PatsWickedPissah

http://www.bloomberg.com/apps/news?p...d=ae_qkIMkzC88

President George W. Bush argued that general tax cuts -- as opposed to targeted ones -- would be good for the economy. He liked marginal rate cuts to the income tax, and he sought cuts for lower earners. He also fought for cuts in the capital-gains tax rate and taxes on dividends. Clinton could have gone along. She didn't. Mechanically, she questioned the premise of the Bush tax cuts: ``Will we meet the challenges of our time or will we squander this moment on a budget that puts politics first and people last?''

As E.J. McMahon, an economist at the Manhattan Institute, points out, the tax cuts did turn out to put ``people first.'' Lower earning households saw great savings: a single parent of two children under age 17 saw an effective 84 percent cut in tax liability. In 2005, McMahon estimates, New Yorkers got to keep $14.6 billion in earnings that they would have had to pay in taxes without the changes in the federal law.

What's more, the Bush tax cuts were followed by both market and economic comebacks, just as Treasury Secretary Robert Rubin's capital-gains rate cut was followed by the boom of the late 1990s. Federal tax rate cuts did a lot to offset state and local tax increases. Using something called the State Tax Analysis Modeling Program, a software program that tries out different tax scenarios, McMahon estimates that without the federal cuts New York City would have lost jobs. Instead employment grew.

McMahon figures that for the six-year period of Clinton's first term New Yorkers will have kept $60 billion that they would have otherwise paid in taxes. Lots of people in New York don't get a Wall Street bonus. This tax cut was their bonus. Deprive them of it, and you limit the bonuses to Wall Street. You favor the rich in exactly the way that Clinton opposes.

Maybe you wealthy trust fund or Hollywood elite liberals (Kennedy, Kerry, Streisand, Spielberg...) DO get Wall Street style bonuses but us working class folks need tax cuts to keep OUR money for OUR families and to stimulate the economy and provide more jobs.

dryheat44

You make some good points, but it's an awfully short-sighted strategy, and is almost completely politically motivated. As none other than Alan Greenspan said, tax and spend is not a good strategy, however, don't tax but spend is a far worse one.

What are we spending in the Middle East? 1 billion a week was the last I heard. Where is this money coming from? It's borrowed.

We're racking up massive debt on the federal "credit card". The bills will come due, and taxes will have to come back up. Of course W. doesn't care, because there will probably be a Democrat in the White House when it happens, and this cycle will start over again, Republican screws the nation, Democrat comes in, gets house in order, but in doing so gives a boost to the next Republican (I will lower taxes, he bleats to the sheep), who wins and starts screwing the country again.

And try to sell the benefits of a tax cut to the tens of thousands of federal non-military employees who have lost their jobs to make up the shortfall.

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PatsWickedPissah

I agree that tax and spend as typified by this administration is a bad strategy. There is plenty of pork, e.g. Highway Bill, Prescription Drugs for Geezers, that could be cut. War is indeed expensive.

Remember, EVERY tax cut has been followed by an INCREASE in govt revenues.

Patters

Pissah, I'm sure you can see how the author is mixing up numbers to make a political point.

First, wht does this really mean: "Lower earning households saw great savings: a single parent of two children under age 17 saw an effective 84 percent cut in tax liability."

For poor people, income taxes fell by 5%, for the middle class by 2%, and for the rich by 5% (http://www.moneychimp.com/features/tax_brackets.htm). Now, the poor also get earned income tax credits and other benefits, but how what salary and what benefits do they need to see their tax liability decline by 84%. Pissah? Can you answer that one.

After that, the author goes onto say "New Yorkers will have kept $60 billion that they would have otherwise paid in taxes. Lots of people in New York don't get a Wall Street bonus. This tax cut was their bonus. Deprive them of it, and you limit the bonuses to Wall Street." Of course, his article fooled you into believing that an enormous part of that money went to the poor (and perhaps middle class), while the more likely scenario is the extremely wealthy who saw their taxes fall by 5% got the bulk of that money.

Once again you appear to be playing politics rather than presenting a thoughtful point of view, but perhaps I'm wrong, and you'll demonstrate the author's implication that the tax cut was especially helpful to the poor and middle class.

PatsWickedPissah

Lower earning family with 2 kids: the bottom starting tax bracket # got raised and the kids deduction raised.

You calling me playing politics is a hoot. I guess you don't own a mirror.

Patters

You're talking about a single parent with two kids and income of $200/week. That's right, those people are really cleaning up thanks to Bush's tax cuts. Boy, I bet their using their savings to support the Republican Party. What share of the $60 billion would you guess they got? And, I'm pretty sure their big tax savings came from the Clinton era tax cuts in the mid-90s, not Bush's tax cut.

sdaniels7114

You forget to mention things like food stamps and after school programs and housing assistance being slashed to pay for this tax cut. So that particular family ends up with a massive net loss.

What exactly is the cost of leaving say, a 9 year old alone at home while the parents work because the susidised after school program the kid used to attend is gone? Some might call that program priceless.

Bush's domestic tax/spending strategy is so purely political its not even funny. Just look at how much blue states pay in taxes vs what they get in services as opposed to how things work for the red states. Your nightmare scenerio of a liberal confiscating money from one group and giving it to another is happening right now. Its just not based on finances, its based on who falls in line with the neo-cons master plan vs who won't.

PatsWickedPissah

That income is way below NY minimum wage. They'd be on public assistance. Nice straw man though.

Notice how you in your 'non-partisan' manner attribute all that is good to the Clinton era.

Patters

Explain who got the 84% tax break if it's not people in the 10% income bracket (wages under $14K), and also please answer the question as to what share of the $60 billion do you think those people got? You seem to be avoiding this isssues.

If you look at tax trend charts, the big drop came in Clinton's era. I'm basing that on figure 1 on this page:

http://www.npc.umich.edu/publication...briefs/brief5/

All_Around_Brown

That is very perceptive. Thanks

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