Well, the first tax break Bush pushed didn't have any positive effect at all.
Then he insisted on a second one- at a time when the economy was taking a downturn, when the budget was running deficits, at a time when he was planning a war, and the national debt was increasing by leaps and bounds, he decided to cut taxes- cutting off the income needed to deal with those issues.
In fact, he "marketed" them as tax cuts for the middle class. The Congressional Budget Office recently released a report showing that what these cuts really did was lower the tax rate for the top 10% (the top 1% went way down), mostly ignore the tax rate on those in the lowest 20%, and raised the effective tax rate on the middle quintile (the 40-60% group). (Those are the people making about $50,000-$80,000 per year.) (I have the link at home; still at work so I'll post it later.)
Turns out, these tax cuts he said were directed at the middle class were actually a disaster for them. The cuts were loaded in such a way as to benefit the extremely wealthy. (Cuts on capital gains taxes, etc.)
The majority of the people in this country who have IRA's or 401k's don't deposit to the IRS' tax deduction limit each year anyway; how would cutting taxes on anything they might invest beyond that do most Americans any good? They're not paying into those accounts fully in the first place because they don't have the income to do so.
It's kind of like telling someone you're "cutting the taxes on their car." "But I don't own a car. I only ride my bike!" "Yes, but you got a tax cut!"
As for the "incentive" of reducing taxes on the wealthy- the only thing the new tax laws have really done is minimize penalties for "offshoring"- "moving" your corporate headquarters to the Bahamas or some such, to avoid paying corporate taxes in the US- and "outsourcing"- laying off people here and sending their jobs to other countries, such as India. In other words, they have NOT encouraged investment in the economy or increased employment here in the US.
Bush's tax cuts seem to have had the exact opposite effect of what he said he wanted them for.
Our taxes are already the lowest (by percentage of income) of the industrialized nations. In addition, our top tax bracket is WAY below that of other industrialized nations. Cutting taxes on the wealthiest might help investment when their tax rates are in the 50-80% range, but when they're already down to an effective rate in the middle-20% range?
Our tax system has always had some problems with fairness, but when you add in the kinds of cuts Bush has pushed through Congress, it's worse than it used to be.
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Date: 2004-09-03 09:51 pm (UTC)Then he insisted on a second one- at a time when the economy was taking a downturn, when the budget was running deficits, at a time when he was planning a war, and the national debt was increasing by leaps and bounds, he decided to cut taxes- cutting off the income needed to deal with those issues.
In fact, he "marketed" them as tax cuts for the middle class. The Congressional Budget Office recently released a report showing that what these cuts really did was lower the tax rate for the top 10% (the top 1% went way down), mostly ignore the tax rate on those in the lowest 20%, and raised the effective tax rate on the middle quintile (the 40-60% group). (Those are the people making about $50,000-$80,000 per year.) (I have the link at home; still at work so I'll post it later.)
Turns out, these tax cuts he said were directed at the middle class were actually a disaster for them. The cuts were loaded in such a way as to benefit the extremely wealthy. (Cuts on capital gains taxes, etc.)
The majority of the people in this country who have IRA's or 401k's don't deposit to the IRS' tax deduction limit each year anyway; how would cutting taxes on anything they might invest beyond that do most Americans any good? They're not paying into those accounts fully in the first place because they don't have the income to do so.
It's kind of like telling someone you're "cutting the taxes on their car."
"But I don't own a car. I only ride my bike!"
"Yes, but you got a tax cut!"
As for the "incentive" of reducing taxes on the wealthy- the only thing the new tax laws have really done is minimize penalties for "offshoring"- "moving" your corporate headquarters to the Bahamas or some such, to avoid paying corporate taxes in the US- and "outsourcing"- laying off people here and sending their jobs to other countries, such as India. In other words, they have NOT encouraged investment in the economy or increased employment here in the US.
Bush's tax cuts seem to have had the exact opposite effect of what he said he wanted them for.
Our taxes are already the lowest (by percentage of income) of the industrialized nations. In addition, our top tax bracket is WAY below that of other industrialized nations. Cutting taxes on the wealthiest might help investment when their tax rates are in the 50-80% range, but when they're already down to an effective rate in the middle-20% range?
Our tax system has always had some problems with fairness, but when you add in the kinds of cuts Bush has pushed through Congress, it's worse than it used to be.