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Sunday, September 4, 2011
Another way of looking at the drastic cuts Republicans are forcing on everyone
This is very obvious and nobody ever talks about it…when Republican-Teahadists insist in making such draconian cuts what they are really doing is raising the taxes of the working class. How is that possible, you might say?
It is logical to figure out that if social programs are cut at the Federal level then the states and municipalities are compelled to pick up the tab or not offer them…in order to do that, states and cities that are already hard pressed for revenues will have to increase property taxes, licenses, city services, etc. That is indisputable and it is in reality AN INCREASE IN TAXES for regular Americans while the super wealthy and the corporations pay very little.
Tax Cuts Pay for Themselves is perhaps the greatest Republican canard. It's popular because at the root of the message is an easy sell; you can get something for nothing. Compounding the degree of obfuscation is that RWNM pundits continually rewrite the history, usually "forgetting" key facts
Bob Secter of the Tribune explains what is happening in Illinois and across the country:
What the feds gave in tax cuts, Illinois may take away
1-year cut in Social Security taxes in danger of being overshadowed
“A big income tax hike proposal getting serious consideration in Springfield would cost individual taxpayers hundreds or thousands of dollars a year, but in the near term the financial blow could be softened for many workers by the federal tax deal reached last month.
Democrats who control state government are mulling a proposal to attack a record $15 billion deficit with a temporary 75 percent hike in the personal income tax rate, bumping it from 3 percent to 5.25 percent for individuals through 2014, then rolling it back to a permanent though still higher level of 4 percent or less. Corporate and cigarette taxes would also rise.”
The pesky question remains: do we want to continue to give tax breaks for the wealthy and the corporations at the expense of an already beleaguered middle class and working poor?
The Bush Tax Increase
“STATE TAX INCREASES, BROUGHT ON BY BUSH BUDGET: The latest Bush tax bill/budget proposes a 3% decrease to federal grants to states, a $16 billion decrease in state tax revenues - all while proposing between $23-$82 billion in unfunded mandates. Because of this "millions of American individuals and businesses face tax hikes this year... wiping out the savings that some taxpayers would otherwise see on their federal 1040." Since President Bush took office, states have raised taxes by a total of $14.5 billion, after 7 consecutive years of cutting taxes. The total 2003 net tax increase was $6.9 billion for the 42 reporting states – following a 2002 net tax increase of $9.1 billion. Seventeen states raised taxes by more than 1% with four states raising taxes by at least 5%. USA Today reports "squeezed by tight budgets, Republicans in at least a dozen state legislatures across the country are feuding over the party's bedrock principles of holding down spending and not raising taxes." Similarly, the Wall Street Journal noted, Republicans in states all over the country "are undercutting the election-year message: They are for raising taxes...Worried about declines in schools and basic services, many Republican leaders in the states say they have little choice."
“The argument that tax cuts create or increase revenue is an old myth that simply refuses to go away. The logic behind this argument is that cutting taxes will stimulate spending (since investors now are now encouraged through reduced tax rates) that will result in GDP growth. This growth in GDP will result in increased tax revenues so significant they will more than offset the drop in tax revenues. The inverse logic is that increased taxes lower tax revenue by discouraging investment, which in turn lowers tax revenues so drastically; they offset the added increase coming from the tax rate increase. One of the reasons Republicans or other self-ascribed fiscal conservatives are able to get away with this is, is the superficially plausible argument that the Reagan and/or Bush tax cuts grew the economy and created revenue. To understand the fallacy of these arguments, it is necessary to understand economic growth during business cycles and over a long period of time, and it’s relationship with tax revenues.”
I leave you with the logical inquiry: If tax cuts for the wealthy and the corporations work so well, then why did we lose over 5,000,000 jobs during the Bush years and since they are still in effect…shouldn’t we be swimming in jobs and prosperity?
SOURCE: CBPP, 10/17/03, 6/3/03 & 2/3/04; Christian Sci. Monitor, 2/2/04; NCSL, 2003; USA Today, 2/9/04; WSJ, 2/20/04
http://www.obamaftw.com/blog/taxes/tax-decreases-do-not-increase-revenue
