The Tax Cut Myth

JeffWartman

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This is one of the best opinion pieces I've ever read...it exposes the fake Conservatives (Republicans) for what they are. Republicans are big government. We need small government.

The Tax-Cut Myth
By John Stossel

The federal government keeps growing, as I pointed out last week, but the Bush administration has cut tax rates a few times since 2001. How can that be? The answer is simple: deficit spending.

Some Republicans argue that deficits don't matter; that if you cut taxes, everything else takes care of itself. But that's a myth. Yes, the tax cuts stimulated the economy and increased tax revenues. It happens because, as the Laffer Curve illustrates , lower rates mean higher rewards for productive activities. People undertake investments and work that higher tax rates had discouraged. They are also less likely to invest time and energy in using accountants and tax lawyers to find ways to avoid taxes.

That's all good, but there's a downside to cutting tax rates without cutting spending. Deficit spending disguises the real burden of government. As a result, we get more than we'd want -- and that's not good. Government makes up the deficit either by borrowing, which removes productive resources from private hands and must be repaid by future taxes, or by creating money out of thin air -- inflation -- which steals purchasing power from us by devaluing our money.

In other words, tax cuts without spending cuts are an illusion. The burden of government has not really been lightened. As the late Milton Friedman constantly pointed out, that burden is better measured by the level of spending, not the level of taxes. Shame on the Bush administration for trying to pull a fast one on the American public.

President Bush brags that the deficit is coming down -- and it is. It's expected to be "only" $244 billion by the time the current fiscal year ends. And the Office of Management and Budget projects a surplus in 2012. But that's largely because your FICA taxes currently exceed Social Security and Medicare payments. That will change in 2017 and 2019, respectively, when the baby-boomers retire en masse. After that, the Social Security and Medicare budgets begin to go south. Sharply. Avoiding devastating deficits then will take a Houdini.

Let's give President Bush some credit for the falling deficit. Because of his tax cuts, tax revenue -- our hard-earned money -- is pouring into the government's coffers, Government spending is keeping ahead of that torrent, but at an ever-slower rate. Hence the shrinking deficit. But this is not necessarily a good thing.

Bush boasted last year, "This economy is growing, federal taxes are rising, and we're cutting the federal deficit faster than we expected. Some in Washington say we had to choose between cutting taxes and cutting the deficit. Today's numbers show that that was a false choice. The economic growth fueled by tax relief has helped send our tax revenues soaring."

But I don't want tax revenues to soar. That's money you and I could be spending for things we want. I want revenue and spending and government overall to shrink. So I'm not celebrating with the president. The deficit is shrinking because the government takes more and more out of the productive private sector each year.

If revenues are pouring in, why don't the politicians return it to the taxpayers instead of spending it? Because politicians love to spend money. They get reelected not by how much they save but by how much they shower on interest groups.

This was foreseen by anti-federalist writer Melancton Smith in 1787: "[A]ll governments find a use for as much money as they can raise."

Things haven't changed much in 220 years.

COPYRIGHT 2007 BY JFS PRODUCTIONS, INC.
http://www.realclearpolitics.com/articles/2007/05/the_taxcut_myth.html
 

red states rule

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Oh yea, tax cuts do not work

record tax revenues flowing into Washington

eight straight weeks of gains on Wall Street - and anopther record close this past Friday

Unemployment at 4.5%

Inflation in check

Low interest rates

Moderate economic growth

IF this is what it means by tax cuts do not work - GIVE ME MORE!!!!!!!!!!!!!
 

red states rule

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More Jobs = More Revenue =Tax Cuts Work
April 13, 2007 01:00 PM EST



On April 7th I read a wonderful report by Patrice Hill of the Washington Times entitled: “Jobless rate falls to a five-year low” which was chock full of numbers and optimism for the national economic outlook. I would be interested to know if the number of ambulance calls for coronary distress among liberal democrats reached double-digits that day.

Anyway, Ms. Hill’s report began: “The unemployment rate fell to a five-year low of 4.4 percent as job growth picked up to 180,000 last month — a show of strength that bolstered hopes that the economy will endure the turmoil in the housing and mortgage markets without major harm.”

Please note the terminology “a show of strength”.

