Friday, October 24, 2008

Liberal Lies: the Bush Tax Cuts

It's a daily occurrence to open up the newspapers, turn on the news, watch a campaign ad and hear some bonehead Democrat uttering inane references to "big oil" and "disastrous Bush tax cuts." Subsequently, said bonehead Democrat impugns either Republican colleague or opponent in a political office with the above mentioned issues.

The Democrats have excelled at propagating lies and turning them against the Republicans. Whether it's the subprime housing market (Republican Wall Street vs. Democrats/liberals forcing banks to make bank loans) or high gas prices (billions of dollars in oil company profits vs. Economics 101: SUPPLY and DEMAND and high taxes against the oil companies), the Democrats have issued inane fabrication after fabrication.

What's further maddening is that Republicans have rarely uttered a rebuttal, or attempted to truly educate the public on these hot buttons. Moreover, the corrupt liberal mainstream media has not fact-checked any of these Democrat-issued lies; instead they've enabled the mistruths through the various mediums.

Yesterday, I discussed the lies of "big oil," primarily, propagated by idiots like Stuart Smalley, er, Al Franken against incumbent Minnesota Senator, Republican Norm Coleman. In a recent TV campaign ad, Franken smugly reminds the viewing public that Coleman took campaign contributions from "big oil" lobbyists. Nevermind that his colleagues, such as Chris Dodd, Barney Frank, and "The One" Barry Soetoro/Dunham/Obama took hundreds of thousands of dollars from Freddie Mac and Fannie Mae to avert their eyes to the then-portending housing crisis, or that Speaker of the House Nancy Pelosi has enjoyed hundreds of thousands of dollars in campaign contributions from various alternative energy providers (saving the planet, my ass).

The point here, people, is that mistruths and outright lies are being uttered ad nauseum by the Left. Today, I want to focus on the "disastrous Bush Tax Cuts." We've heard "The One," Obama, in his hope and change rhetoric, gain support by lying about the "disastrous Bush Tax Cuts." Personally in Minnesota, I've seen/heard a handful of ads from Smalley, er, Franken, indicting Coleman for supporting the "disastrous Bush Tax Cuts."

Furthermore, we're seen/heard the same Democrats proclaim that these tax cuts have benefited the rich while handicapping the poor. Note the following from columnist David Limbaugh:
(I)t is an objective fact that Bush gave greater percentage cuts to lower-income earners than to the wealthy.

How can these class-warfare demagogues sleep at night saying the rich don't pay their fair share when 2006 official figures show the top 1 percent of income earners pay 40 percent of the income taxes; the top 5 percent pay 60 percent; the top 10 percent pay 71 percent; the top 25 percent, 86 percent; and the top 50 percent, 97 percent? Just how much would the wealthy have to pay for it to be fair?

The more the wealthy pay the more actual dollars they will retain when there are marginal rate cuts, even when the rates of lower-income earners are cut more.
Let's be candid here people; the economy isn't in the shape it's in because of the "disastrous Bush Tax Cuts." True, the Bush Administration increased spending significantly, borrowing money from overseas investors; the dollar is weak, and we're engaged in two wars. The problem is NOT the tax cuts, instead it's the spending. Note the following from John Hawkins:
Liberals regularly claim that revenue from tax cuts must be "made up" somehow, which ignores the fact that government revenue usually goes up after tax cuts.

That was certainly the case after the Bush, Kennedy, and Reagan tax cuts, which makes perfect sense if you understand the Laffer Curve.

There are lots of intelligent arguments that you can make about taxes. You can argue that tax raises may also increase revenue, that tax cuts may reduce the size of the future increase in revenue the government will receive, or that we could eventually cut taxes so dramatically that they would no longer yield revenue increases, but clearly the last few major tax cuts we've had have produced increases in federal revenue, not decreases.

We've also heard "The One" Obama promise to cut taxes for 95% of American people; nevermind that 30-40% of Americans do NOT pay taxes. What that means is that he's going to be giving refund checks to people who do not pay taxes. How's he going to do that? By taxing the rich, and "spreading the wealth."

That's called socialism.

You don't do that in a sinking economy unless you want the economy to sink even further. Theoretically, you CUT taxes, especially capital gains taxes and those on businesses. I'm sorry you have to hear this, liberal boneheads, but the upper class invest; they're entreprenurial opportunities end up increasing jobs and OPPORTUNITIES for Americans. You raise taxes on the rich, they cut back on investment and job creation.

Moreover, per the Kennedy, Reagan, and Bush tax cuts, the economy actually grows and accumulates more revenue.

In his latest column, Charles Wheeler explains why cutting taxes absolutely, positively, cannot lead to more revenue flowing into the treasury as a result of the economy being stimulated:

"Economist Arthur Laffer made a very interesting supposition: If tax rates are high enough, then cutting taxes might actually generate more revenue for the government, or at least pay for themselves. (In one of life's great coincidences, he first sketched a graph of this idea on Dick Cheney's cocktail napkin.) If the government cuts taxes, then Uncle Sam gets a smaller cut of all economic activity -- but reducing taxes also generates new economic activity. Laffer reasoned that, under some circumstances, a tax cut would stimulate so much new economic activity that the government would end up with more in its coffers -- by taking a smaller slice of a much larger pie.

