2006-10-11
Bush's Tax Cuts Reduce Fedl Deficit
Nadir: How many pieces of data do you need before you recognize that Bush's tax cuts have had a reductive effect on the federal deficit (as predicted by its proponents)? Since you deplore federal deficit spending, shouldn't you join me and Bush in advocating even more cuts to the various tax rates?
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"Democrats said the improvement in the 2006 federal deficit was a temporary blip. They predicted rising deficits for years to come unless policies are changed.
“Only a president with such a historically bad economic record would be this excited about a $248 billion deficit,” said Rep. Carolyn Maloney, a New York Democrat. “Under his watch ... record surpluses turned into record deficits as far as the eye can see.”
Republicans are trying to convince voters that the GOP champions tax cuts while Democrats will raise taxes if they gain control of Congress. Democrats contend the administration’s tax cuts have primarily benefited the wealthy."
I agree...
Well, Nadir, that's certainly one way to handle facts that soundly and squarely refute one of your claims: talk about something else.
You claim that cutting tax rates will make the fedl spending deficit worse. Then every fedl income/spending report shows increases in fedl income. To this you claim... that the "benefits favored the rich."
But that's a different point, isn't it? Can we stick, please, with the single point about federal revenues. I claim that the US tax code inefficiently high, and that reductions will increase tax revenue. You claim the opposite. The facts show that one of these claims is correct, and the other false.
Once we establish this, then I am happy to discuss the relative distribution of the benefits.
Ignoring the fact that Bush turned a balanced budget and a surplus into a record deficit in two years...
Taxes could be lowered across the board for the middle and lower classes and for businesses if not for excessive federal defense and war spending, corporate subsidies and if the Medicare system were allowed to negotiate lower prices from pharmaceutical companies for drug benefits.
I agree that taxes are high (though lower than in most other industrialized countries), but they are also not evenly distributed. The wealthy should pay more and middle and lower class Americans should pay less. So many taxes are levied on small business that growing small companies is often cost prohibitive.
Bush's policies aren't helping because they have continued corporate subsidies, increased war spending, worsened the Medicare problem without improving services, created more disabled veterans who will be on government assistance for the rest of their lives, created incentives for more low paying jobs without helping to increase wages (and therefore tax revenue) for American workers.
Paul, you completely miss the connection between a growing stock market and worsening conditions for American workers. Why is the economy is "expanding"?
1. Experienced workers are being laid off and younger less experienced (and lower paid) workers are being hired.
2. All employees are working more hours while wages have been stagnant for 35 years.
3. Companies are encouraged to outsource work to foreign workers who labor for slave wages.
4. Costs of materials are cut by buying those goods manufactured in foreign countries instead of in the US.
5. The minimum wage hasn't been raised in decades, which means low level workers aren't seeing increases that keep pace with the rate of inflation.
6. The lowest level jobs are going to undocumented workers who make less than the federal minimum wage with no benefits.
7. Companies are reducing benefits for the workers they do have on staff. They are reducing their costs by eliminating pensions and health care benefits.
8. Corporate agriculture is subsidized with both monetary assistance and with tarrifs which create artificially high prices on imports.
9. The military industrial complex is booming.
10. The healthcare industrial complex is booming because costs are on the rise for an aging population with no relief for those who receive that care in sight.
11. The prison labor industry is the nation's second largest employer using legalized slavery and paying wages even lower than Chinese and undocumented workers receive.
12. The financial industry is being aided by record credit card debt and bankruptcy laws that benefit lenders and not borrowers.
Which part of this picture is good for middle class and working class Americans? None of it.
Supply side or trickle down economics and liberal economic policies do not work and have not worked for the last 60 years. The economy will only be able to acheive sustainable growth through bottom up changes that give American workers more money and create a more equitable marketplace where small businesses can compete with larger corporations on a level playing field.
By creating more wealth across class lines (eliminating class) the US economy will be able to create more jobs and sustain growth and could survive with lowered taxes. A single-payer healthcare system would lower health costs for corporations and individuals.
A constitutional amendment guaranteeing an equal high quality education for every American student would improve prospects for the next generation of poorer Americans.
Without these changes and with more capitalist policies as stated above, the United States will turn into the Third World country that Lou Dobbs and SixStringSlinger fear.
Is tax revenue rising as a result of these policies? Perhaps slightly. But it certainly isn't keeping pace with Bush's spending and it isn't improving the lives of average Americans. If anything, quality of life has gotten worse over the last six years.
Nadir: I assume that you understand math. The deficit is dropping, so by definition the increased revenues are more than keeping up with the insane spending increases.
"The deficit narrowed sharply because revenues climbed by 11.8 percent, outpacing a 7.4 percent increase in spending." How did you interpret "outpace" as "not keeping pace with spending"? How do you define the word "slightly" in economics so that it applies to a revenue increase of 11.8%?
Just recognize the fact: reducing tax rates increases tax revenues in contemporary USA. It's OK to admit this fact. Then we can move on to other discussions, such as if increasing tax revenues (absolutely, or specifically by this mechanism) benefits average people.
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