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10 years later: A costly tax cut for rich


Auburn85

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http://www.chicagotribune.com/news/opinion/ct-oped-0607-tax-20110607,0,7849214.story

By Rep. Jan Schakowsky

Today is the 10th anniversary of the Bush tax cuts passed in 2001. In observance of this day, we should raise taxes on millionaires and billionaires.

A decade of these cuts cost our nation more than $2.5 trillion in lost revenue. Almost 40 percent of the benefits, or about $1 trillion, went to households with incomes above $380,000.

One of us is a member of Congress and lead sponsor of legislation to institute new tax brackets for income of $1 million a year and above. The other is an affluent taxpayer who has advocated for increased millionaire tax rates and believes those who have gained the most from our nation's economic system should contribute more to make the system stronger. Both of us think raising taxes on millionaires is the patriotic and prudent thing to do for America.

A decade ago, federal budget forecasters projected a 10-year surplus of $5.6 trillion over the ensuing decade. That surplus evaporated thanks to massive tax cuts in 2001 and 2003, plus two wars paid for by borrowed money, and a major recession caused by the recklessness of some big Wall Street banks.

At the same time, extreme inequalities of income and wealth are at their greatest level since the Great Depression. The wealthiest 1 percent of households own more than 35.6 percent of all private wealth, more than the bottom 90 percent of the U.S. population combined. And at the very top, wealth is even more concentrated. In 2007, the combined net worth of the Forbes 400 wealthiest Americans was almost as much as the combined net worth of 150 million Americans — 50 percent of Americans.

Unfortunately, after a generation of tax cuts for high-income earners, millionaires are paying the lowest effective tax rates since before the 1920s.

Republican leaders and many governors around the country are saying "we're broke" and advocating a new austerity of budget cuts. But their proposed cuts hit at the vitality of our communities, targeting college loans, food safety, children's health care and converting Medicare into a voucher program.

"Our country is not really broke," said Cynthia Carranza, who directs a food pantry in Niles. Carranza has watched the increase in hungry people at her food pantry door even as government support for her program is slashed. "We're an incredibly rich and prosperous nation. But our wealth is skewed to a very few fortunate at the top. We're not broken, just twisted."

Middle-class and low-income families didn't create these budget deficits or reap economic rewards over the last generation. So our nation's plan to get our fiscal house in order should not sacrifice the vitality of our middle class and our commitments to address poverty.

Spending cuts should include reductions in our bloated Pentagon budget. We could save more than $1 trillion over the next decade by eliminating obsolete weapons systems and closing a third of U.S. military bases around the world that contribute little to our real security. We can eliminate corporate subsidies to agribusiness and oil companies, saving tens of billions over the next decade.

We should let the Bush tax cuts for high-income households expire at the end of 2012, as they are scheduled to do.

The Fairness in Taxation Act, introduced by Rep. Schakowsky, would generate more than $74 billion in 2011 by adding tax brackets starting at $1 million in income and rising to $1 billion in income. This policy would not only help close the budget gap but would also reduce the extreme inequalities that have led to the erosion of the middle class.

The road forward requires spending cuts and fair tax increases. Let's start the next 10 years off on stronger fiscal footing.

Rep. Jan Schakowsky, D-Ill., represents the 9th Congressional District and served on the National Commission on Fiscal Responsibility and Reform. Mary Liebman founded Rich American Patriots United for a Tax Increase.

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The Bush Tax Cuts didn't drop revenue. Direct revenue to the federal government actually rose after the tax cuts (which is typical when you put money back in the hands of people). In 2004 the U.S. brought in 3.9 trillion dollars in direct revenue. 2005 it went up to 4.2 trillion. In years '06 and '07 it went up each year (4.6 in '06 and 5.1 in '07). If not for the housing bubble it would have continued on that path. So this is another lie to split the country into classes.

Tax cuts create revenue by way of economic growth. Typical spin job by the spending kings of the beltway.

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The Bush Tax Cuts didn't drop revenue. Direct revenue to the federal government actually rose after the tax cuts (which is typical when you put money back in the hands of people). In 2004 the U.S. brought in 3.9 trillion dollars in direct revenue. 2005 it went up to 4.2 trillion. In years '06 and '07 it went up each year (4.6 in '06 and 5.1 in '07). If not for the housing bubble it would have continued on that path. So this is another lie to split the country into classes.

Tax cuts create revenue by way of economic growth. Typical spin job by the spending kings of the beltway.

"They" will never understand that.

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The entire framework over the last several years has been "Clinton raised taxes and we had an economic boom and surplus. Bush cut taxes [for the richest Americans] and we had the biggest economic downturn since The Great Depression."

Notice how the Dem. Rep. doesn't even mention deficit funded Medicare Rx that was passed in 2003.

From a financial standpoint, the wars have cost us over $1 trillion

The TARP bailout in 08 was passed as $700 billion

The 2008 stimulus was around $150 billion

The cost of the 2003 Medicare Rx program of 2003 has been in the 100s of billions

Add these items together and it's roughly $2 trillion.

All of this additional spending yet, the talking point is due to the Bush Tax Cuts with emphasis on "the rich" when Bush cut taxes across the board.

This entire decade has been a bubble and an attempt to reinflate a bubble. The rich didn't cause GM and Crysler to go bankrupt. The rich didn't force people to buy homes they couldn't afford. The rich didn't force people to pursue every line of credit that was made available to them just because it was available to them.

Of course not everyone was guilty of living high on the hog. Some folks got harmed due to: medical bills, jobs lost, death and so forth.

I believe though that the vast majority of the problem was living a debt financed lifestyle with a newer home, newer cars, and other things.

The dot come bubble barely was given time to unwind before the push for housing was made to reinflate the dot com bubble.

Sure, our country hasn't been known to balance the federal budget but just a couple of times over the last several decades, but hardly anyone in Washington wants to be blunt with us.

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This is what I'm talking about.

The tax cuts on the rich are expensive! $700 billion to borrow!

Doesn't bother telling us the cost of the blue circles. Gives the impression that the rich tax cuts cost more than everyone else's tax cuts.
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Does it matter to any of these people the some "rich" folks actually WORKED for their money? I guess you could say that they "own" the wealth. So what they earned it. I don't make near $250k but I get by. The government needs to control spending. It ain't that hard.

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Does it matter to any of these people the some "rich" folks actually WORKED for their money? I guess you could say that they "own" the wealth. So what they earned it. I don't make near $250k but I get by. The government needs to control spending. It ain't that hard.

They don't give a damn about hard work!!!!! It's all about spreading your hard work around to those who are useless to society! That way the Liberals get key votes and build their base.

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