Please explain the justification for the Bush tax cuts

reply to post by iamcamouflage


the "rich" use there money to invest in new markets. with those extra tax cuts they are able to keep more of there money and through there "greed, human nature" they expand there company to make more money in turn hiring more people.

yes having more money for the middle class would make it so they purchase more from the rich but if the rich cant hold onto it to open up more markets your not going to get more people hired.

I know this first hand. my fathers wants to expand his company but will not based on the unknow of what the companys new tax brakets are going to be for 2011. if he has to pay 500,000 in more taxes he cant open up that new branch in that new market because he has to use that money to pay the goverment so the goverment can P*** it away.

Originally posted by Curiousisall
I am no expert on the economy and even less so on tax law but I really just do not understand some things here.

First I do not understand the concept of giving the rich more money will create jobs. When and where has this ever happened? Since when does anyone take on new employees simply because they have more money? Is there a company ou there doing this?

Second, I do not understand what is taking so long. How long have we been waiting for these tax cuts to translate into jobs now? It seems to me that we have been trying this out since Reagan and it has only really gone one way. When do these tax cuts start creating jobs?

How does taxing the rich de-incentivise them to become rich? Who on the planet would choose to have a net gain of say 20 grand a year over a million just because they were taxed more?

I am sure I have some more questions but as often as I see people try to say we need to extend the tax cuts for the most wealthy in America, I have yet to see an actual reason.

It's my money and they don't have the right to take it and give it to someone down the road who won't work for a living, or is the friends of the democrat party.

I certainly appreciate all the replies. I did not expect so many is such a short period of time. I hope it does not seem as though I just left this to fall here. I am trying to catch up and keep up on 100 other threads so I do at least for now want to thank anyone and everyone that has taken a moment to respond and I hope to learn something from all this as I already have some new questions. I will be getting back around to all these posts.

reply to post by pavil


Not everyone can own a business. It is impossible. Businesses need people to work at them. A business needs employees. If everyone owned a business, they you wouldnt have any people to work for you.

I work with a group of people from various backgrounds and fields, we are all on our way, none of us through inheritance or just dumb luck. Trust me, our stories are all the same, we didn't start with much money, but we had the passion to make our various endeavors work.

I think you should read "Outliers" by Malcolm Gladwell. Where you were born, your neighbors, the help you had along the way all contribute to where you are. And not everyone has the same opportunities.

I find that the more I hire people to do jobs I used to do, the faster my business grows. For example if I had a lawn service and I do all the work, there's a limit on what I can make. If I hire two crews and just market my business, I can keep growing and growing till I have 22 crews for example.

This only works IF you have demand for your service. If the people who are supposed to be buying your service, cant afford to, you cant make more money by hiring new people.
No business in their right mind would hire a new employee unless they have a demand for their product or service. This would be completely foolish.

This is precisely why you won't become rich, you think you can't do it.

There are lots of people who work hard, believe that they will be rich and do the extra things that it takes, but they still dont ever be come rich. Want proof? 90% of our population make less than 100k.

There is no magic process to become rich. If there was you might see more balance between rich and poor.

Even if the person with the $500,000 saved it, it will probably go into a CD or a Municipal Bond. That frees up $500,000 to be lent or more money to be used for other purposes that effect the economy in a positive way.

This type of investing does not help the economy in the way that spending it on consumer goods does. And with regards to banks lending money to boost the economy. How is that working out? Banks are flush with cash and they still arent lending.

There is NO statistical connection between lowering taxes for business and increased employment or prosperity. This is a lie perpetuated by wealthy business owners who want to make more money.

Henry Ford was incredibly successful and he did it with improved efficiency in manufacture of his vehicles, combined with increasing the wages of his employees to $5 a day, which was unheard of at the time(1914). He paid his workers enough so that they could afford to buy the cars they were making. By 1927 the last year of the model tax rates on corporations had increased from 1% in 1914 to 13.5% in 1927. He had increased his wealth substantially in this time frame.
Corporate Tax Rates

The 1950s had some of the highest business tax rates ever and was marked by one of the most prosperous times in American history.

