A Breath of Fresh Air on U.S. Tax Policy

03/14/2008

Paul Munnis


When you look at the $156 Billion price tag of the economic stimulus package, add to it the $200 billion that the Fed’s Bernake authorized to rescue our banks with, and then add to that our war expense of $12-14 Billion per month, plus the cost of a redo of our worn out and frayed military, then you are looking at some really big bucks being spent by the U.S. government in the coming years. There is no avoiding it.

As a result tax increases are inevitable because we are borrowed out; yet the bills have to be paid. These bills include huge amounts of interest to be paid on Bush’s borrowed money from foreign investors in the form of Treasury notes.

Understand that if we had stayed with Bill Clinton’s tax approach we would be nearly out of debt by now and the amount of money available to spend on infrastructure would be enormous. We would be the richest nation in the world. Instead we are headed for third world status and that money is going to foreign investors as debt interest instead of to national investment.

So you can thank the GOP for future tax increases. They have guaranteed a tax increase as sure a tomorrow’s sunrise.

All of the present financial chaos has happened on the GOP watch; it has come about because of unfair tax policies by the Bush Administration and mismanagement of the U.S. dollar combined with huge deficits and a failure to provide oversight of banks by a GOP controlled Congress. The GOP has assured tax increases with their mismanagement of our government and mismanagement of war. When taxes go up please remember who caused them to rise and how it came about.

These tax increases are going to happen just by letting the present Bush tax cuts for the rich expire. No votes will be needed for no Bill to renew the tax increases is going to get into Congress to be voted upon. The tax cuts will just expire by law as already provided for. The tax rates will become what they were in 2000 when the Bushies took office. If you could afford to pay your taxes in 2000 then you’ll be able to pay them in 2010.

In the House they approved a budget blueprint that would raise taxes by $683 billion over the next five years. As I said earlier that increase comes by just letting the present tax bill expire and sunset by law.

The news is not grim for the middle class either.

The Senate did embrace Bush tax reductions aimed at low-income workers, married couples and people with children so many families are going to get a tax decrease. Democrats and Republicans are on the same page for this.

The House budget plan would provide generous increases to domestic federal programs but still is designed to bring the government's budget back into the black by letting the majority of Bush's tax cuts expire at the end of 2010. That plan passed the House on a 212-207 vote with Republicans unanimously opposing it.

The Senate voted 99-1 to extend the cuts for some workers as well as couples and parents. Senators voted 52-47 to reject a move to extend tax cuts for middle- and higher-income taxpayers, investors and people inheriting businesses and big estates. These people are controlling the wealth of America and they must be taxed fairly to pay for roads, bridges, and other infrastructure.

So it is the rich who have been getting a free ride and they will now have to pay their fair share once again.

The Senate was debating and voting into the night on a $3 trillion Democratic budget blueprint for 2009. The nonbinding plan envisions a balanced budget in four years and promises generous increases for many domestic programs, but achieves those goals only by assuming major tax increases when Bush's tax cuts expire.

The votes were mostly symbolic, but they put Senators in both parties on the record for when the tax cuts actually expire in three years.

So the Democratic plan is to resume taxing the rich to bring about fairness, balance, and to get the American budget back into the black.

It is quite clear from the voting that if you want a balanced, fair and equitable tax structure after the November elections then vote for Democrats in November. If you want to continue destroying the U.S. economy with a borrow and spend approach and continue with a falling dollar that is causing inflation then vote for the GOP and their “trickle down economics.”

By getting this vote on the record, Democrats have provided some badly needed assumptions to State governments whose taxes are tied intimately to the Federal Tax structure. State governments now know what to expect in the post election time period and they can now set their State taxing policies accordingly. States also need to get their budgets back in the black and can now adjust their tax tables to follow the Federal model.

The rich are also getting a fair warning as a result of this vote and are getting clear signals on the sort of action they need to take in order to protect their wealth in the future.

All in all this puts an end to guessing games – America now knows where Democrats and Republicans will take them. It’s a clear choice that voters can make come this November.