JUDGEMENT DAY FOR W.’s TAX CUTS

We’ve just marked the 10^thanniversary of the day W. signed into law the first of his infamous tax cuts, benefiting mainly our nation’s wealthy.  We’ve addressed the economic effectiveness of tax cuts vs. tax hikes in previous posts — check-it-out at  TAX CUTS FOR MILLIONAIRES AND BILLIONAIRES;   and at BUSH TAX CUTS and at TAX CUTS STIMULATE JOB GROWTH — HUH?  

So, now seems like a good time to review the claims of Tea-publicans that trickle-down economic policy is the best way to produce a healthy economy … after all, that’s what they are going to try to re-sell to the American people in the 2012 election.

FACT:  In the 10 years after W.’s tax cuts, following even more drastic tax cuts, our economy has lost a net of 1.1 million jobs.

FACT:  Under the leadership of a Democratic President Clinton the economy added more than 20 million jobs following “the biggest tax rate hike” in our country’s history. 

JUDGEMENT:  Lower taxes DO NOT guarantee economic growth and job expansion.  The Bush tax cuts were heavily skewed toward the wealthy who historically do not inject their excess money back into the economy — they instead BANK it.   

It’s worth looking back to remind us how very badly W.’s tax cuts worked in stimulating growth, as the Tea-publicans continue to claim that even more tax cuts will revive  our economy now. 

FACT:  Most big economic indicators moved in the wrong  direction following W.’s tax cuts, some horrifically!  Under W.’s administration, our country saw a series of historic economic lows and the slowest overall rate of economic growth since World War II.

FACT:  Household income declined for the first time since the Census Bureau tracked that data in 1967.  Labor force participation had reached an all-time high in 2000, but dropped steadily under Bush.

FACT:  With W.’s tax cuts the economy created fewer jobs than at any time since World War II!

What about the claims that tax cuts would lead to a boom in American entrepreneurialism?  It didn’t happen.

FACT:  The rate actually fell on start-up companies creating jobs between 2000 and 2010.

So, if the Bush tax cuts did not create a booming economy — what did they accomplish?  Well, the director of federal tax policy at the Center on Budget and Policy Priorities, Chuck Marr, argues, “The Bush tax cuts are a major driver of our current deficit — and have been and will continue to be.”

And still, the current crop of Republican presidential candidates continues to promote even lower taxes.  Former Minnesota Governor and Republican Presidential hopeful Tim Pawlenty recently proposed cutting the individual income tax rates to just two levels:  10% and 25%.  35% is currently the top level.  Pawlenty also called for even lower corporate tax rates!  Pawlenty’s tax plan would cost $7.8 trillion over ten years,  triple the  size of the Bush tax cuts!

During his speech introducing the plan, Pawlenty excoriated President Obama as “a champion practitioner of class warfare.”  “I come from a working class background.  I didn’t grow up with wealth.  But I’ve never resented those who have it,” Pawlenty said.  But as a new analysis from Citizens for Tax Justice shows, in addition to being outrageously expensive, Pawlenty’s tax plan is based on the Republican brand of class warfare — giving millionaires huge tax breaks.

FACT:  Taxpayers with incomes in excess of $10 million would enjoy an average cut in personal income taxes of $2.4 million, a 46.3% cut.

FACT:  The cost to the federal budget of the personal income tax cuts — just for taxpayers with incomes in excess of $1 million — would be $141.8 billion.

FACT:  Pawlenty has also proposed eliminating the capital gains and estate taxes entirely, two moves which would overwhelmingly benefit the wealthiest Americans and have a big impact on the budget deficit.

Pawlenty likes to point to his middle-class background while giving his economic pitch, but his tax plan implies either a huge tax shift, requiring the middle-class to pay for his massive tax cuts for the wealthy, or sky-high deficits in perpetuity.  As part of the plan he introduced, Pawlenty also endorsed a spending cap that would require deeper cuts than the current radical House Republican budget.

FACT:  Tax rates in our nation are currently the lowest they have been in 60 years.

JUDGEMENT:  And it’s still not enough to satisfy these modern day robber barons!   Where is the shared sacrifice?

FACT:  The Bush tax cuts are primarily the cause of the current budget deficits, now and into the future.

JUDGEMENT DAY:  I can sum up this disaster in two words:  Epic Failure!  How many times do we have to suffer through the social experiment known as “trickle down economics” before we finally learn our lesson?