Again from the report: “In another sign of unexpected strength, hiring in January and February was 32,000 more than previously reported.”

So as in many of the previous jobs reports the numbers have actually been understated. The “unexpected strength” in national employment continues to baffle the liberals who still manage to find tarnish on economic silver linings. Even this glowing report from Ms. Hill managed to dent the good news with the following: “But the overall employment gains in March masked the loss of another 16,000 manufacturing jobs — the ninth straight month of shed factory jobs — as well as a rare cut in business services jobs for accountants and temporary employees.”

Ah! There is always the “but”, but this “but” has a “but” as well. The “loss” of all these manufacturing jobs still did not impact the unemployment rate. The unemployment rate continued to fall despite the loss of 16,000 manufacturing jobs. That means more people were employed and more tax revenue was being gained through the increased payrolls.

It was only three or so weeks ago that forecasters were predicting dire consequences for the American economy because of mortgage failures and a possible “…recession from the sub prime mortgage problem and the housing slowdown…” but here is another “but” from the article: "The latest job numbers show an economy that is effectively absorbing the blows from the residential and mortgage sectors," said Bernard Baumohl, managing director of the Economic Outlook Group, an economic advisory firm in Princeton Junction, N.J.”

We are talking of job growth that has extended over a five year period since the Bush tax cuts first began having the desired effect on the national economy. Again from the report: “Job growth averaged a "respectable" 152,000 a month in the first quarter, which is down from last year's 188,500 pace but consistent with the more subdued growth of the economy, [Baumohl] said.”

Not only are job being created at a “consistent” pace but according to the report: “Wages continued to grow moderately, bringing the yearly gain for average hourly workers to 4 percent. Both the wage gains and the unemployment rate are at levels attained at the end of the last expansion in 2001…” meaning there is growth in just about every sector of the economy and that while fewer higher wage jobs may be produced, the larger increase in lower wage jobs more than offsets that situation and the lower wage jobs still saw “moderate” wage gains. Tax revenue is still increasing and deficits are slowly being adjusted down from the increases in tax revenue.

Another optimistic quote from the report: “The economic outlook is quite bright, and the probability of recession is still negligible" as long as consumers continue to gain jobs and income, Mr. Baumohl said.”

Liberal economic naysayer’s got another dose of reality against their gloom and doom prognostications. From the report: “David Wyss, chief economist with Standard & Poor's, said the strength in construction and other areas was a "major surprise" and indicates that the slowdown in hiring during January and February was more of an aberration because of cold weather than previously thought. "The strength in construction, in particular, is highly encouraging" in light of an 18 percent drop in home building and a loss of 134,000 home construction jobs in the last year, he said.” (There’s that word “strength” again!)

Patrice Hill’s report cites: “Lawrence Kudlow of Kudlow & Co. [who] called the jobs report a "blockbuster" that "puts the lie to those perma-bear pessimists who keep predicting recession from the sub prime mortgage problem and the housing slowdown. The rate of economic growth ebbs and flows over long expansion periods such as this one," which is in its sixth year of growth, he said. "In the absence of major policy blunders" like big tax increases, the unleashing of inflation and protectionist forces or overregulation, "the economic pie keeps expanding,"

And after all the talk from democrats who believe increasing taxes is the path to prosperity the word “blunder” is a stark contradiction just waiting for a democrat administration. A sharp picture of the Carter Presidency comes to memory!

Finally from Ms. Hill’s report: “Peter Morici, business professor at the University of Maryland, said the job boomlet has been better for college-educated and skilled people than for high school graduates and dropouts, though all groups have seen their unemployment rates drop in the past year.”

The point being that there are jobs for everyone who wants to work. The economy is in continued growth. Jobs are being created every month. Some months have fewer jobs created than others but still there is growth. Wages are increasing, perhaps slowly, but increasing nonetheless. More jobs mean more tax revenue without having to increase tax rates and if tax cuts remain a permanent fixture in the American economy the possibility of continued economic growth remains.

http://www.theconservativevoice.com/article/24240.html
 

red states rule

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Umm, did you read the article? It states clearly that tax cuts bring in revenue. Please read and understand the article before you respond.
and tax cuts cause economic growth and more then pay for themselfs
 

red states rule

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WASHINGTON - The federal deficit fell to a four-year low in the budget year that just ended, a result President George W. Bush pointed to Wednesday in claiming Republicans are better stewards of the economy than are Democrats.

