Taxes Destroying Middle Class
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Taxes Destroying Middle Class
| Mon, 10-11-2004 - 2:09pm |
Currently over 50% of everything my husband and I earn is paid in taxes: federal and state income, social security, property, gasoline, and sales taxes. John Kerry cannot keep all the promises he has made without raising taxes. The Democrats are determined to "kill the goose that laid the golden egg" - if Kerry wins, they will succeed! John Edwards complains about two America's, but he advocates for government that will result in two America's: the very rich like the Kerrys/Edwards/Kennedys/Hollywood movie stars who have made their fortunes and use tax loopholes to avoid taxes - and the rest of us who will be forced to depend on government programs because we do not have enough money after taxes to save for our own retirment and health plans.

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Renee ~~~
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So glad you asked.
WASHINGTON (AFP) - Edward Prescott, who picked up the Nobel Prize for Economics, said President George W. Bush's tax rate cuts were "pretty small" and should have been bigger.
Renee ~~~
The same way the larger deficit was taken care of in the 80s. Remember that? You were, no doubt, one of the one's claiming that you're grandchildren would be eating cat food because of that deficit which was retired because of the expanding economy in the 90s. That's the same reason this deficit is projected to be cut in half
Renee ~~~
The same way the larger deficit was taken care of in the 80s. Remember that?
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The debt from the 1980's still isn't paid off yet.
The INTEREST from the Debt still isn't paid off yet.
Knowing that, how was it 'taken care of' exactly?
First, remember after 911, and how everyone wanted to donate something, and Elizabeth Dole came on TV and said, "Nothing moves faster than blood and money." She was trying to get people to give money and blood, rather than some sort of "yard sale" things.
Well money moves, alright. It move across borders, and across countries. And nothing the Bush tax plan, now or in the past, does anything to guarentee that the money from the tax cuts stay in America. Corporations have incentives not to invest in America. And many of them don't.
Tax cuts for the middle class do have some effect, because the middle class spends most of its income. But for the upper class? Well, investments should make money, and being a patriot has nothing to do with making money. So if the overseas investments can make more money and can be structured to stay offshore so there is no American taxes to pay, well, so be it.
Second, taxes and wages are both on the same side of the ledger. They are expenses. And the theory that if you lower taxes, and expense, you will automatically raise the amount paid for wages is just a theory and a not very good one. Wages are an expense and businesses have every incentive to cut expenses, no matter what they are. So just cutting taxes to increase wages is sort of a "Santa Claus" vision of the economy. Mr. Generous Employer, having had his taxes cut, will automatically hire more people, because that's the way it works. Well, no, it doesn't.
Third, the money supply, as manipulated by the Great God Greenspan, may his name be blessed, has far more to do with the economy than any tax cut. Look at the last four years. The only real bright spots in the economy have been housing, real estate, and related fields. That's because people buy thing like that based not on how much they cost, but how much they pay a month. But when the cost of money, in interest rates, goes up, the price people will pay for homes and permanent structures go down, because the payment, to stay the same, must cover a higher cost of money, and, hence, a lower purchase price.
Forth, money, as I've already pointed out, seeks to duplicate itself as quickly as possible, as safely as possible. So when money sees government bonds, needed to float the defiacet of the Bush years, compete for money pile with other investments, it floats to the government bonds. When the other investments go up higher, to entice money to come back in the government bond market, interest rates go higher on the government money.
So here's the real outcome of the Bush "cut and spend" period. Money moves out of the U.S. to seek a higher return, interest rates on the money at home go up, prices on big ticket items purchased during the boom times go down, housing prices fall, consumers are left with huge debts that can't be paid, because no new consumer, called, by some "the next greater fool" won't buy, paper capital is destroyed, inflation runs out of control, and we are all broke.
Give a tax break to the lower and middle class, who will actually spend it. Not to the upper class, who will move it out of the country. It's pretty basic stuff, unless you are running for president, and want campaign contributions from corporations, and the rich, who run and own them.
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