Starting in the mid 80s we began to see business tax rates start to decline up to 20% lower than they had been in 40 years. It is at this time we start to see the divide between rich and poor increase substantially. We start to see a decline of the middle class and more families that require both parents to work.

Ok here is a theory. Maybe Bush thought that if he lowered the taxes on the rich. It might convince them that paying taxes really wasn't so bad so they should start doing it.

What a bunch of silliness. Bush2 screwed American economics. Killed hundreds of thousands of PEOPLE, i.e. Human Beings. For what?.. perhaps avenge his Dad's attempted assassination by Saddam's past intention.

Are you people really going to bring back republicans to a majority congress or presidential white house or both?
NUTS. The only justification for Bush2 tax cuts was for the wealthy, the rich.
He passed it through, the then, Republican majority Congress.

Obama, President. Inherited a trillion dollar deficit, yet his financial plan was not conceived and sublimated on this fact. It was an election promise based on slightly-LESS interned USA financial troubles.

Wake up. President Obama's on your side. The side of poor and middle class Americans. Socialist???? I hope so. People can look after people and none starves to death. Yes, I'm Canadian. But we as a People have a social safety net, in that the sick and the poor will not be put aside here.

God bless our American Friends, daughters and sons in need.

Decoy

Originally posted by iamcamouflage


I think you should read "Outliers" by Malcolm Gladwell. Where you were born, your neighbors, the help you had along the way all contribute to where you are. And not everyone has the same opportunities.

I was born in the City of Detroit in a very lower middle class neighborhood at the time. Now that area is looks like a warzone. Don't give me that line.

This only works IF you have demand for your service. If the people who are supposed to be buying your service, cant afford to, you cant make more money by hiring new people.
No business in their right mind would hire a new employee unless they have a demand for their product or service. This would be completely foolish.

Well Duh!!, no kidding. But my analogy stands, IF you are a business that is successful, you will be limited if you do all that work yourself.

There are lots of people who work hard, believe that they will be rich and do the extra things that it takes, but they still dont ever be come rich. Want proof? 90% of our population make less than 100k.

If you are working for someone you can make money, but you usually can't achieve wealth. You need to take the risk and get the reward of owning your own business, IMO.

This type of investing does not help the economy in the way that spending it on consumer goods does. And with regards to banks lending money to boost the economy. How is that working out? Banks are flush with cash and they still arent lending.

There is NO statistical connection between lowering taxes for business and increased employment or prosperity. This is a lie perpetuated by wealthy business owners who want to make more money.

Banks are tight with their lending, that is true. Banks should be very conservative with their lending.....Easy credit was the dynamite that blew up this economy in the first place. Once a upon a time Banks actually visited your neighbors and workplace to assess your creditworthiness, and even then you have to plop 20% down. Some banks are starting to open up their commercial lending, which is good news. The ones that open up the lending the right way will be in a great position.

I work with a number of small to mid sized businesses in my business. I can tell you to a company, not one business is in favor of even more taxes on them. Many have postponed major purchases, even though there is an incentive for them to do so. Many have had lines of credit reduced or eliminated. The Obama administration is not inspiring a very business friendly environment to the business people I know.

Those businesses that have survived are lean from this recession/depression, they have no more "fat" to give to the government. Small businesses drive our economy, we need to let them thrive in an environment that assists them growing, not saddling them with more expenses. Small business owners feel like they are being ignored by the Obama Administration, when we could use a little "bailout" just like everyone else seems to have gotten.

The 2008 income tax data are now in, so we can assess the fulfillment of the Republican promise that tax cuts would produce widespread prosperity by looking at all the years of the George W. Bush presidency.

This is just another nail in the coffin for these cuts for the rich.

-Total income was $2.74 trillion less during the eight Bush years than if incomes had stayed at 2000 levels.

-Had incomes stayed at 2000 levels, the average taxpayer would have earned almost $21,000 more over those eight years. That's almost $50 per week.

-Even if we limit the analysis by starting in 2003, when the dividend and capital gains tax cuts began, through the peak year of 2007, the result is still less income than at the 2000 level. Total income was down $951 billion during those four years.