The administration said the deficit dropped to $247.7 billion — welcome news for Republicans struggling to keep control of Congress. Bush boasted he had made good on a 2004 campaign promise to cut the deficit in half over five years.

“These budget numbers are proof that pro-growth economic policies work,” Bush said.

http://www.msnbc.msn.com/id/15220076/
 
OP
JeffWartman

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WASHINGTON - The federal deficit fell to a four-year low in the budget year that just ended, a result President George W. Bush pointed to Wednesday in claiming Republicans are better stewards of the economy than are Democrats.

The administration said the deficit dropped to $247.7 billion — welcome news for Republicans struggling to keep control of Congress. Bush boasted he had made good on a 2004 campaign promise to cut the deficit in half over five years.

“These budget numbers are proof that pro-growth economic policies work,” Bush said.

http://www.msnbc.msn.com/id/15220076/
THE ARTICLE AGREES. CAN YOU ADDRESS THE REAL POINTS OF THE ARTICLE?
 

Gunny

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Oh yea, tax cuts do not work

record tax revenues flowing into Washington

eight straight weeks of gains on Wall Street - and anopther record close this past Friday

Unemployment at 4.5%

Inflation in check

Low interest rates

Moderate economic growth

IF this is what it means by tax cuts do not work - GIVE ME MORE!!!!!!!!!!!!!
What do YOU get out of the "tax cut" RSR?

I got a one time gift on which I had to pay taxes at the end of the year.:cuckoo:
 

red states rule

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What do YOU get out of the "tax cut" RSR?

I got a one time gift on which I had to pay taxes at the end of the year.:cuckoo:
I did get a tax cut

If you pay taxes - you got a tax cut

The lowest bracket went from 15% to 10%

The top bracket, I believes went down about 3% points

Guess what - Dems want it all back

They passed a $400 bilion tax increase - so if you paid taxes before - you will pay alot more if their increase becomes law
 

Care4all

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I did get a tax cut

If you pay taxes - you got a tax cut

The lowest bracket went from 15% to 10%

The top bracket, I believes went down about 3% points

Guess what - Dems want it all back

They passed a $400 bilion tax increase - so if you paid taxes before - you will pay alot more if their increase becomes law

The 15% tax bracket, which is where the MAJORITY of Americans fall, for a married couple with no children making 45k, got the first 12k of their earnings reduced to a 10% tax..... $600 bucks.

The 15% tax bracket is the ONLY tax bracket that DID NOT get a TAX REDUCTION/BREAK for their full earnings bracket range....

The 15% tax bracket, I repeat, is where the majority of Americans lie.


Link please on democrats PASSING a $400 billion tax increase

And good morning to all
 

red states rule

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If Congress passed the largest tax increase in American history you would think it would make the news, right?
Well, I guess not.

The House passed a 400 Billion dollar tax increase today which will hit the middle class and small businesses like my self HARD. According to press release sent out by Minority Whip Roy Blunt (my congressman) the break down goes something like this:

26 million small business owners, by an average of $3,960.
48 million married couples, by an average of $2,899.
42 million families with children, by an average of $2,181.
12 million single women with children, by an average of $1,082.
17 million senior citizens, by an average of $2,270.
Thats serious stuff folks. If you are married and have kids, then by my calculations you should expect to pay $5,000.00 more in taxes. If you run a small business, like I do, expect to pay $9,000.00 more in taxes. I dont mind telling you that it hurts, and hurts bad.

Remember folks there is a very good reason why the media refused to ask hard questions of Democrats in the 2006 election cycle pertaining to taxes and the what ifs regarding Iraq. It is because their answers would be damning to their election and Republicans would have held the House of Representatives.

Ask your self how many Americans would vote for a $400 billion increase in taxes? Not many, that is for sure.

What is worse is the lack of coverage today regarding this vote, which only solidifies the Democrat’s ability to pass legislation which is harmful to our country without any repercussion. Currently most internet news sites post stories regarding the passage of the unconstitutional deadlines being set by the Senate and House of Representatives and news over the witch hunt with Alberto Gonzales.

