The Great Debate: What Should Be Done About the Bush Tax Cuts?

Tax the responsible, breed the irresponsible. Where will that eventually lead?

Maybe the question should be, who do you think will be more responsible with money, those who've earned it, or the government who can't abide by any budget. Ending the tax cuts and dumping billions more into the hands of our incompetent politicians is to hasten our decline and place the odds further against our economic recovery. Keep in mind that 70% of taxes paid are paid by 10% of earners. These successful Americans will be sacrificed to temporarily save incompetent politicians. It treats a symtom and our liberal government is in fiscal denial. Our government must CUT government spending as it also must cut taxes. Spending cuts must however exceed tax cuts as the only meaningful tool to patch the holes in our economic hull. The demand for more taxes can be compared with more heroine for political addicts who will do anything to satisfy their spending cravings. But our politicians do not tax for public projects. They tax now out of desparation! They don't get it. They are the problem and the public must see this reality before it's too late. The November elections WILL be our last chance! Believe it!

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Jeez, people. What is up with the rampant illiteracy? The tax cuts will not EFFECT; anybody. However, they may AFFECT many. The fact that a site like Yahoo does not know the difference between effect and affect tells me right there that we need to increase spending on education. At present we have the illiterate leading the even more illiterate. That is a situation that can come to no good, since human understanding will simply devolve (and clearly, in the USA, is devolving as we speak) into rampant nonsense. This must explain the runaway popularity of characters like Glenn Beck and his ilk. If you are too poorly educated to distinguish between paranoia and wisdom, then you are bound to be affected (not effected) by the consequences of the gaps in your understanding.

1917

Marginal Fed tax rate increased to 65% from practically nothing. real GDP growth rates of 13% follows.

1942

Marginal Fed tax rate increased from 65% to 94%. Real GDP growth rates of 17% follows.

1862

Federal income tax introduced, 5% at the marginal. Real GDP growth rates of 10% (until the South started getting trashed badly).

Jacking taxes up on the rich Jabbas and getting it to the bottom 90% have shown time and time again to be absolutely consistently excellent for economic growth. The trick is of course getting it to the bottom 90%. And that's a trick that none of these Fascist clowns are willing to do unlike the 1930s and 1940s, WWI, ACW etc.... (Adding 6% to the Fed. marginal rate is nowhere near enough to do any significant good). We're looking at the necessity for FDR job programs again as well as paying down the debt. Much of the massively increased revenue will also need to be consumed by government at the same time as well. The days of erroneous thinking that the economy can grow by eternally stuffing the pockets of the rich Jabbas exclusively so they can wad it up into balls and play tennis with each other with it should be over for all times, but it wont be in reality. At least not until 2012. ;-)

By the way the money paid into the SS "trust" fund by the Boomers for their future benefits is not a small amount -- $2.4 TRILLION. Now the government will have to raise a similar amount over the next several decades in MORE taxes or MORE debt for the "trust" fund to pay the SS benefits of the Boomer Bulge.

If tax cut is so great since Bush Tax Cut from 2001-2004,with huge spending pile up 13 trillion,why middle class losing members,feels doom,don't feel so great at all,only the rich feels great.Does Bush Tax Cut needs more time to finish the jobs.Why still struggle?Why 'Oba-care' wins election 2008?

Sorry about the double post. System said there an "internal failure" the first time I posted it -- and did not give the message that my message had been posted. So I posted again.

A good example of a tax increase and what politicians would do with it is the payroll tax. In 1983 Social Security taxes were increased. The retirement age of Baby Boomers was also increased to 66 and 67. The Baby Boomers were told that the extra money would be accumulated in the SS "trust" fund so that it could pay their benefits when the Baby Boom Bulge began to hit SS in the 2010's.

But this money in the SS "trust" fund was not independently managed like most private and state pension funds. Nor was it invested in marketable securities like municipal and corporate bonds, marketable US Treasury bonds, stock funds, CD's, repurchase agreements, income contracts and other securities like those of private and state pension funds. Instead it went into "special" non-marketable Treasury bonds that did not pay a competitive rate for most of the past 27 years.

Worse yet, the Congressmen of BOTH parties treated the SS "trust" fund as their own personal slush fund to pay for the various pork-barrel earmarks that they created. The money that they took from the "trust" fund in return for the "special" IOU's was not counted as a debt, but as "income" and applied against the reported annual spending deficit -- making it look smaller.

Now the ponzi scheme is falling apart because the Boomers have reached retirement age -- and there is nothing in the "trust" fund but the "special" bonds. The government will have to now raise taxes AGAIN or issue more debt AGAIN to repay the IOU's so that the Boomers can get their SS benefits that they already paid for.

If you give the Congressmen even more tax revenue, just what to you REALLY think that they will do with it? My bet is they will spend every penny of it as fast as they can, and then raise even more debt or taxes -- IF WE LET THEM.

A good example of a tax increase and what politicians would do with it is the payroll tax. In 1983 Social Security taxes were increased. The retirement age of Baby Boomers was also increased to 66 and 67. The Baby Boomers were told that the extra money would be accumulated in the SS "trust" fund so that it could pay their benefits when the Baby Boom Bulge began to hit SS in the 2010's.

But this money in the SS "trust" fund was not independently managed like most private and state pension funds. Nor was it invested in marketable securities like municipal and corporate bonds, marketable US Treasury bonds, stock funds, CD's, repurchase agreements, income contracts and other securities like those of private and state pension funds. Instead it went into "special" non-marketable Treasury bonds that did not pay a competitive rate for most of the past 27 years.

Worse yet, the Congressmen of BOTH parties treated the SS "trust" fund as their own personal slush fund to pay for the various pork-barrel earmarks that they created. The money that they took from the "trust" fund in return for the "special" IOU's was not counted as a debt, but as "income" and applied against the reported annual spending deficit -- making it look smaller.

Now the ponzi scheme is falling apart because the Boomers have reached retirement age -- and there is nothing in the "trust" fund but the "special" bonds. The government will have to now raise taxes AGAIN or issue more debt AGAIN to repay the IOU's so that the Boomers can get their SS benefits that they already paid for.

If you give the Congressmen even more tax revenue, just what to you REALLY think that they will do with it? My bet is they will spend every penny of it as fast as they can, and then raise even more debt or taxes -- IF WE LET THEM.