-Average incomes fell. Average taxpayer income was down $3,512, or 5.7 percent, in 2008 compared with 2000, President Bush's own benchmark year for his promises of prosperity through tax cuts.

LINK

Economists have reckoned that for every $100 dollars in tax cuts the government gives the rich, it recoups only $40 in increased economic activity.

It's pretty simple really. The middle and working classes tend to spend whatever they get in income about as soon as they get it. This is an economic necessity, as most are living on the edge. Their money, then, goes directly back into the economy and stimulates it.

The rich, on the other hand, generally do not go out and buy consumer goods with their tax cut money. They already have everything they need. Instead, any additional income is saved, hoarded or invested so it will make more money for them. It does not go directly back into the economy.

In the 1950's and early 60's in the United States, there was a period of unprecedented prosperity. This prosperity was achieved not by tax breaks for the rich, but by the fact that due to union pressures and other social conditions wages were increased for those at the bottom of the income ladder. This pushed up wages for the next rung up, and so on. As more and more people were able to join the middle class, and had more disposable income, there was a huge increase in consumer demand for everything from the basics like better food and clothes to household appliances to luxury items like cars.

The economy was humming. Not because money was "trickling down" from the wealthiest citizens but because of "bottom up" prosperity. It can happen again.

BTW: I do not believe that tax cuts for the rich necessarily create new jobs. Most businesses and corporations use the fewest possible employees they can get away with and demand as much productivity from each as they are able to give. This practice does not seem to change in times of economic prosperity. Many businesses eventually go to other countries anyway, where human labor is cheapest, even in times of surplus. Profits tend to be reflected in bigger dividends for shareholders, more bonuses for top management and etc. Keeping the people at the top happy.

if 90% of the population makes less than 100, 000 wouldnt it make sense to give the 90% a tax cut? that would give a higher number of people disposable income that would help the economy as opposed to letting the top tier keep more of their money, people who are already living comfortably i might add. what busts my chops is that the rich will always find loopholes and ways around paying their fair share of taxes anyway.

i'm no economist but what do u think of all wage earners paying 10% of their income no matter what, no write offs, no ifs ands or buts. would the amount of money generated be more than the amount currently collected by the government?

reply to post by frimilden


A quick look at median family income yields this:

2000-----$41,994

2004----$44,389

2008---$48,201

2010---$46,326

Originally posted by Crakeur
Bush's tax cuts were done years ago and after his cuts, our economy did improve and things in the US were better until the banking crisis put a halt to that.

Bush cut taxes for everyone, not just the rich but, to answer your question as to why cutting the taxes for the rich, or anyone, is expected to help the economy and provide jobs, look at it this way.

The answer is already going to be deceptive at best. I did not ask why cutting taxes for anyone would help the economy and provide jobs. I specifically asked about tax cuts for the rich.

I am more than aware that if an average income home gets a tax break, that money will mostly go back into the economy in the form of living expenses. That same tax break does not translate the same way for someone with many homes, cars, cooks, stocked pantries, the best health care the world can give - paid in full.

If you suddenly see a 5% drop in your annual taxes, you should, in theory, have more money in the bank at the end of the year. This should translate into your spending more, since you now have more. If you went from getting no refund to suddenly getting back $5000, you might buy that tv you wanted or take a trip with your significant other. That spending boosts the economy.

I guess you miss the real question here. I understand some people believe in this theory. Unfortunately I have not been living in a cave for the last decade and I have seen first hand how this theory has failed time and time again.

In theory, if you cut the taxes of the top 5% earners in the country, they will get back more money and they are more likely to spend it than, say, the bottom 5%.

On what? I would spend it on my many bills. What does someone making several million a year spend it on? Exotic vacations to Utah and the finest imported New York Cheese Cakes?

Butt, again, Bush cut everyone's taxes, not just the wealthy.

I guess I would have to see the numbers. Since most people that are wealthy already have any number of odd tax shelters and so many US corporations are not off-shore to avoid paying taxes, I would like to see just how evenly those tax cuts were actually distributed.

Originally posted by Snarf
reply to post by Curiousisall

 

First I do not understand the concept of giving the rich more money will create jobs

Well, its actually a simple concept.

