Tags: obama | taxes | economy

Ending Bush Tax Cuts Would Be Economic Suicide

By    |   Thursday, 09 Sep 2010 08:12 AM

 
When Barack Obama ran for office, one of his main platforms was to reverse the “Bush tax cuts for the wealthy.”
 
He pledged to increase taxes on individuals making more than $200,000 and couples making more than $250,000, while keeping the tax cuts in place for people making below those thresholds. Now it is beginning to look like there is a good chance the tax cuts will remain in place at least for the next year.
 
This is good news for the economy.
 
The Bush tax cuts should be extended indefinitely for several solid reasons.
 

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 The 3 percent of small businesses making more than $250,000 a year employ about 25 percent of the U.S. workforce. Uncertainty drives down investments. Wealthy people do not invest and free enterprise (jobs) does not grow in countries that penalize these activities. To jump-start the economy, reduce taxation, and encourage free enterprise and job creation is absolutely mandatory.
 
Politicians are lying (using political speak) when they claim single taxpayers making less than $200,000 and married couples making less than $250,000 will not pay more in taxes. The 10 percent tax bracket will disappear; the lowest tax bracket is 15 percent, which applies to incomes up to $34,549. Increases continue throughout the rest of the tax brackets. The child tax credit will be reduced and the marriage penalty will come back.
 
CBS News chief White House correspondent Chip Reid states 75 percent of small-businesses owners file their income taxes on their personal taxes. If the business makes $400,000, the expiration of the tax cuts will generate an additional $12,000 in taxes. The rich receive 40 percent of non-corporate business income, 60 percent dividend income, and 80 percent of the capital gains. These are the people most familiar with the 40,000-page IRS tax code and use it to protect their income or move the income-generating machinery to a different arena. These people will not pay the amount of taxes optimistic number crunchers are hoping for.
 
The stimulus checks released in the 1970s, 2001, and the latest round have been a bust, according to William Beach, director of the Center for Data Analysts at The Heritage Foundation. Consumers used only about 30 percent of these funds to purchase commodities. Mr. Beach also says rising uncertainty drives down investments.
 
A total of 60 percent of the economists surveyed by the National Association for Business Economies (NABE) agreed these tax cuts need to be extended to bring the United States out of this recession/depression.  
 
Continuing the Bush tax cuts benefits taxpayers in all tax brackets.
 
When the economy recovers, there will be a need for tax increases and even greater spending cuts to balance the budget. However, in the middle of a huge recession it would be economic suicide to have the largest tax increase in history.

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Wolinsky
When Barack Obama ran for office, one of his main platforms was to reverse the Bush tax cuts for the wealthy. He pledged to increase taxes on individuals making more than $200,000 and couples making more than $250,000, while keeping the tax cuts in place for people...
obama,taxes,economy
482
2010-12-09
Thursday, 09 Sep 2010 08:12 AM
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