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News & Politics News & Politics

REPORT: Expiration Of High-End Bush Tax Cuts Would Have Little Effect On Economic Growth

Posted by on Sep. 24, 2012 at 8:50 AM
  • 32 Replies
United States is approaching the so-called “fiscal cliff” at the end of 2012, when a set of policies enacted by the debt deal reached in August 2011 will go into effect. In addition to massive spending cuts, several tax provisions will expire, including the full Bush tax cuts.

Though both the GOP and Democrats agree that the low-end Bush tax cuts, those that give everyone a tax cut but primarily affect the middle class, need to be extended, Republicans have blocked that in order to leverage an extension of the upper-income tax cuts. The logic, Republicans argue, is that not doing so will raise taxes on “job creators” at a time when the economy can least afford it.

An analysis of the fiscal cliff policies by the Economic Policy Institute, however, found that the cost of the Bush tax cuts —and particularly those for high-income earners —far outweigh the benefits:

EPI’s analysis found that letting the entire Bush tax cuts package expire would cause “just over one-third” of the damage of letting the stimulus measures (primarily made up of the payroll tax cut and other middle class tax cuts) expire and less than half the damage of the spending cuts. The high-end Bush tax cuts, as the chart shows, account for 7.3 percent of the cost of the fiscal cliff policies but just 2.3 percent of the economic benefit, meaning their expiration would save a substantial sum of money with a negligible effect on economic growth.

The findings are similar to an earlier report from the Congressional Budget Office that found the expiration of the high-income Bush tax cuts, once multipliers are added, would cause far less economic damage than spending cuts to the discretionary budget favored by Republicans.
http://www.epi.org/publication/ib338-fiscal-cliff-obstacle-course/

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by on Sep. 24, 2012 at 8:50 AM
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Carpy
by Platinum Member on Sep. 24, 2012 at 8:54 AM
2 moms liked this

Tax cuts do not cost money.  To think so, assumes all money belongs to the government and they just allow you to have what they deem you deserve.  Government does not live within its means.  That is not the fault of the workers who earn their money.

Carpy
by Platinum Member on Sep. 24, 2012 at 8:55 AM
2 moms liked this

Any article that refers to the "cost" of tax cuts is completely discredited by my standards.

mommom2000
by Bronze Member on Sep. 24, 2012 at 9:09 AM
3 moms liked this


Quoting Carpy:

Tax cuts do not cost money.  To think so, assumes all money belongs to the government and they just allow you to have what they deem you deserve.  Government does not live within its means.  That is not the fault of the workers who earn their money.

LOL Of course they do,where do you think the government receives it's revenue. Saying taxes don't matter is one of the more crazier right wing talking points. Bush cut the taxes and did it spur all this growth like he said.  Trickle trickle it's a myth.

itsmesteph11
by Silver Member on Sep. 24, 2012 at 9:24 AM
2 moms liked this

 Our economy might not suffer too much (though I am not convinced of that)but the unemploymnet situation will not get any better and will probably get worse. 

The arguement that the raise in tax dollars (the amount recieved we know might actually run the gov. for a week) will outweigh spending cuts is doubtful especially since they don't say what would be done with the money.  We know Obama wants to further his agenda with it which is usually done by wasting money and doesn;t include debt reduction. Sooooo,  how is giving Obama more money to waste going to help us?

ambertreas76
by on Sep. 24, 2012 at 9:29 AM
1 mom liked this

Tax cuts do not cost the government money.  High taxation does.  When the taxes are elevated, so is government spending.  In 2013 our taxes will be increased by 2 billion at least which will result in 8 billion or more government spending.  All of the policies that take effect which raise taxes, raise government spending.  Once that starts to happen, tax increase is needed again, increasing spending even more.  Look into the pillars of Reaganomics for some facts on what happens with increased taxation.  

Also, higher taxes do result in more administration kickbacks... ie more money in the admistration pocket and less in ours.

itsmesteph11
by Silver Member on Sep. 24, 2012 at 9:30 AM
3 moms liked this

 

Quoting mommom2000:

 

Quoting Carpy:

Tax cuts do not cost money.  To think so, assumes all money belongs to the government and they just allow you to have what they deem you deserve.  Government does not live within its means.  That is not the fault of the workers who earn their money.

LOL Of course they do,where do you think the government receives it's revenue. Saying taxes don't matter is one of the more crazier right wing talking points. Bush cut the taxes and did it spur all this growth like he said.  Trickle trickle it's a myth.

 Tax cuts under Reagan and Bush brought in more money to the treasury. It's a fact that liberals hate to admit.  

mommom2000
by Bronze Member on Sep. 24, 2012 at 9:32 AM
2 moms liked this

That's why Reagan had to go back and raise taxes 11 times. II is a fact that the Bush tax cuts have added to the deficit, not an opinion.

Quoting itsmesteph11:

 

Quoting mommom2000:

 

Quoting Carpy:

Tax cuts do not cost money.  To think so, assumes all money belongs to the government and they just allow you to have what they deem you deserve.  Government does not live within its means.  That is not the fault of the workers who earn their money.

LOL Of course they do,where do you think the government receives it's revenue. Saying taxes don't matter is one of the more crazier right wing talking points. Bush cut the taxes and did it spur all this growth like he said.  Trickle trickle it's a myth.

 Tax cuts under Reagan and Bush brought in more money to the treasury. It's a fact that liberals hate to admit.  


mommom2000
by Bronze Member on Sep. 24, 2012 at 9:36 AM
3 moms liked this

Is that true of the Clinton years? Higher taxes plus surplus.  Obama and the democrats were willing to put spending cuts on the table,the other side says no revenue.  You need both to fix this problem, spending cuts and revenue.  They were willing to do that.

Quoting ambertreas76:

Tax cuts do not cost the government money.  High taxation does.  When the taxes are elevated, so is government spending.  In 2013 our taxes will be increased by 2 billion at least which will result in 8 billion or more government spending.  All of the policies that take effect which raise taxes, raise government spending.  Once that starts to happen, tax increase is needed again, increasing spending even more.  Look into the pillars of Reaganomics for some facts on what happens with increased taxation.  

Also, higher taxes do result in more administration kickbacks... ie more money in the admistration pocket and less in ours.


Jesi_79
by Member on Sep. 24, 2012 at 10:11 AM
2 moms liked this

So if there will be little economic impact why increase the taxes?  if the government is going to confiscate wealth of some there should be some economic growth or other societal improvement where all will benefit, including those paying the higher taxes.  Otherwise it is just redistribution.

The government is doing things exactly backwards, tax increases should be temporary and have sunset provisions.  

 

Carpy
by Platinum Member on Sep. 24, 2012 at 10:19 AM
1 mom liked this
Actually yes, the tax cuts worked. What did not work was the out of control spending. progressives should love Bush.

Quoting mommom2000:



Quoting Carpy:


Tax cuts do not cost money.  To think so, assumes all money belongs to the government and they just allow you to have what they deem you deserve.  Government does not live within its means.  That is not the fault of the workers who earn their money.


LOL Of course they do,where do you think the government receives it's revenue. Saying taxes don't matter is one of the more crazier right wing talking points. Bush cut the taxes and did it spur all this growth like he said.  Trickle trickle it's a myth.

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