...Think about a simple numerical example: Assume you've got a $10 trillion economy and an average tax rate of 30 percent. So the government takes $3 trillion.

Let's cut the average tax rate to 25 percent and, for the sake of example, assume that it generates $1 trillion in new economic growth (a Herculean assumption, by the way). So now, what does Uncle Sam get? One quarter of $11 trillion is only $2.75 trillion. The economy grows, government revenues shrink.

That's basically what happened with the large Reagan and George W. Bush tax cuts, both of which were followed by large budget deficits. Yes, spending has a lot to do with that, but the bottom line is unequivocal: In both cases, government revenue was lower than it would have been without the tax cuts.

Read the following; this article sums up the BENEFITS of lowering taxes; isn't it amazing how STUPID liberals actually are?

There is a distinct pattern throughout American history: When tax rates are reduced, the economy’s growth rate improves and living standards increase. Good tax policy has a number of interesting side effects. For instance, history tells us that tax revenues grow and “rich” taxpayers pay more tax when marginal tax rates are slashed. This means lower income citizens bear a lower share of the tax burden – a consequence that should lead class-warfare politicians to support lower tax rates.

Conversely, periods of higher tax rates are associated with sub par economic performance and stagnant tax revenues. In other words, when politicians attempt to “soak the rich,” the rest of us take a bath. Examining the three major United States episodes of tax rate reductions can prove useful lessons.

1) Lower tax rates do not mean less tax revenue.

The tax cuts of the 1920s
Tax rates were slashed dramatically during the 1920s, dropping from over 70 percent to less than 25 percent. What happened? Personal income tax revenues increased substantially during the 1920s, despite the reduction in rates. Revenues rose from $719 million in 1921 to $1164 million in 1928, an increase of more than 61 percent.

According to then-Treasury Secretary Andrew Mellon:

The history of taxation shows that taxes which are inherently excessive are not paid. The high rates inevitably put pressure upon the taxpayer to withdraw his capital from productive business and invest it in tax-exempt securities or to find other lawful methods of avoiding the realization of taxable income. The result is that the sources of taxation are drying up; wealth is failing to carry its share of the tax burden; and capital is being diverted into channels which yield neither revenue to the Government nor profit to the people.

The Kennedy tax cuts
President Hoover dramatically increased tax rates in the 1930s and President Roosevelt compounded the damage by pushing marginal tax rates to more than 90 percent. Recognizing that high tax rates were hindering the economy, President Kennedy proposed across-the-board tax rate reductions that reduced the top tax rate from more than 90 percent down to 70 percent. What happened? Tax revenues climbed from $94 billion in 1961 to $153 billion in 1968, an increase of 62 percent (33 percent after adjusting for inflation).

According to President John F. Kennedy:

Our true choice is not between tax reduction, on the one hand, and the avoidance of large Federal deficits on the other. It is increasingly clear that no matter what party is in power, so long as our national security needs keep rising, an economy hampered by restrictive tax rates will never produce enough revenues to balance our budget just as it will never produce enough jobs or enough profits… In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now.

The Reagan tax cuts
Thanks to “bracket creep,” the inflation of the 1970s pushed millions of taxpayers into higher tax brackets even though their inflation-adjusted incomes were not rising. To help offset this tax increase and also to improve incentives to work, save, and invest, President Reagan proposed sweeping tax rate reductions during the 1980s. What happened? Total tax revenues climbed by 99.4 percent during the 1980s, and the results are even more impressive when looking at what happened to personal income tax revenues. Once the economy received an unambiguous tax cut in January 1983, income tax revenues climbed dramatically, increasing by more than 54 percent by 1989 (28 percent after adjusting for inflation).

According to then-U.S. Representative Jack Kemp (R-NY), one of the chief architects of the Reagan tax cuts:

At some point, additional taxes so discourage the activity being taxed, such as working or investing, that they yield less revenue rather than more. There are, after all, two rates that yield the same amount of revenue: high tax rates on low production, or low rates on high production.

2) The rich pay more when incentives to hide income are reduced.

The tax cuts of the 1920s
The share of the tax burden paid by the rich rose dramatically as tax rates were reduced. The share of the tax burden borne by the rich (those making $50,000 and up in those days) climbed from 44.2 percent in 1921 to 78.4 percent in 1928.

The Kennedy tax cuts
Just as happened in the 1920s, the share of the income tax burden borne by the rich increased following the tax cuts. Tax collections from those making over $50,000 per year climbed by 57 percent between 1963 and 1966, while tax collections from those earning below $50,000 rose 11 percent. As a result, the rich saw their portion of the income tax burden climb from 11.6 percent to 15.1 percent.

The Reagan tax cuts
The share of income taxes paid by the top 10 percent of earners jumped significantly, climbing from 48.0 percent in 1981 to 57.2 percent in 1988. The top 1 percent saw their share of the income tax bill climb even more dramatically, from 17.6 percent in 1981 to 27.5 percent in 1988.

Harmful Spending & Complexity
Lower tax rates are important, but they are not the only critical issue. Both the level of government spending and where that money goes are very important. And even when looking only at tax policy, tax rates are just one piece of the puzzle. If certain types of income are subject to multiple layers of tax, as occurs in the current system, that problem cannot be solved by low rates. Similarly, a tax system with needless levels of complexity will impose heavy costs on the productive sector of the economy.

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