The War on Tax Cuts
In their current battle to tax-and-spend us into economic collapse, the left has dug up or created every statistic they can to somehow justify taking more money away from Americans and letting the government spend it. This is not a new battle or a new position. Behold Senator John Kerry discussing tax cuts:
Basically, you can’t be trusted to invest your money where we say you need to invest it, so the Government must not give tax cuts because the Government is more responsible than a private citizen.
Due to the pending expiration of the Bush tax cuts the Liberal Media has gone out of their way to paint tax cuts as evil villians and part of the deficit. Do tax cuts affect Government’s income, certainly. But to simply declare that not letting those tax cuts expire adds to the debt is to ignore reality.
The economy of the United States is in a fiscal crisis. We are on the verge of an economic collapse. It is not government, but private enterprise that makes this country great and grew our economy, it is governmental interference that is bringing the economy down. Not renewing the Bush tax cuts amounts to a huge tax increase on not just the very wealthy, but the middle class as well. We are at a time when we really could recover from this recession. However the policies of the Obama Administration have been destructive to private business and private enterprise.
The Heritage Foundation posted a report titled “The Three Biggest Myths About Tax Cuts and the Budget Deficit” Here are a few highlights:
Myth #1: The 2001 and 2003 tax cuts wiped out the $5.6 trillion surplus for 2002–2011.
Fact: They caused just 14 percent of the swing from projected surpluses to actual deficits.
The budget surplus peaked at $236 billion in 2000. However, Senator John Kerry (D–MA), among others, has criticized President George W. Bush for having “taken a $5.6 trillion surplus and turned it into deficits as far as the eye can see.” The critics have pointed specifically to the $1.7 trillion in tax cuts enacted in 2001 and 2003 as the leading creator of deficits. However, the numbers tell a different story.
First, the $5.6 trillion surplus never actually existed. It represents the cumulative 2002–2011 budget surplus projected by the Congressional Budget Office (CBO) in early 2001. Instead, the United States is now set to run a $6.1 trillion deficit for 2002–2011—a swing of $11.7 trillion. The surplus projection itself was completely unrealistic.
Myth #2: Future deficits are “the result of not paying for two wars, two tax cuts, and an expensive prescription drug program.”
Fact: These policies play a relatively minor role in the growth of future deficits.
President Bush implemented the three policies mentioned by President Obama in the early 2000s. Yet by 2007—the last year before the recession— the budget deficit had stabilized at $161 billion. Since the combined annual cost of these three Bush-era policies is now relatively stable, they cannot have suddenly caused a trillion-dollar leap in budget deficits beginning in 2009
Myth #3: Declining revenues are driving future deficits.
Fact: Rapidly increasing entitlement spending will cause nearly 100 percent of rising long-term deficits.
Over the past 50 years, Washington has collected an average of 18.0 percent of GDP in revenue, spent 20.3 percent of GDP, running a sustainable deficit of 2.3 percent of GDP. Annual figures have not deviated much from these averages. Even as tax rates fluctuated, tax revenues rarely deviated by more than 1 percentage point from 18.0 percent of GDP. The composition of spending has shifted dramatically from defense to entitlements, yet total spending has nearly always remained within 2 percentage points of 20.3 percent of GDP. Total spending and revenues have remained remarkably stable for the past 50 years.
From CNBC: “Letting Bush Tax Cuts Die Would Kill Recovery: Analysts”
The nascent US economic recovery would be halted in 2011 if Congress fails to extend the Bush tax cuts for the wealthiest Americans, analysts at Deutsche Bank said.
“In a worst-case scenario, allowing the Bush tax cuts to expire and failing to fix the AMT (Alternative Minimum Tax) could result in (1.5 percent) of fiscal drag in 2011 on top of the 1 percent fiscal drag we expect to occur as the Obama fiscal stimulus package unwinds,” Deutsche said in a note to clients. “If the recovery remains soft/tentative through early next year, this additional drag could be enough to push the economy to a stalling point.”
In spite of such information the liberal media continues it’s assault on tax cuts in the spirit of Senator Kerry above, here’s the Huffington Post, with some classic fearmongering:
“And thanks to an alliance between the Republicans (which includes the tea party), the increasingly dominant far-right media, a traditional “old media” that panders to the far-right, and right-of-center “conservadems” who pander to the Republicans, too many voters have decided that the Republican Party might be better suited to turn all of this around.
The big lie here is that if Congress stops spending, cuts the deficit and makes permanent the Bush tax cuts, especially the tax cuts for the wealthiest Americans, our problems will be solved — even though these concepts are in direct conflict with each other. Not surprising given the ever-lengthening Republican syllabus of contradictions.”
Where’s the contradiction? If you stop the spending and downsize the Government you need less income. Businesses need economic certainty to know whether or not they can invest their money and expand their businesses by hiring workers. An increase in taxes causes lay-offs, price increases, and private sector economic decline.
Here’s the simple answer to solving the fiscal crisis, stop the spending. It’s time for entitlement reform, time to stop growing this massive government, and time for a complete spending freeze. HealthCare must be repealed, Financial Regulatory Reform must be repealed, Fannie Mae & Freddie Mac must be reformed, and the bailouts must stop.
None of the above will happen under Obama’s presidency because, in my opinion, bringing down the economy is his goal. The choice here is do you believe what John Kerry has said, that you are stupid and won’t invest properly, so the Government must invest for you, or do you believe in freedom? Here is a tax calculator to show you the impact the Bush tax cuts expiring will have on your income.