Wednesday, July 21, 2010

Give Big Business a Tax Break – Not

It seems that the only thing that will save the economy is a tax cut… so says the majority of conservatives. Conservatives want to give Big Businesses tax cuts; they want to give tax cuts to small businesses; and they want to give tax cuts to taxpayers.

Here is the real deal… Debt is bad for the economy and tax cuts are good. We know this because a lot of very serious people in ties keep saying it on the teevee machine. Never mind that these two positions are somewhat contradictory -- tax cuts make it difficult to reduce debt -- that's just the way things are. If we give tax cuts to the "job creators," we're told they'll go all crazy with the job creating and everything will be perfect forever.

My mathematics teacher long ago told me that any problem can be solved using basic mathematics and this ‘tax cut’ thing is a prime example. President George W. Bush 43's tax cut is a prime example of what tax cuts can do to an economy. Remember that the Bush tax cut was across the board and designed to eventually be a permanent fixture; meaning that everyone got the same percentage tax cut and would get it forever. A person making two hundred thousand dollars naturally would receive a larger tax cut than a person making fifty thousand dollars.

The Middle-Class of the United States has traditional paid the majority of the taxes received by the IRS (Internal Revenue Service). The average person that received Bush’s tax cuts got six hundred dollars. Consider that the average person during the Bush Administration was making fifty thousand dollars and now you know why tax cuts are of no value to the majority of taxpayers – the Upper-Class and Big Business were greatly rewarded by the Bush Administration. What really happened is that we lost the main group that pays taxes, the Middle-Class, and now the only people receiving tax cuts are the rich and Big Business. That the Middle-Class is almost non-existent is evident.

The Oil Industry under that Bush administration got tax breakers that led to astronomical profits for the giants within the Oil Industry. The records show that the Oil Industry benefited greatly from Republican influence. Big Business was predicted to ‘flame-on’ and the United States’ economy is going to chug along at an easy clip… not.

Tax cuts are never the end-all answer to the problems within the American economy – they never have and never will. The IRS sees any tax cut as a cut in pay. The IRS sees a tax cut as a less money to pay the country’s bills. Keeping that in mind, there is never an instance where a prolonged tax cut will benefit the country as a whole. Tax cuts increase the national debt, put money in the coffers of those who may or may not invest that tax cut and in general are of no lasting value. On the other hand, targeted tax cuts of a short duration do make a difference.

The Bush Administration has stood in favor of tax cuts through thick and thin. In the midst of a booming economy and large projected budget surpluses, President Bush’s top economic policy initiative — both as a candidate in 2000 and upon taking office — was to cut taxes. When the economy slowed, the Bush Administration’s response also was dominated by tax cuts. Now, in the face of yawning deficits and its own pledge to reduce them, the Administration has again put forward large, permanent tax cuts as part of its most recent budget.

In summary, balanced tax cuts that target a particular element of the economy for a short duration appears to be the best route to take when attempting to stimulate the economy without creating a nightmare for the entities that have to pay the bills on the Federal, State, and Municipal levels.

In a democracy, silence is not golden; it is condonance in the face of injustices; it is fear, where the thought of reprisal fosters control – Rodney A. Davis

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