Thursday, September 16, 2010

Bush Tax Cuts - How Soon We Forget

I hope Art does not mind, but his letter to the editor in our local newspaper is right on and is something that has to be said. So here it is.

Bush tax cuts

How soon we forget.

The question that is being debated between the two political parties is whether the Bush tax cuts at the end of 2010 will be extended to all taxpayers, allowed to expire for all taxpayers, or allowed to expire for only the rich.

Whenever the term “Bush tax cuts” is uttered, Democratic policy makers and their cheerleaders in the nation’s media make it sound like an obscene expression.

Why aren’t the leaders of the Republican Party reminding our over-taxed, unemployed, and unsure-whether-they-will-have-a-job employees, retirees, or any other citizens that are on the tax rolls what exactly the Bush tax cuts accomplished?


I guess our revered Republican Party leaders have a temporary memory loss or for the elderly leaders, a senior moment.

Therefore, I will contribute my free time for the good of the Republican Party in order to jolt everyone’s memory.

The 2001 Economic Growth and Recovery Tax Act was George Bush’s version of Obama’s stimulus plan.

However, instead of creating a bunch of temporary government jobs and subsidizing the expansion of government, it cut tax rates, increased the child tax credit, increased the standard deduction for married couples, and increased contribution caps for a variety of savings programs.

The result? The recession ended in November of 2001.

But, September 11, 2001 happened as the economy was recovering and throughout 2002, the economy grew at an anemic rate.

The Jobs and Growth Tax Relief Reconciliation Act of 2003 revved up the 2001 tax cut package and cut taxes again on dividends and capital gains.

The result? What the Democrats and the media call “tax cuts for the rich” resulted in the rich paying more in taxes in 2005 than in any time in the prior 20 years.

Thanks to the much maligned George Bush, his tax cuts for the rich resulted in the richest one percent paying 25% of all income taxes in 1990 to 39% in 2005.

The richest 5% went from paying 44% of all income taxes in 1990 to paying 60% of all income taxes in 2005.

Likewise, after the 2003 tax cuts, the unemployment rate fell to the lowest level since World War II.

At that time, economists likened it to full employment given the demographic composition of those who were left on the unemployment line.

Reasons for the collapse

Why then the collapse we are suffering today?

There are lots of reasons for the collapse.

For one thing, contrary to what all economists would have you believe, they are not scientists and the economy is not a science.

Think about the past.

There have been upturns and downturns in the economy since economies first developed several hundreds of years ago.

Also, massive new regulations in Sarbanes-Oxley and the Dowd-Frank corruption in Freddie and Fannie into private lending markets forcing private lenders to launch risky ventures to stay profitable led to a lot of schemes collapsing in on themselves and taking the economy out too.

That has nothing to do with the Bush tax cuts.

The Bush tax cuts, objectively, helped the economy both recover from the 2000-2001 recession and spur some of the greatest economic activity the nation has ever seen.

Risks involved

In their efforts to end the Bush tax cuts during a prolonged recession, the Democrats risk making the economy worse and introducing greater uncertainty into the market.

Making the economy worse is exactly what the radical Democratic/Progressives want.

They are out to “fundamentally remake America” and to do that they have to “introduce greater uncertainty into the market.”

Voters, remember this in November, and in years — even decades to come.

We have to get rid of not only the politicians who want to destroy this country, but also the bureaucrats who support their plans.

If we do not remain strong economically, militarily, politically, and religiously, we are doomed.

As soon as we are weak enough, or perceived to be weak enough, the attacks will come from all who envy our prosperity or hate our freedoms.


Art Blenk

Pawleys Island

Georgetown Times

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