The more money people have...the more money they spend.

Then it gets a little complicated. What have the rich been spending their "more money" on for the last ten years? What goods and services have been booming because the rich got tax cuts? I see a lot of rich people spend money on other money. It is invested in the kinds of wonderful products brought to us by the likes of AIG that have done nothing to help the economy have they?

If a man makes 500,000 a year from his business, and you come in and take away 200,000....he's not going to settle for 300,000 and he's going to "trim some fat" from his company to help compensate.

That is not tax breaks, that is loss of revenue and a poor way to sidestep the actual premise.

Business owners are in business to make money, not to create jobs. Job creation is a bonus.

Business owners do not make more money by having employees that do nothing nor do they make more money by cutting themselves off at the legs. If they cannot meet demand, they suffer. If demand exceeds resources, they make cuts. Have you ever run a business?

Its the same thing where if you worked at a job that offered incentive bonuses. YOUR motivation is to work harder so that YOU get more money. The bonus side effect is that your EMPLOYER gets more money, which is all he's interested in.

That applies to tax breaks how?

He knows that if he dangles more money in your path, that you'll work harder and make more money for him.

That applies to tax breaks how?

Who gives a damn what the intentions are, if the outcomes are advantageous to both parties?

Because I have watched it destroy the US economy for the last decade and people like you still say it works. Actually, I have been watching it destroy the US economy for 30 years but people like you only know it by the new terms.

Originally posted by semperfortis
The Bush Tax Cuts, significantly reduced my taxes..

Repealing them will be a MAJOR hardship on me..

I'm a COP..........

You do the math..

Those that say the Bush Tax Cuts are only for the wealthy have no idea what they are talking about..

Now THAT is a fact..

Semper

Two mods already? I guess ATS has spoken on this then.

Thanks tons for your replies but I specifically asked how tax cuts for the RICH were supposed to CREATE JOBS and when that was slated to kick in. You answer addressed none of those things.

As it seems ATS has an official opinion on this, I guess it was a stupid question to ask as thanks to everyone that did reply but I will leave this thread to the mods then.

During the Bush Administration my husband and I paid less taxes (more tax cuts) than our cleaning lady.

We own 2 houses, she none.

We made over 140,000. per year

She under 25,000. per year.

While I am at a point where I believe Democrat / Republican, are just different sides to the exact same coin, it does appear Obama is trying to reverse the rich not paying their full share.

Now, who owns the media? The really rich...........and they have brainwashed the average person to praise Bush and blast Obama.

Bush gave huge tax cuts to the upper and rich class.

Just my own opinion.

In Paul Waldman's book, "Fraud" he documents 262 lies from George W. Bush Jr.

Lie to me once shame on you.

Lie to me twice shame on me.

Lie to everyone 262 times.............

Our country cannot afford to extend Bush’s tax cuts
by Louise McCollum Rn T.Com
18 hrs ago | 198 views | 2 | | 5 | |
A report by the Center on Budget and Policies Priorities stated that: “Extending President Bush’s tax cuts and AMT Relief for the top 1 percent (as the Republicans wish to do) would cost $4.4 trillion through 2018.

Once the tax cuts are fully in effect, their annual cost (not including service) will amount to $400 billion per year. In 2007 terms, that amount is about 8 times what the federal government spent last year (2006) on K-12 and vocational education and about 10 times what it spent on hospital and medical care for veterans.

In today’s terms, that amount also exceeds the combined 2007 budgets of the Department of Education, Homeland Security, Housing and Urban Development, Veterans Affairs, State, Energy and the Environmental Protection Agency.

How I wish the electronic media was as interested in showing those amounts as they were in showing the health-care program might cost $800 billion to $1 trillion over 8 to 10 years. The 44 million uninsured are brushed off as though they were of no more importance than a gnat on an elephant’s rump.

According to a report by the Boston Consulting group:

“Millionaires in the U. S. and Canada saw their wealth increase by 15 percent in 2009, to a total of $4.6 trillion. Their report was in stark contrast to more than 15 million people in the U. S. who are unemployed and searching for work, and 8 million more who are getting by on part-time work.”

