Numbers don't lie: wealthy get handouts
Conservative Republican commentators are claiming that the recent presidential election was a victory for those who want something for nothing. They claim the victors are Americans who depend on government at the expense of self-sufficient conservatives. That may be news to all the moderately paid government police officers, firefighters, teachers, etc., who contribute a lot more to American society than the highly-paid conservative commentators. But is the claim even true?
The last three Republican presidents all cut taxes, suppressed regulations and increased defense spending, allegedly to stimulate the economy and increase tax revenues. The tax cuts never did stimulate the economy and near the end of each administration the economy took a downturn. The 1987 stock market crash for Reagan; the 1989 savings and loan failures for H.W. Bush, and the 2008 collapse for W. Bush. In the combined 20 years of the three presidencies they ran deficits every year.
The tax cuts always favored their wealthy supporters. This freed a lot of cash for campaign contributions, culminating in the trillion dollars donated to super PAC's in the recent presidential election. So, who is it that wants something for nothing? It appears that it is Republicans who are dependent on the government. They fund their re-election campaigns by using the national debt like a credit card without any intention of paying off the balance.
Dems just want to blame GOP
The Democrats are asking Republicans to fall in line and help stop the country from going over this looming fiscal cliff. They want the Republicans to co-sign a tax increase on the rich, which most Republicans are willing to go along with if the Democrats will come up with spending cuts. The Democrats seem to want the Republicans to sign off on their tax increase with a promise of spending cuts in the future.
Let me ask this: Would you hire a contractor to work on your house, pay him in full and tell him, "when you can get to it I trust you will come and do the work"? The Democrats know if the Republicans don't get on board and the country goes over the cliff, they will be able to raise taxes on all Americans and be able to blame it on the Republicans.
The point is the Republicans are willing and offering to give some on their principles but they also want something in return, which they aren't seeming to be offered.
To play politics with a fragile economy is ridiculous and will be detrimental to our future. The Republicans have ideas but the Democrats just want to point blame. Get it done.
Consider a consumption tax
The United States has accumulated a federal debt that should concern every citizen of every nation due to the impact our economy has on the world. The U.S. has simply spent more than it has taken in, at levels that are unsustainable, for far too long. As an economics student I've become familiar with many budget proposals, such as Bowles-Simpson, which show that substantial cuts in Medicare, Medicaid and national defense must be implemented. The solvency of Social Security must be addressed as well.
However, even with all these cuts the tax code must become more efficient. There are calls to broaden the overall tax base and lower the rates on income taxation. However, many do not understand that broadening the base means to decrease deductions. This includes the home mortgage deduction. Getting rid of this deduction is of course very unpopular. So, if popular deductions are to remain in the tax code, how does the government bridge the gap in lost revenue? One proposal could be a federal consumption tax. Countless peer-reviewed studies have been conducted on this issue, and there seems to be consensus that a combination of consumption and income taxation can be highly efficient and improve overall welfare in the long run. Just something to think about.
Steven C. Riley
Greed at home and in D.C.
Let me get this straight. Sen. Mitch McConnell and House Speaker John Boehner are fighting for the wealthiest two percent of the population to pay lower taxes. This is said to be because the wealthy create most of the jobs. Just as they did the last several years when many people were out of work? For the religious among them, "From everyone who has been given much, much will be demanded and from the one who has been entrusted with much, much more will be asked." Luke 12:48. While we all can try to do more, the wealthiest can most easily afford it.
Meanwhile, the Kentucky legislature, which meets 60 days in even-numbered years and 30 days in odd-numbered years, passed a bill (some call it the Greed Bill) allowing its members to work three years in the executive branch to get the same pension as state employees who work 27 years. Sound familiar?
Enough cliff news already
Has anyone but me noticed the amount of news we are having to endure about the fiscal cliff? We elected our officials and entrusted our government to them so why should we be exposed to their bickering about what to do?
Why can't they get on with the business at hand, and do what is necessary to get the job done? I am overwhelmed at how much news is printed about their inadequacies.
A very uncomfortable feeling
Well over a year ago, Congress increased the debt ceiling with the provision that there would be $1.1 trillion in cuts made to the federal budget in January of 2013. Now we are being told that this fiscal cliff needs to be averted and this should be done by canceling these cuts and extending the Bush-era tax breaks. Oh yeah, they also want to increase the debt ceiling. Again.
If your net income is $30,000 per year and you spend $45,000 per year, how long do you think you can do this before the banks foreclose and take everything? This is what your government is doing to this country. The 2012 federal budget has expenditures of approximately $3.8 trillion and revenues of approximately $2.5 trillion. This is a deficit of $1.3 trillion, in just this budget. This is neither the first nor the second budget where this has occurred.
Most of us will consider ourselves lucky to earn $1 million in a lifetime. It takes 1,000 million to make a billion and it takes 1,000 billion to make a trillion. The U.S. government presently has debt of $16.3 trillion. The U.S. population is 312 million, therefore, each and every one of us has a debt of over $52,000. A family of five owes over $260,000, in addition to car, house and other loans.
Now don't you feel so much more warm and comfortable about whom you re-elected?
Research debunks tax claims
Republicans' basis for economic growth is to lower personal income and capital gains tax rates. Their premise is that lower rates would spur investment which creates jobs and economic growth.
At a recent joint hearing of the Senate Finance and House Ways and Means committees, Leonard Burman, an economics professor at Syracuse University, presented his findings regarding capital gains tax rates and economic growth. Going back to 1950, his study found no statistically significant correlation between capital gains tax rates and growth. Several other economists have verified his findings.
Another study debunking the rationale behind the Bush tax cut comes from the Congressional Research Service, a non-partisan group run by the Library of Congress. Between 1945 and 2010, the CRS analyzed changes in the top marginal tax rates and economic growth. Their findings found no correlation between changes to the top marginal tax rates for both personal and capital gains taxes and growth. "The reduction in the top tax rates appears to be uncorrelated with savings, investment and productivity growth," the CRS concluded. "The top tax rates appear to have little or no relation to the size of the pie."
This World War II supply-side/trickle-down economic theory the Republicans espouse does not work today. Increasing demand for a product or service is the mechanism that drives economic growth.