Letters: Bush tax cuts good for everyone

I am writing in support of the recent letter from Mary Black regarding what the government can do to actually help small businesses. As a small-business owner, I can tell you that Black’s letter is 100 percent accurate.

The Republicans have talked a good game for the last 30 years regarding the importance of small businesses to the American economy and what should be done to ensure their success.

Now is the time for the Republican Party to do the right thing rather than just talk about it.

A simple majority vote in the U.S. House of Representatives to renew the Bush tax cuts for everyone making less than $250,000 per year would benefit 98 percent of Americans and 97 percent of small businesses. Once the House passes this, the Senate will quickly follow suit and the president will sign off on it immediately. Crisis averted.

However, I do not see this happening for a very simple reason. In spite of the large number of people who have been fooled into thinking that the Republicans have their interests at heart, the real constituents of that party are the ultra rich and big business. The GOP will not take any step that will benefit the rest of us if that faction’s interests are not served.

Republican politicians constantly take the position that benefiting the rich will trickle down to the rest of us in the form of jobs, higher government revenues etc.

Even a brief reading of American history since World War II shows this notion to be totally false. All of our greatest economic booms have come when our top marginal tax rates were much higher than they are now. All of our biggest busts have occurred when tax rates on the rich were low.

Ronald Reagan lowered taxes in the early ’80s on the theory that this would result in higher federal revenues. Instead, the result was a national debt that went from $900 billion to $2.7 trillion in just eight years.

George Bush lowered taxes in 2001 and 2003 and we all know what happened next.

The Republican notion of how our economy works is false. Very few mainstream economists support it. As we have proven over and over again, the only reliable result of lowering taxes on rich folks is that rich folks get richer. The rest of us get poorer.

Contact your representative in Congress. Urge him or her to vote to renew the tax cuts for the middle class today. The ultrarich are quite capable of taking care of themselves.

Michael Hale

IT consultant

Baton Rouge

Comments

1) Comment by InPVille - 12/11/2012

The United States has the most progressive tax system of any Western Nation. While the tax rates are not as great in the U.S., the upper tax brackets pay a larger percentage of the taxes paid. The other Western nations collect more money from the middle classes in the form of VAT taxes. So the upper tax brackets in the United States are already paying more than their fair share if you take the balance of all western nations as the standard of measure. -[**]- You are probably right that "Trickle Down" will not go away. That straw man will continue to be trotted out and the equally flawed Keynesian model big government types are so fond of advanced instead. -[**]- Increasing taxes on the upper brackets may or may not generate more revenue. However, without cutting spending and increasing the tax base(taxes on the other classes), the revenue equation has no change of being solved.

2) Comment by DMJ - 12/11/2012

Ahh... Trickle Down doesn't even exist? So....why did Mitt Romney argue for lowering marginal income tax rates? Why does the GOP favor a flat tax? Why do Republicans want to eliminate estate taxes, capital gains taxes and continue with the carried interest loophole? I'm pretty sure Trickle Down, the idea at least, is alive and well. Calling it something else, unfortunately, won't make it go away.

3) Comment by InPVille - 11/11/2012

@DMJ: There is no "trickle-down" economic theory it is a creation of the minds of big government advocates. It is a strawman argument erected only to then be knocked down with a stick as a debating tactic to convince the ignorant. The actual path of funds in a private enterprise economy is actually the opposite of those who use the term "trickle-down" theory as a pejorative. Investments in business are first directed in employee pay and payments to contractors and such. Only if the business succeeds is their a $$ return to the owner. If there is no profit, business activity will be reduced or not occur at all. There are two cases where taxation produces no revenue. The first is when the tax rate is 0%. The other is when the tax rate is 100%. The idea is that between these two extremes there is somewhat of a bell shaped curved. Up to a certain point any increase in taxation will generate more revenue to the government. Eventually a point is reached where taxation begins to exert a drag on the economy and the revenue benefit of increased taxation are reduced. Only if the tax rate has reached an advanced point toward the 100% taxation marker where those with money to invest have diverted $$ to places where they will not be taxed to exhaustion would anyone with a private enterprise mindset argue that reducing taxes would advance the economy. -[**]- As a counterpoint, there is ample evidence that the Keynesian model doesn't work either. It has resulted in a heavy debt burden in Western Nations. In fact economists are beginning to take the view that government "stimulus" isn't something that is going to work in nations that are heavily in debt. The weight of evidence shows that no economic model currently in existence has been shown to be reliable for removing the ups and downs of historic economic cycles.

4) Comment by Attila - 11/11/2012

@DMJ: to paraphrase that lame J. G. Wentworth commercial...IT'S THEIR MONEY THEY CAN USE IT AS THE PLEASE.

5) Comment by DMJ - 11/11/2012

abolish= reinstate. happy opposite day!

6) Comment by DMJ - 11/11/2012

I wonder what would have to happen for Trickle Down to finally be relegated to the dust bin of bad ideas. Job creators are only job creators if they create jobs. If they hoard their money and simply let it earn interest that they pay less taxes on, percentage-wise, than a janitor, then they're not job creators and they're not helping to pay down the debt. Enough already. Let the tax cuts for the rich expire. Let the 1st $150 of yearly capital gains go untaxed and tax the rest at the same rate as income. Abolish the estate tax; this truly benefits no one but the super- rich, who won't miss the $. Mortgage interest for homes worth more than $1 million- get rid of it. Remove the tax cap on Social Security. Do all this, we bring the cost of government in line with the amount of revenue raised after a couple of decades. It's not that complicated. It's up to Boehner and the yahoos in the House now...

