Tuesday, July 24, 2012

Cutting taxes may help the recession, but is not the economic answer

And of course, cutting taxes is never the question in Pacifica, the county or the state.  

The Washington Post/Fareed Zakaria, opinion writer, 6/7/12.  "Romney is wrong on tax cuts."

How about a smarter use of taxes?
"....  And the nonpartisan Congressional Research Service concluded in 2010 that “by almost any economic indicator, the economy performed better in the period before the [Bush] tax cuts than after the tax cuts were enacted. . . . GDP growth, median real household income growth, weekly hours worked, the employment-population ratio, personal savings, and business investment growth were all lower in the period after the tax cuts were enacted.” The years 2000 to 2007 were the period of the weakest job growth in the United States since the Great Depression.

....  When pressed, Romney and his advisers sometimes say that they are just for tax reform; other times, they cite the Simpson-Bowles plan. I’ve long argued that reforming the nation’s bloated and corrupt tax code is vital and that Simpson-Bowles is a superb framework for deficit reduction. But neither will cut taxes. Simpson-Bowles raises them by more than a trillion dollars. You can use euphemisms such as “ending tax expenditures” and “closing loopholes,” but when you do that, someone’s taxes will go up. And when you close big loopholes such as the deduction of mortgage interest — which is the only way to get real revenue — tens of millions of peoples’ taxes will go up.

Fair taxes for the most wealthy
.... Tax cuts have been a central cause of America’s deficit problems. For four decades, Washington politicians have bought popularity by cutting taxes, always saying that spending cuts or growth will make up for lost revenue. That rarely happened, and the result is $11 trillion in federal debt held by the public. To perpetuate this pandering one more time is not just dishonest — it is dangerous."  Read Article.

Related -  The Washington Post/Fareed Zakaria, 7/18/12, "What voters are really choosing in November." "...the great shift in the U.S. economy over the past 30 years has not been an increase in taxes and regulations but, rather, a decline in investment in human and physical capital..."

Posted by Kathy Meeh

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