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| Bush: 43M families hurt if tax cuts expire |
| 2008-06-03 |
| A lotta Dems probably torn between their suicidal desire to flagellate themselves with higher taxes and buying votes. Except it's W who came up with this idea, so I guess the Hair Shirt wins again. President also says small business owners will take a hit if lawmakers fail to extend his 2001-03 tax relief. But critics say that's not necessarily the case. President Bush on Monday called on lawmakers to make his 2001 and 2003 tax cuts permanent or risk what the White House has tagged "the largest tax increase in history." Allowing the cuts to expire would add $1,900 to the tax bill of a family of four with an annual income of $60,000, Bush said. All told, he added, 43 million families with kids would have to pay an average tax increase of $2,323. "It means a lot if you're trying to save for your family," Bush said. "It means a lot if you're worried about gas prices. It means a lot if you're a hardworking American family." Yeah, Dems. There's how you can mitigate the higher price of gas for those who can afford it the least. Whaddaya think? Or would you rather have something more tied to Dem efforts? But the political reality is that it's unlikely the tax cuts would be allowed to expire for low- and middle-income families, who have been hurt by the economic slowdown and the rise in food and gas prices. "No one wants to see them all expire - it would be a large tax increase," said Roberton Williams, principal research associate at the Tax Policy Center and the former deputy assistant director for tax analysis at the Congressional Budget Office. While Bush has campaigned for years to permanently extend the cuts - all of which sunset by 2011 - his successor will be on the hot seat when Congress debates the issue. And none of the candidates hoping to succeed him has called for tax increases on lower- and middle-income families. Presumptive Republican nominee John McCain has called for the extension of all the tax cuts, while his Democratic rivals Barack Obama and Hillary Clinton have proposed extending them for everyone except high-income taxpayers. Small business impact Supporters of the tax cuts contend that letting them expire - even if only for high-income taxpayers - can be detrimental to the economy. "It turns out that 75% of taxpayers who benefited from the reduction of the top bracket were small business owners," Bush said, noting that small businesses pay taxes at individual income tax rates. "So when you hear 'tax the rich' you're really talking about taxing Mom and Pop businesses." Williams said that it's true that the majority of taxpayers in the top income tax bracket (currently 35%) report business income, but those taxpayers don't represent the majority of small business owners. According to a Tax Policy Center analysis, over 90% of small business owners report income that puts in them in the 26% tax bracket or below. Many of the top-bracket taxpayers who report self-employment income get most of their income from salaries, investments and stock options, Williams said. Of those taxpayers, only 50% make more than half of their total income from their business, and 25% get less than a tenth of their income from their small business, he said. Supporters of the tax cuts contend that allowing them to expire can have the adverse effect of reducing expected tax revenue for the government. Their argument: Americans would have less incentive to make more money and instead step up their efforts to avoid paying tax at all. With the tax cuts in place, tax revenue made up 18.9% of gross domestic product last year, said Larry Lindsey, who headed the president's National Economic Council in 2001 and 2002, at a panel discussion in Washington, D.C., preceding Bush's remarks. "That's higher than all but 11 of the last 60 years.... The only cause of revenue growth ... is economic growth." Budget deficit looms But critics of the tax cuts say Washington simply can't afford them given the budgetary pressures that will result from the war in Iraq, possible changes to the Alternative Minimum Tax and the growth in Social Security and Medicare. As more Baby Boomers retire, economists don't believe the economy can grow enough to offset the anticipated increases in spending on those entitlement programs. Williams concedes "we don't know how much revenue would go up" if the tax cuts are left to expire. But, he said, "we know the budget deficit will get larger if we extend them." The Tax Policy Center estimates that an extension of the cuts for everyone except high-income taxpayers could cost $783 billion over 10 years. Tax cut supporters are urging lawmakers not to wait until 2010 to make their decision about Americans' tab with Uncle Sam. "Imagine if you're trying to plan - plan your life, plan the future for your small business - and you don't know whether or not Congress if going to keep your taxes low," said Bush. "It makes your environment more uncertain." Of all the arguments in the debate over the tax cuts, that's one with which even critics can agree. |
| Posted by:gorb |
| #4 "socialism doesn't work because ultimately socialism is not really evil it's just plain stupid" Have to disagree, Broadhead - it's evil and stupid. |
| Posted by: Barbara Skolaut 2008-06-03 19:02 |
| #3 I'm reasonably close to retirement. Have a very large unrealized capital gain in my retirement account. Expiration of the capital gains tax treatment of those gains (15%) to regular income would be worth several years of retirement to me. If I think the Bush tax changes are going away, I need to retire before they do, or I am working the next few years for, effectively, free. |
| Posted by: Glenmore 2008-06-03 18:50 |
| #2 Or, to put it simply.... Don't confuse Barack and his buddies with the facts... They always clutter the mind.... |
| Posted by: BigEd 2008-06-03 18:35 |
| #1 Dems are so stupid about tax cuts..they envision and mentally masturbate to it supposedly hurting corporations and the evil white industrialists like the bald old dude from the Simpsons ("excellent smithers")..all of whom pass the overhead onto the consumer (econ 101) in actuality it does hurt small business owners and even more so those who are working hard to break into the higher tax brackets i.e. new money and young families...socialism doesn't work because ultimately socialism is not really evil it's just plain stupid. |
| Posted by: Broadhead6 2008-06-03 16:28 |