7) Comment by agagent - 11/11/2012

The CBO says raising taxes on the rich will slow the economy, but Obama is more concerned about social justice than helping the economy.

8) Comment by agagent - 11/11/2012

Prominent economist Thomas Sowell said that the ones most responsible for the recession (the Democrats) took political advantage of the crisis. We did not hear that in the media because Bush was the Democrats’ chosen scapegoat. The Bush tax cuts got us out of a recession and increased government revenues. Years later the recession hit because of the housing bubble and people stopped paying their mortgages. Some want to blame greed. It would have been easy to stop greed . . . not allow Fannie and Freddie to hold or guarantee trillions in risky mortgages, raise interest rates on money loaned to banks, and do not bail them out when banks fail.

9) Comment by Attila - 10/11/2012

Now you're talking twinkie. Let's give all of the unemployed some ribbons and pencils, and let them stand on the street corners hawking their wares...I am sure that most of them probably cannot make correct change, but at least they wouldn't be on the unemployment rolls...I gotta tell ya twinkie, your solution is the most asinine thing I have ever seen. Please tell me that you have no children.

10) Comment by twinkie1cat - 10/11/2012

The problem with trickle down economics is that it does not trickle down. The wealthy are not the job creators they pretend to be, but use their money to increase their wealth and stop up the colander. Look at what Mitt Romney did with Bain Capital---- take over a business, shut it down, send the jobs someplace where people work for less, get a tax break. The way to improve the economy is to assist small and medium sized businesses so the people are not dependent on government assistance and start paying taxes after a few years. Even micro-economics are helpful as has been demonstrated in countries like Bangladesh where a person may be given a loan of as little as $10 to buy ribbons and hairclips to sell. She sells what she has, and buys more ribbons and pays back the loan. She can start with a basket of ribbons and end up with a booth or even a store. Americans need help to do similarly but on a larger scale.

11) Comment by Whatnow - 10/11/2012

This letter is pure socialist bullnoogies, jealousy and envy.

12) Comment by Attila - 10/11/2012

If Hale is so enamored with "taxing the rich" he is surely a failure at business. As an IT consultant I would expect that he would aspire to making as much money as his ability and work ethic would allow. Instead he parrots the same old lame talking points that sucked in enough voters to give BHO another four years to destroy our country. He is evidently among those poor souls who have trouble succeeding and blames it all on the rich. Here's a tip Hale: Those who earn 250K a year are NOT rich. They DO, however; provide most of the jobs in this country. I guess Hale does not know that 100% of the wealth of all people who are millionaires in this country was confiscated it would not run our out of control government for more than 2.5 months. So much for the "taxing the wealthy" solution to our fiscal problems.

13) Comment by InPVille - 10/11/2012

If the only thing that happens when the rich get richer is that the rest become poorer, kindly explain why the poor in the United States are in far better shape than those in non-capitalist societies. The Keynesian theory which Mr. Hale seems to prefer, trickle down economics FROM THE GOVERNMENT has at least as poor a record as what Mr. Hale decries. The reason the debt went up when the Reagan tax cuts were implemented was not due to the tax cuts in and of themselves but rather because of increases in defense spending and failure of the Congress to implement the spending cuts in other areas which had been promised. Consider what happened when President Bush followed by President Obama and Congress passed stimulus spending, the method touted by the economics Mr. Hale gets so misty eyed over. Not only did not the promised "multiplier effect" kick in as postulated by Keynesian economic theory, but the debt increased at about twice the rate as bemoaned by Mr. Hale and unemployment levels remain high. The most sensible argument Mr. Hale could have offered would be to admit that there is no evidence either economic theory works reliably enough as implemented in practice to be certain of a growing and health economy without ups and downs. The fact is that economic theory isn't advanced enough to guarantee avoidance of economic cycles. In fact this time the Keynesian model has given us the slowest recovery from an economic downturn since at least WWII. That model used with such relish by western society since espoused has had as one of it's trademarks increasingly unsustainable national debts everywhere it has been tried and economic cycles continue as before.

14) Comment by agagent - 10/11/2012

Whether you believe increasing taxes will affect 3% or half of the small businesses, we are dependent on small businesses for most of our jobs. Many jobs will be affected if we increase taxes. Obama used the tax increases on the rich to good effect in his class warfare campaign. Now is time to solve problems and stop campaigning. Some Democrats said Obamacare would help employment. Businesses are laying off employees and decreasing employees’ hours to pay for Obamacare. After a $1 trillion Obamacare tax increase another tax increase could help cause another recession . . . and then we would hear Democrats blaming Bush again.

15) Comment by agagent - 10/11/2012

The Bush tax cuts in 2001 and 2003 got us out of a recession. Revenues increased soon after the tax cuts. The most recent recession and the current deficits are not related to tax cuts as the economy was fine and revenues were at record levels before the mortgage debacle began. The crisis began when people stopped paying their mortgages.

16) Comment by agagent - 10/11/2012

The JFK, Reagan and Bush tax cuts succeeding in stimulating the economy and increasing federal revenues. Even Clinton reduced capitol gains taxes to help the economy. The problem has always been with government spending. When Democrats supported the Reagan tax cuts they agreed that spending cuts would follow. When the proposed Reagan budgets reached Congress Democrats said they were “dead on arrival” and proceeded to break their promise on spending cuts.