And Over The Cliff We Go?
Posted by Michelle Moquin on 31st December 2012
Good morning!
I’ve been reading about this “dreaded” fiscal cliff but have avoided blogging about it. Why bother until progress was made. But when you’re talking about the republicans, the term “progress” is not in their vocabulary. And until now the only thing that has happened is the continual talks that have and are seeming to go nowhere. It is the same same republican obstructionism – repubs care more about them and theirs than the country.
I found this link on Maddow’s blog, and found it worth the read so I’m posting it for all of you.
December 10, 2012
Chart Book: The Bush Tax Cuts
To provide context for the debate about addressing expiring tax provisions and reducing long-term deficits, we’ve collected some of our charts related to the Bush tax cuts, which show that the tax cuts (1) are costly, (2) have worsened inequality, and (3) should be allowed to expire on schedule for incomes over $250,000.
1. The Bush Tax Cuts Are Costly
Policymakers enacted the Bush tax cuts in 2001 and 2003 and extended them in 2010; they are set to expire at the end of 2012. As the first chart shows, the tax cuts have been a key driver of the federal deficit and will account for $4.5 trillion in deficits over the 2009-2019 period if extended.

Continuing the Bush tax cuts would add trillions more to deficits. As the second chart shows, the high-income tax cuts — those on incomes above $250,000 for a married couple filing jointly ($200,000 for singles) — are a big reason why. Allowing the high-income tax cuts to expire would reduce deficits by $950 billion (including the interest savings) over the next ten years.

These figures do not even include the estate tax cut, which benefits only the wealthiest 0.3 percent of estates and costs an additional $141 billion over ten years (including interest costs), according to the Office of Management and Budget.
2. The Bush Tax Cuts Have Worsened Inequality
As the third chart shows, the Bush tax cuts provide much larger benefits for high-income people than middle-income people.

The high-end tilt of the Bush tax cuts has contributed to the stunning increase in income inequality in recent decades, a trend shown in the fourth chart:

3. Policymakers Should Let the High-Income Tax Cuts Expire
High-income households can afford to contribute more to deficit reduction, and the tax code is the principal mechanism through which they can make that contribution.
Some claim that allowing the high-income Bush tax cuts to expire would slow economic growth and job creation. These arguments echo those made against President Clinton’s proposed 1993 tax increases, which set marginal rates at the levels to which they are set to return when the Bush rate cuts expire. As it turned out, however, job creation and economic growth proved significantly stronger following the 1993 tax increases than following the 2001 Bush tax cuts, as the fifth chart shows.

Further, small businesses created jobs at twice the rate during the Clinton years than they did under the Bush tax code, as the sixth chart shows.

Restoring the higher rates for high-income taxpayers would not inhibit economic growth. In fact, the economic evidence shows that if the alternative to raising taxes is larger deficits, modest tax increases on high-income households would likely be more beneficial for the economy over the long run.
Allowing the high-income Bush tax cuts to expire also makes economic sense in the short run.
Extending most expiring tax cuts other than the high-income tax cuts would boost gross domestic product (GDP) by a significant 1.3 percent next year, a new Congressional Budget Office (CBO) report finds. Extending the high-income tax cuts would do very little to support the recovery, boosting GDP by just 0.1 percent (see chart).

A key reason why the high-income tax cuts make poor stimulus is that the economy is suffering from excess unemployment and underutilized business capacity; the most effective way to support growth is to boost demand for goods and services. The high-income tax cuts do little of that. They benefit only about the top 2 percent of taxpayers, who (as the CBO report explains) likely spend less of each extra dollar of income they receive than low- and moderate-income taxpayers do.
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Readers: Interesting huh? Kind of says it all. Gee, do you suppose the republicans are looking at these charts? Do they really care about country? Evidently not. Well…the talks will continue, and I suppose like our government, we will continue to talk about it too, until a decision is made, and then we can talk/bitch/rant about it some more.
Blog me.
On another note…I enjoyed reading all of your responses to the day before’s topic. And…to all of you “just asking,” I addressed the question in my write, but evidently it wasn’t enough.
So here it goes…”No, I am not having sex with my ex and no I am not thinking about having sex with my ex. One of the benefits of being with me is that you get to be with me, and all the other benefits that come along with being with this fine ass. Once the relationship is over, the benefits are gone, and all you get to do is look…and dream about it. :) Of course, one can try again to win my heart, but until then, these fine legs are closed. And yes Daniel, still ‘strutting my stuff’, and will continue to do so.” :)
I HOPE that satisfies everyone’s curiosity.
Oh…I almost forgot…
Have a Happy New Year!!
Be safe tonight!
It’s the eve of the new year here but new years day in Guam – Anna, Peter, Lea, et al: Happy New Year! Hafa Adai! And to the rest of the world: Happy New Year to my International readers too!
PS: Excuse me for being out of it this morning/afternoon. I am so wrapped up in politics and this fiscal cliff, the new year wishes have been pushed to second place.
Peace out.
Lastly, greed over a great story is surfacing from my “loyal”(?) readers. With all this back and forth about who owns what, that appears on my blog, let me reiterate that all material posted on my blog becomes the sole property of my blog. If you want to reserve any proprietary rights don’t post it to my blog. I will prominently display this caveat on my blog from now on to remind those who may have forgotten this notice.
Gratefully your blog host,
michelle
Aka BABE: We all know what this means by now :)
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