It's been a while since I've posted anything, because I have had a laundry list of things I want to talk about, and I can never decide on anything. But since my rabid readership demands more high quality ranting and raving, I must not disappoint.
I'd like to talk about taxes and the economy in the United States. Doesn't that sound fun? No? What if if put it in terms of pizzas and beers....still doesn't sound fun? Oh well, I think if you read on to my completely baseless rant it will at least convince you that I MAY have something to say that is not complete conjecture, although it probably is.
I hear politicians continue to fight over John McCain's stance on Bush's tax cuts. The fact is, he voted against them and, now that he is running for the presidency, is a whole-hearted supporter of them. I think we all know that he is simply supporting them to garner support from a broad republican base. It seems to me that no self-respecting republican would actually oppose a tax cut. I mean, less taxes...does it get any better than that? Obviously less taxes HAS to be good for the common American, right?
Well, let's look at the largest constituency amongst republicans. For the most part, republicans are your average low to middle class blue-collar workers. The salt of the earth working in the heart of America. These people have been led to believe that democrats tax and spend, while republicans lower their taxes, cure cancer, and help old ladies cross the road. The truth of the matter is, 90% of these people cannot afford reasonable health care, are facing a diminishing dollar, and must hope daily that they can somehow manage to pay their mortgage.
You may be saying to me, "Mr. Garment, where are you going with all this?"
Here's my point:
With Bush's tax cuts, single people making $30k a year have seen a 13% decrease in total taxes in the last 7 years, which equate to about a $4500 difference. However, people making just $3,000 more than that, at $33k per year, have seen a 0% decrease. To most this would signify a victory for the lower class, as it puts a little more money in their pockets. At first glance, one cannot argue the value of saving the lower to middle class money. However, the real numbers add up when you look at the tax BREAKS that benefited the rich, and the impact that had on our entire economy.
Take, for example, a single person making $500k a year. Before Bush's cuts he was paying $198,000 in annual taxes. Since the cuts, he pays $175,000. This is a cut in tax revenue of $23,000!
So, in essence, we saved the average Joe $4,500, but we decreased our tax revenue by $23,000!
The only way that our economy survives is by relying on a progressive tax. When we offer a tax break to the wealthy and the lower class, the only adjustment that can be made is a reduction in federal spending. Some people argue that the only thing that this extra tax revenue goes to is more social programs and government waste. To this I would quote my friend "People who complain about social programs don't realize that social programs are responsible for interstate highways, police, firemen, public schools, unemployment benefits, etc."
To tie it all back together, the average republican who is struggling to survive reaps more of a benefit from social spending than he does from a tax cut. I guarantee that a large portion of republicans who fall into the lower and middle class are construction workers, teachers, policeman, and firemen who would ALL see their wages cut as a result of federal tax cuts. Even if they don't see the direct impact, the states would have to make up their decreased federal funding by passing those losses down the line.
Even if your job does not receive any state or federal funding, I'll bet it'd be a lot harder to get to work without a paved road. I would also bet that you'd have to pay a lot more for child care if there were no public schools to send them to.
This graph shows the disproportionate breaks under Bush's tax cuts:
In closing, when our economy is failing, the dollar is diving, and health care is nearly impossible for the average person to afford, it makes no sense to lower our tax revenue by giving breaks to people who don't need them, and by luring lower income people into thinking that paying taxes is somehow a disadvantage. When the tax cuts are repealed, I think economists will all share a collective sigh of relief as we reinsert a valuable portion of tax revenue back into our feeble economy.Like it or hate it, click the link directly below that says "# comments" and leave a comment.
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5 comments:
Preach on brother..
p.s. by the way; I must apologize on behalf of my dumbass state for not doing a better job on Tuesday. Yes I know he's still in great shape; I was just hoping for more.
On we march to Wyoming...
Can you imagen that the taxes paid by a 500k earner were spend to actually improve the well being of every individual in this great nation?
Wow, less fortunately ones will have adecuate educational options, health, shelter, jobs, etc, and even be able to use the $4300 in a vacation.
The rewards will be endless for all.
Sorry, just dreaming
Art, I appreciate your comments. I have to agree, the way our tax dollars have been distributed is disturbing. I have at least some hope that with a new administration, we can funnel our tax dollars from a war machine towards actual enrichment of our population and, consequently, improve our currency and economic health.
There are a couple of fallacies that need to be realized in your arguments.
First, tax collection has a negative impact on a market economy. Governments do not operate on the basis of supply and demand but on the basis of the self-interest of their constituency. Any government intervention in the application of taxes towards certain sectors of the government only serves to distort the idea of balance and demand. In essence, the government supports many things that would not be able to stand on their own in the real world were it not for government intervention.
Second, looking at the decrease and increase due to the congressional tax cuts (remember that the Congress is the branch of the government that controls the "purse" and not the President) of 2001, a percentage decresase in taxes of $23,000 for a person making $500,000 is 4.6%. For someone making $30,000, a tax cut of $4,500 is a 13.6% tax cut.
While the actual figures are not the same, the percentages are way off. It could be argued that the tax cuts did not go far enough because they did not directlty benefit the middle classes as much as they helped the poorest Americans as well as the wealthiest. Furthermore, poor people by definition are consumers. It can be assumed that the poorest wage earners took their $4,500 and pumped it back into the economy. What about the wealthy? Unless they stuck the $23,000 under a matress, they most likely they did the same whether that was buying more stock in a company employing the "poor", a new car (made by blue collar workers), or taking a trip, which would support and pay for the salaries of the poor.
A "progressive" tax is nothing more than wage redistribution and serves to cheapen the efforts of many of the most successful people in the world. I understand people are frustrated with taxes, but class envy is not the way to "level the playing field".
hmmm...
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