Lawrence Mishel, president of the Economic Policy Institute, told a panel of the Committee on Ways and Means Committee: “The nation’s job crisis is so catastrophic that unless Congress acts on the scale of the New Deal, millions of Americans will experience extremely long periods of unemployment for many years ahead.

Ask our congressmen how citizens of average-income might save enough to pay for medical expenses without insurance, live in retirement without Social Security, pay for means get to work; pay for housing; buy food, clothing, rear children, etc.

Many of those on Social Security today have paid for their benefits since 1937. They did so by having 7 percent taken from their checks each week and the employer matched it.

Congress has gone into trust funds for both federal and private retirement to the tune of approximately $4 trillion.

As Sen. Conyers stated to the finance committee: “If private enterprise spent the trust funds as Congress has, they would be in jail rather than the Congress.

LOUISE McCOLLUM, Gore - Source: romenews-tribune.com...

The Wisdom and Folly of the Bush Tax Cuts
Tax cuts from George W. Bush's era contributed to today's huge budget deficits. But most economists say the economy is too weak to let them expire. That means the fiscal war in Washington is only going to get uglier.

For the rest of this article and Source: www.businessweek.com...

I won't even get into the Bush Administration possibly being behind 911 and getting us into a trillion + dollar war. Don't get me started on that.................most people just keep reading those romance novels and watching Dancing With The Stars vs researching what is really happening in Washington.

reply to post by Curiousisall


Well, how it created jobs...............Thanks to George W. Bush, I could afford to have a cleaning lady and a garden service.

Now, I am cleaning my own house and doing my own yard work.

What happened to my avatar?

reply to post by ofhumandescent



Well based on some general assumptions:

Your base tax rate before and after the Bush Tax Cuts were 31% in 2000 and 28% in 2010. Those are almost double the tax rate of your maids base tax rate. The big difference is that you are married and have (quite probably) hefty itemized deductions that have nothing to do with the Bush Tax Cuts.

Your maid paid about $4,400 in total taxes (1,259 in income and $3119 in S.E. tax). That is assuming she reported all her income from you. You maid suffers from being single and unable to take itemized deductions.

You paid on $140,000 of income, about $16,600 in taxes assuming kinda average homes and mortgages and other deductions. You greatly benefit from itemized deductions and being married. You probably contributed to a retirement plan which helped you as well. If you could only take the standard deductions you would have only got a refund of about $600.


You probably had about $22,500 withheld if you claimed 3 on your w-4.You got a refund of around $6,600 primarily because you probably overpaid your withholding the whole year, giving the government a interest free loan of that money.

These are rough estimates only.


If your Housekeeper had a small child, she would have been getting a refund of approximately around $2,000, if not more.

You paid almost 4x the amount of taxes your maid did, not even including the property taxes you paid. You just get to work the tax system better by utilizing deductions.

Would you rather you got a $600 refund?

reply to post by pavil


Again you fail to calculate what it cost just to get by. Someone who is making $25k a year is struggling to get by. They will pay for food, housing, utilities, clothes, etc. Higher taxes prevent them from buying the basic necessities. Someone who is making $140k will barely notice a 3-4% increase in their taxes. It might prevent them from buying new carpet or a fancier clothes or other non-essential items.

The design behind taxing the rich more, is that they will be impacted less by an increase. They can B&M all they want but fact of the matter is, they will barely notice that increase and it will not prevent them from surviving. And the rich SHOULD pay back into the system that allowed them to become wealthy to the point that they dont have to worry about money or food, or housing or transportation or clothing or bills or anything financial for that matter.

The person who makes $25k will notice almost any tax increase as it prevents them purchasing basic items to survive.

I did not read yet all replies but I can answer that question very easily : the tax cut for the richest people is first of all to make it possible they give more money to the system, the good old party, when the time for elections comes !!
you tell the richest people : we give you less taxes to pay, do not forget us when we need your money and by the way you have more money now to pay those politicians that will vote laws in your favour ( Monsanto etc !!! ).
It is all blackmail.
Nice system up there you know, where you can bribe politicians from Congress to vote in favour of the laws in your favour. Real democracy, yeah, very real democracy.