Oddly enough, there is not a word being spoke about the single piece of legislation which will impact Americans in every day life. Not one single shred of information is being reported on this $400 billion dollar tax increase or the impact it will have on the economy or lives it will effect.

I am not under the illusion that we will see much of any thing significant about the tax increase because a) Democrats passed the legislation b) it supports socialism ala carte. That may change if Bush elects to veto the budget, then I would expect to see a series of sob stories regarding programs which need the money, not about those who might be impacted in a negative way by tax increases.

Remember folks, most of these people’s goals is to play the role of Karl Marx and redistribute wealth to enact “social justice.” If you end up losing your house, car, job or anything else that is just too bad. You can always apply for federal aid and become more reliant upon government like a good person should.

In any case, may I remind everyone yet again that elections mean something.


Posted by Paul Seale on Thursday, March 29th, 2007 at 2:34 pm. Filed under National Politics.
http://www.arenaofideas.org/?p=557
 

Care4all

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read this.....rsr, looks like your Rep was lying? :)

-1-
OVERVIEW
FY 2008 BUDGET
CONFERENCE AGREEMENT
May 16, 2007
A Fiscally Responsible Budget Plan
Provides New Direction for Country – The new Democratic Majority pledged that we would work together
to restore our economic health, reclaim our leadership position in the world, advance our national security,
and invest in the future. The FY 2008 Budget Conference Agreement takes important steps toward meeting
those goals. The Conference Agreement:
• returns the budget to balance – reaching a surplus of $41 billion in 2012 – without raising taxes;
• provides for middle-class tax relief;
• allocates funding for national priorities like children’s health care, education, and veterans’ medical
care;
• begins to reverse six years of fiscal mismanagement and harmful cuts in key areas; and
• sets us on a course to build the future we want for our children and grandchildren.
Begins to Clean Up Fiscal Mess We Inherited – Unfortunately, the nation’s budget outlook deteriorated
dramatically over the last six years under Republican policies. When President Bush took office in 2001, we
enjoyed a record $5.6 trillion ten-year projected surplus. That surplus has been squandered. Gross debt has
exploded – rising from $5.8 trillion in 2001 to an estimated $9 trillion by the end of this year. This debt is
accumulating at the worst possible time, just before the retirement of the baby boom generation. And most
of this debt has been purchased by foreign investors, making the U.S. more vulnerable to economic and
political pressure from abroad.
The President’s budget would continue the fiscal approach that has brought
these large deficits and growing debt. In contrast, the Conference Agreement will put the nation back on a
sound fiscal path.
Restores Fiscal Responsibility – In addition to bringing the budget back into balance by 2012, under the
Conference Agreement, gross debt as a share of GDP will begin to fall after 2010. Spending as a share of
GDP will decline in every year after 2008. The plan also directs all committees to review their programs to
promote efficiency and eliminate unnecessary spending.
The Conference Agreement also includes crucial budget enforcement provisions. Most notably, as a
complement to the strong paygo, or pay-as-you-go, rule adopted earlier this year in the House, the plan
restores a strong paygo rule in the Senate. The paygo rule in the Senate requires that new mandatory
spending or new tax cuts be offset, or get 60 votes. Reinstating a strong paygo rule represents a crucial step
in restoring fiscal discipline.
The Conference Agreement includes no new mandatory spending that is not offset. Unlike the Republican
Congress that racked up over $260 billion in deficit-financed mandatory spending programs over the past six
years, the Conference Agreement adheres to the principle that all new mandatory spending must be paid for.

