Letters to the Editor
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Facts about taxes paid
Check out the IRS data. In 2000 (before the Bush tax cuts) the richest 5% of earned 35% of the income earned and paid 56% percent of income taxes paid. In 2005, the richest 5% earned 36% of income earned and paid 60% of taxes paid.
The richest 1% earned 21% of income earned in 2000 and 21% in 2005. However, in 2005, their percentage of total taxes paid jumped two percentage points.
My family probably counts as rich and I sure as hell didn't see my tax bill drop with Bush's cuts.
So, I'm having trouble understanding the conventional wisdom that the tax cuts helped the rich at the expense of the poor.
And the corollary that repealing them will help the middle class and poor.
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Free Lunch anyone?
Dave Johnston exposes in his book, Free Lunch: How The Wealthiest Americans Enrich Themselves at Government Expense (and Stick You With The Bill), how, through subsidies, companies like ADM get your money to grow corn then turn it into subsidized ethanol (a very short example). Are most people aware that the tax breaks companies like Cabella's get when they build a megastore actually let them KEEP the sales tax they collect?
George W. made his (initial) fortune by buying a crummy ball club cheap, then getting the public to fund a new stadium. He then sold the club at an enormous profit, all made possible by a coercive tax on consumers, many of whom didn't give a rat's ass about baseball.
This severely entrenched bureaucracy we have in place MUST be turned on its ear! The consumer is directly subsidizing the already wealthy! $800. is, maybe, a month's worth of groceries. A break for sure, but it ain't the cure for this accelerating, spendthrift "economy".
I am far from a Marxist. I'm to the right of Genghis Khan, but the Public, in this country, are fools being governed by fools. And the ordinary citizen, while being stripped of his civil liberties, is being stripped of his tax dollars for the profligate indulgences of the powerful elite.
It's up to the public to make themselves aware of this ongoing hoax. There's no excuse, in this day and age, to be stupid and unaware. The information is available. Use it or lose it I say. Rebate, my ass!
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Two policies
"Federal Reserve chairmen don't look kindly on legislative attempts to juice the economy by cutting taxes or boosting government spending. Their preferred strategy involves monetary policy: ..."
Not quite. The only strategy available to the Federal Reserve is monetary policy. The Fed has long recognized economic roles for fiscal and monetary policies, and also that fiscal policy is better at stimulating the economy.
Check any Fed publication of the last 20 to 30 years. You may be able to find the phrase, you can pull on a string (tighten monetary policy, slow inflation) but you can't as effectively push on it (use monetary policy to stimulate growth).
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Wake Up Call
This is not 2001. There was no war in Iraq, gas didn't cost $3.50 a gallon, and the average price of a home in Silicon Valley was not $750,000. Remember, back in the 70's we were talking about alternative sources of energy. There is wild speculation in both housing and the stock market. Now things have to cool off. Call it a recession, or a breather. Putting a few dollars in the hands of people out of work, who are on welfare, or who lost their homes, will not jump start this economy. The problem is this administration. The economy will continue to slide, housing will sell off, and the market will drop (not crash). Bush was forced to make a statement to the public, and nobody cared about what he had to say. Even Bernanke had to admit we have entered a recession. Simplistic solutions will NOT fix the problem. This is a wake up call ...
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Forecast: An Economic Katrina
re: "most economists are saying pretty much the same thing: Get some tangible cash into the hands of those Americans who need it most and would spend it quickly"
Duh.
Unfortunately, this recognition is too little, too late. Years of U.S. economic policy has taken the exact opposite approach, from "free trade" that has gutted our manufacturing base and the good paying jobs that went along with it to tax cuts that only served to enrich the already rich.
The sudden revelation that it's actually the vast majority of increasingly impoverished Americans that drive this economy would be laughable were it not so seriously bad.
Like the Titanic, we've struck the iceberg. Handing everyone a bucket so that they can bail won't stop the ship from sinking.
And, you can be sure that the First Class passengers will be the ones seated in the lifeboats.
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@ Maluska,
I am truly not trying to flame you or be disrespectful to you, but I have to wonder if you simply borrowed talking points from the GOP. There are a number of problems with what you have written. Let me address just one.
You write: Check out the IRS data. In 2000 (before the Bush tax cuts) the richest 5% of earned 35% of the income earned and paid 56% percent of income taxes paid. In 2005, the richest 5% earned 36% of income earned and paid 60% of taxes paid.
Yes, but, the income tax is not the only tax that Americans pay, nor is it the most regressive tax paid - that would be social security. And the richest Americans do not receive all of their compensation in the form of wages where it is subject to federal income and the FICA taxes. Most Americans DO receive their entire compensation in the form of wages where it it is subject to federal income and the FICA taxes. (And I don't have to time to address this issue, but will raise it because it is important in this discussion: How much of the national wealth do the richest American own???)
You write: My family probably counts as rich and I sure as hell didn't see my tax bill drop with Bush's cuts.
Well, what is your net worth? What is your income? And what is your annual compensation - tax-free benefits plus income? These are all separate issues, but come into play when we discuss various taxes. ALL TAXES ARE NOT LEVIED EQUALLY.
You write: So, I'm having trouble understanding the conventional wisdom that the tax cuts helped the rich at the expense of the poor. And the corollary that repealing them will help the middle class and poor.
Most Americans pay more in social security taxes than they pay in federal income tax. When Bush cuts federal income tax rates, it doesn't help the middle class. If you want to help the middle class or the poor, you cut social security taxes.
Finally, remember that social security was NOT supposed to run a surplus (it is supposed to be a pay-as-you-go system). Its surplus has been stolen to fund the rest of the federal government, and to give tax cuts to the wealthiest.
My solution to the looming recession include: 1. End the war. Fire anyone above E-3 or O-3, or civilians above GS-5. Get rid of the outsourcing (especially the treasonous Blackwater and others). Give DOD 1% of their current budget, and if they don't like it, they can leave the country. This unnecessary war is the mechanism by which Bush et all have used to raid the treasury and bankrupt the nation. It cannot make us safer. 2. Enact a six-month moratorium on foreclosures. Renegotiate terms favorable to the borrowers. 3. Eliminate ALL FICA taxes on incomes under 60K for one year.
It's a start.
Maluska, I suggest that you do some independent reading and research on how different taxes affect different groups.