Tag Archives: heavily-skewed

The New York Times on Tuesday declared what most conservatives knew would happen if Democrats took control of both Congress and the White House: “more Americans – and not just the rich – are going to have to pay more taxes.” In its editorial comically titled ” A Real Debate on Taxes ,” the Times predictably argued for a total elimination of the Bush tax cuts, although it favored some partial delay to this given the precarious state of the economy. That in itself was humorous as the Times clearly seems to get that raising taxes is indeed economically damaging. Yet maybe more telling was how this “real debate” didn’t once involve the spending side of the budget: President Obama is right when he says the country cannot afford to extend all of the tax cuts. He wants to let the tax cuts expire on the top 2 to 3 percent of American households (couples making more than $250,000 a year, individuals making more than $200,000) and permanently extend them for everyone else. The problem is that a permanent extension of the so-called middle-class tax cuts is also unaffordable. It makes sense to extend them temporarily, because the weak economy needs the boost. But more revenue will be needed in years to come to keep rebuilding the economy and meet health care and other obligations to retiring baby boomers. That means more Americans – and not just the rich – are going to have to pay more taxes. For all the politicians’ talk about deficits, no one is saying that. Hmmm. So, tax cuts for low, middle, and upper-middle income wage earners boosts the economy? But more “revenue” is needed to “keep rebuilding the economy and meet health care and other obligations to retiring baby boomers?” Why not just continue to allow Americans to keep more of their own money to give the economy a “boost” while working on ways for the federal government to exist on less revenue? How about exploring avenues to reduce the “obligations to retiring baby boomers” for example? As is typical from left-leaning publications, such logic was never broached. In fact, the words “spending,” “expenditures,” and “outlays” were nowhere to be found in this “real debate”: An honest debate needs to start with the numbers. The tax cut packages of 2001 and 2003 – heavily skewed to high earners – cut taxes by $1.65 trillion. In 2001, supporters argued that with the budget in surplus, the cuts were affordable. In 2003, they argued that the cuts would spur investment and growth and pay for themselves.   How does one have an “honest debate” by completely misrepresenting who benefited from the Bush tax cuts? As NewsBusters reported on August 11, the liberal think tank the Brookings Institution has concluded that 82 percent of the Bush tax cuts would go to low, middle, and upper-middle income wage earners in the next ten years if they were extended. Only 18 percent goes to couples making over $250,000 a year and singles over $200,000. With this in mind, it is certainly not “honest” of the Times to depict the Bush tax cuts as “heavily skewed to higher earners.” In fact, it’s an out and out lie! But there’s more: Since 2002, the federal budget has been chronically short of revenue. According to calculations by the Center on Budget and Policy Priorities, if the tax cuts of the Bush years had never been enacted, publicly held debt at the end of 2009 would have been about $5.2 trillion, or 37 percent of gross domestic product. Instead, it was $7.5 trillion, or 53 percent of G.D.P. (it now stands at 60 percent).   Don’t you love that phrase “short of revenue?” Let’s examine just how “short of revenue” our government has been since 2002. Total unified tax collections that year were $1.853 trillion with outlays of $2.011 trillion.  By 2007 just prior to the beginning of the recession, revenues grew to $2.568 trillion, a 39 percent jump in only five years. Does that sound “short of revenue” to you? After all, if spending during this period had only grown at the rate of inflation, we would have had a $250 billion surplus! Heck, spending could have increased by five percent per year during this period and we still would have had a balanced budget! Yet, according to the Times, the problem was that we were “short of revenue.” BUT, there was even more fun to come: Tax cuts for low-, middle- and upper-middle-income taxpayers should be temporarily extended because those taxpayers tend to spend most of their income and the economy needs consumer spending. That would cost roughly $140 billion next year, but the spur to the economy is more important than the budgetary impact. Tax cuts for the rich can safely be allowed to expire because wealthy taxpayers tend to save rather than spend their tax savings. The revenue from letting these expire – nearly $40 billion next year – would be better spent on job-creating measures. Remember how the Times earlier said the Bush tax cuts were “heavily skewed to high earners?” If this were true, then how coming extending these cuts to low, middle, and upper-income taxpayers would cost roughly $140 billion next year while extending those for “the rich” would cost nearly $40 billion? Using the Times’ own numbers, these combined cuts would cost about $180 billion next year with only $40 billion – or 22 percent – going to “the rich!” Doesn’t that mean that 78 percent goes to low, middle, and upper-middle income taxpayers? So exactly how were the Bush tax cuts “heavily skewed to high earners?” Unfortunately, that’s a question the shills at the Times will likely never answer!

Read the original:
NYT: ‘More Americans – Not Just the Rich – Will Have to Pay More Taxes’