Time to Extend the Bush Tax Cuts
May 1, 2006
It’s past time for President Bush to make a strong push to extend his income tax rate reductions before they expire in a few short years. The tax cuts have been instrumental in stimulating economic growth, and their extension is absolutely essential to meet the onerous challenges we’ll be facing, including the ongoing war on terror and rising fuel prices.
The president’s newly appointed chief of staff, Josh Bolten, appearing on “Fox News Sunday,” made encouraging statements about the president’s plan to reenergize his domestic agenda, including extending the tax cuts.
But Democrats have a vested interest in blocking the extension and seeing to it that the confiscatory, government-empowering rates enacted in the Clinton years are restored. Democrats are using three principal — and familiar — arguments against extending the cuts, all of which are fallacious and deceptive. All are rooted in destructive class warfare.
First, they say that our deficits have skyrocketed under President Bush (which is true) because of his tax cuts (which is patently false). They say that this was entirely foreseeable because Reagan’s tax cuts produced similar — though not as severe — drains on the national treasury, which is also empirically false.
As Mark W. Smith points out in the newly released paperback version of his “Vast Right-Wing Conspiracy Handbook,” “President Bush’s tax cuts produced a 14.6 percent increase in federal revenues in 2005 over those in 2004.” The Reagan tax cuts nearly doubled revenues in the Eighties, and even after accounting for inflation, produced major revenue increases. In both cases (Reagan and Bush), the strain on the national debt has resulted from excessive spending, not the tax cuts. But lies to the contrary never cease.
Second, Democrats say that the Reagan and Bush tax cuts aided the rich at the expense of the poor, which, in both cases, is outrageously and maliciously false. Refreshingly, Josh Bolten signaled an awareness of the Democrats’ propaganda schemes when he made a point of contradicting their oft-repeated lie that Bush’s tax cuts disproportionately benefit the wealthy.
Bolton plainly made a point I and many others have made for years: The Bush tax cuts made the tax code more progressive. The lower income groups received a greater percentage tax rate reduction than higher income groups.
According to Bolten, the top 10 percent of income earners would be paying about 64 percent of the federal revenues if the Bush tax cuts were not in place. But since they are, they are paying 66 percent of the revenues.
Democrats can play semantic games all they want by saying the rich get more actual dollars back with the tax cuts, but that’s shamelessly misleading. In the first place, they don’t get any money “back,” because tax cuts just mean they pay a lower percentage of their earnings to the government. It is their money, and the amount they save on the “cuts” is money they will never pay in, not money they will actually get back.
Of course the amount of money the upper income groups are spared from paying in due to the cuts is much greater, in actual dollars, than the amount spared lower income groups because the higher income earners are paying so much more in actual (and percentage) dollars.
Only the fraudulent or willfully ignorant can claim the tax code or the Bush cuts disproportionately benefit the wealthy when the top 10 percent pay two-thirds of the revenues and the bottom half of earners pay very little at all. Indeed, how could lower income groups save much money from tax cuts when they pay so little in, if any, in the first place?
Third, Democrats say the economy has been sluggish under President Bush. This, also, is false. The best-kept secret of the current age is that the Bush economy is and has been very strong, with current growth rates of 4.8 percent — notwithstanding the enormous shocks on the economy the last five-and-half years, another point Bolton emphasized.
Democrats are famous for accusing President Bush of dividing, not uniting, the nation. But the truth is that the Democrats are the ones always pitting people against each other based on racial, gender and economic differences.
The American dream and America’s remarkable success have not been based on suspiciousness, envy and covetousness between groups, but the ideal that everyone should have an opportunity to succeed and that one’s success does not mean another’s failure.
It appears President Bush will persist in ignoring the class warriors and press forward with his plan to extend his tax cuts. If so, I trust, he’ll be aided enormously by press secretary Tony Snow in making his case.