending while cutting taxes, which has helped to created the massive deficit.
President Bush, aided by the Republican controlled Congress have put our country deeply in debt.
Who benefited most from the tax cuts?
Families earning more than $1 million a year saw their federal tax rates drop more sharply than any group in the country as a result of President Bush’s tax cuts, according to a new Congressional study.
The study, by the non–partisan Congressional Budget Office, also shows that tax rates for middle-income earners edged up in 2004, the most recent year for which data was available, while rates for people at the very top continued to decline.
Based on analysis of tax records and census data, the study reinforced the sense that while President Bush’s tax cuts reduced rates for people at every income level, they offered the biggest benefits by far to people at the very top — especially the top 1 percent of income earners.
Though tax cuts for the rich were bigger than those for other groups, the wealthiest families paid a bigger share of total taxes. That is because their incomes have climbed far more rapidly, and the gap between rich and poor has widened in the last several years.
Are the Bush tax cuts creating more jobs?
For the first three years of Bush’s presidency, he did not create one job. In fact, he lost more than 3 million jobs. But since then, the Labor Department has reported job gains almost every month. We can assume that the tax cuts that Bush put in place have indeed helped to create jobs.
But the middle class, the back bone of our country, is being squeezed from all sides; people have to work two or three jobs in order to make the income they used to. Jobs are being outsourced to other countries, while wages here in the United States are stagnant, or on the down swing.
Manufacturing jobs are moving overseas where labor is cheaper; Bush even gives a tax credit to corporations for each and every job that they create in another country. In the six years that Bush has been president, more than 4 million manufacturing jobs have been lost here in the United States.
Just a thought, but maybe Bush should offer tax credits to corporations for jobs created here in the United States for American workers.
According to the Labor Department, the industry with the biggest need for labor here in the United States is in the service industries, which on a whole offer lower incomes.
Manufacturing jobs that used to be the backbone for the middle class offered higher salaries.
Are wage earners better off today?
American men have less income than their fathers’ generation did at the same age, according to a new analysis released by the Economic Mobility Project, an initiative of The Pew Charitable Trusts. Comprised of a Principals’ Group of experts from The American Enterprise Institute, The Brookings Institution, The Heritage Foundation, and The Urban Institute, the project seeks to investigate the health and status of economic mobility in America.
According to the report, men who were in their thirties in 1974 had median incomes of about $40,000, while men of the same age in 2004 had median incomes of about $35,000 (adjusted for inflation). The findings rely on new analysis of U.S. Census Bureau data.
There has always been the expectation here in the United States that each generation would do better than the previous generation. But that is not the case.
When President Bush took office, the poverty level here in the United States was at a 26-year low. Fast forward six years later and the poverty level here in the United States is at a 32-year high.
What will a Democrat do if he or she becomes President?
The Democratic Presidential front runners all say they would raise
taxes for the rich and extend President Bush’s tax cuts for middle and lower
class families. Most of Bush’s tax cuts are set to expire in 2010.
Hillary Rodham Clinton, Barack Obama, and John Edwards, said they were backing
variations of the same approach, which would result in higher taxes on income,
capital gains and stock dividends for upper-income people.
Democrats have made it clear that they would support keeping in place the tax
cuts that have benefited the vast majority of people, roughly speaking,
households with income less than $200,000
According to the Congressional Budget Office, to keep in place the entire
package of Bush tax cuts would cost the government about $1.8 trillion over the
next decade, during which baby boomers will be retiring and Social Security and
Medicare will see increased enrollment.
For people with incomes of more than $200,000 a year, roughly the top 3 percent
of earners, the Democratic candidates would revert to the tax rate under
President Bill Clinton in the 1990s. The top tax rate would go back to 39.6
percent, up from 35 percent, for people with taxable incomes of more than
$336,550. Those with incomes between $200,000 and $336,550 would see their rate
climb to 36 percent from the current 33 percent.
The Democratic candidates would not eliminate the estate tax on inherited wealth,
but Bush’s signature tax cuts for capital gains and stock dividends would all
but disappear, because people earning more than $200,000 receive the vast bulk
of such earnings.
With the Democrat’s plan, there is the chance of lowering our deficit, while expanding
tax breaks to the majority of Americans.
Staying the Course with Bush’s tax cuts for the rich would only put our country
deeper in debt.