-2-
The plan also allows reconciliation to be used for deficit reduction only. Since 2001, the Republicancontrolled
Congress has abused reconciliation by using the procedure to pass tax cuts that have increased the
deficit by more than $1.7 trillion.
Defends Our Nation – The Conference Agreement provides robust funding for national defense and ensures
that resources are available to address the most critical threats facing our nation. It provides more homeland
security funding than the Bush administration. And it provides funding for the 9/11 Commission
recommendations.
A Balanced Budget Must Be Accompanied by Balanced Priorities – The Conference Agreement rejects
the President’s proposals to again cut critical domestic priorities. It provides needed resources in key areas
such as:
Kids’ Health - SCHIP
The Conference Agreement rejects the inadequate funding level proposed by the President for
children’s health care and instead provides up to $50 billion for expanding coverage and improving
children’s health through the State Children’s Health Insurance Program (SCHIP). There are an
estimated six million children eligible but not enrolled in either SCHIP or Medicaid. These
additional SCHIP funds will expand coverage to uninsured children and ensure states can maintain
current caseloads.
Education
The Conference Agreement rejects the President's proposed cuts in education and training and adds
significant new resources that could be used for the Individuals with Disabilities Education Act
(IDEA), No Child Left Behind Act, and Pell grants. For 2008 alone, it provides an increase in
discretionary funding for the education and training function of $9.5 billion (including $2 billion in
additional 2009 advance appropriations) above the President's request.
Veterans
The Conference Agreement provides critical resources to ensure that our nation's veterans get the
high quality health care they deserve. The Conference Agreement provides $43.1 billion for
discretionary veterans’ programs, including medical care, and is consistent with The Independent
Budget, a plan developed by four leading veterans groups, and the recommendation of the American
Legion. This funding level is $3.6 billion more than the President in 2008 and more than $30 billion
above the President over five years. For veterans’ medical care, it represents the largest increase
ever provided.
Protects Middle-Class Taxpayers – The Conference Agreement balances the budget without a tax increase.
Middle-Class Tax Cuts
The Conference Agreement supports middle-class tax relief, including extending marriage penalty
relief, the child tax credit, and the 10 percent bracket subject to the pay-as-you-go rule. It also
supports reform of the estate tax to protect small businesses and family farms. House provisions
include additional procedural protections to help ensure fiscal responsibility.
AMT Relief
The Conference Agreement prevents the spread of the Alternative Minimum Tax (AMT), so that it
does not impose higher taxes on middle-class families. It ensures that the number of taxpayers
subject to the AMT will not be allowed to increase in 2007 – protecting some 20 million middleclass
taxpayers from being subject to the tax.


-3-
No Tax Increase
Over the five years of the Conference Agreement, revenues total $14.828 trillion, which is virtually
identical to the President’s level of $14.826 trillion, as estimated by his own administration. And
revenues are only 2.1 percent above the President’s level, as estimated by the Congressional Budget
Office. The modest additional revenues in the plan can be achieved by closing the tax gap, shutting
down abusive tax shelters, addressing offshore tax havens, and without raising taxes.
Closing the tax gap is not about raising taxes on anyone. It is simply collecting taxes that are already
due under current law. While we will never be able to close the tax gap entirely, it is clear that much
more can and should be done. To help close the tax gap, the Conference Agreement supports steps
to increase reporting and withholding requirements. It also fully funds the President’s budget
request for the IRS, including additional resources available through a discretionary cap adjustment
that directs $406 million to IRS enforcement activities.
Addresses Long-Term Fiscal Challenges – With the coming retirement of the baby boom generation, our
nation faces a significant long-term imbalance between revenues and spending. While the Conference
Agreement returns the budget to balance by 2012, this represents only a first step in the difficult path of
restoring our long-term economic security. The Conference Agreement recognizes that a comprehensive
effort, focused on the long-term fiscal imbalance, must be undertaken on a bipartisan basis. However, the
plan does include a number of measures to begin preparing for our long-term fiscal challenges.
Program Integrity Initiatives
The Conference Agreement institutes tough program integrity initiatives to crack down on wasteful
or fraudulent spending in the Social Security, Medicare, and Unemployment Insurance programs.
Specifically, it provides in Function 920 for discretionary cap adjustments for program integrity
initiatives in these areas, including $200 million more than the President’s budget in 2008 to go after
Medicare fraud – for a total of $383 million.
Health IT Reserve Fund
The Conference Agreement also includes a deficit-neutral Health IT reserve fund designed to
promote the use of advanced information technology to improve the quality and efficiency of health
care.
Comparative Effectiveness Reserve Fund
The Conference Agreement also includes a deficit-neutral reserve fund to jumpstart an initiative on
comparative effectiveness research. The purpose of such research would be to evaluate medical
technologies, devices, procedures, and pharmaceuticals for both effectiveness and value. This
information could lead to savings over the long-term by allowing providers to avoid treatments that
may be clinically ineffective and overly expensive, while at the same time improving health care
outcomes.
Long-Term Deficit Point of Order
The Conference Agreement also creates a Senate point of order against legislation that increases the
deficit over the long term – specifically in the four decades beyond the next ten years (2018-2027,
2028-2037, 2038-2047, and 2048-2057). The long-term point of order will apply against any net
deficit increases in excess of $5 billion (including changes in revenues and mandatory spending, but
excluding debt service) in any of the four ten-year periods.
Importance of Adopting Budget Resolution – Given that the federal government has operated without a
budget resolution in three of the last five years, it is even more important that Congress adopt a budget
resolution this year. The FY2008 Budget Conference Agreement provides a crucial blueprint to guide the
nation’s fiscal course. While no single resolution can solve all of our budget challenges, this budget
resolution represents an excellent effort to put the nation back on a sound fiscal path. The conferees strongly
endorse its adoption.
 

Truthmatters

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I really wish we were not in such an insane little time warp.

Tax Cut is like magic words to a good portion of Americans.

In the meantime we are selling our road and bridges to foreign entities so they can Charge us to use them.

Our infrastructure is crumbling.

Our kids are not getting the education we will need them to have to keep our economy strong.

Yet we have the highest percent of our population in prison.

I really wish we would pay for the things this country needs to stay strong and quit throwing good money after bad on things that help only a few.
 

red states rule

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read this.....rsr, looks like your Rep was lying? :)
Care, the Dems lied - nothing new


Democrats on Thursday quietly passed a budget creating the framework for the largest tax increases in American
Democrats on Thursday quietly passed a budget creating the framework for the largest tax increases in American history.

Until Thursday, the largest tax increase had been in 1993. That’s when Bill Clinton proposed a monstrous budget that even he would later admit had contained too many tax hikes. The Democrats lost the House of Representatives the following year for the first time in half a century. Clinton, speaking at a Texas fundraiser soon after Election Day, pinned the blame squarely on the hikes: “It might surprise you,” he said, “to know that I think I raised them too much too.”

Despite what happened to Democrats as a result of that tax hike, the budget they submitted their first year back in control of both houses of Congress — and pushed through Thursday on a party-line vote — provides a framework for tax hikes a full three times larger than the one that put them in the minority back then. This budget reverses more than a decade of Republican tax relief. It means a tax hike on every single American — working, retired, rich or poor — and, even as it aims to raise nearly $1 trillion with new taxes, does absolutely nothing to rein in spending or shore up an entitlement system badly in need of reform.

Everyone takes a hit. Forty-five million working families with two children will see their taxes increase by nearly $3,000 annually. They’d see the current child tax credit cut in half — from $1,000 to $500. The standard deduction for married couples is also cut in half, from the current $3,400 to $1,700. The overall effect on married couples with children is obvious: Far from shifting the burden onto the wealthy, the Democratic budget drives up taxes on the average American family by more than 130 percent.

Seniors get hit hard too. Democrats like to crow that only the richest one percent of Americans benefit from the stimulative tax cuts Republicans passed in 2001 and 2003. What they rarely mention is how much seniors benefited from those cuts in the form of increased income as a result of lower taxes on dividends and capital gains. More than half of all seniors today claim income from these two sources, and the Democratic budget would lower the income of every one of them by reversing every one of those cuts.

The great untold story of the post 9/11 period is the recovery of America’s will to fight on, despite new threats, and build an even stronger economy, a stronger America than before we were hit. A Republican Congress gave the American people the tools they needed to help themselves — and then got out of the way. We eliminated the marriage penalty and doubled the child tax credit. We created a tuition tax credit and put the death tax on the road to extinction. We slashed the tax on capital gains and dividends.

Americans took care of the rest, unleashing a flood of economic activity that’s still lifting the tide for tens of millions of working families and retirees. Despite 9/11, despite a recession, despite Katrina, despite a war, the American economy soared. China may be one of the world’s fastest growing economies. But its entire Gross Domestic Product is less than our net economic growth in the five and a half years since 9/11 alone.

The Democrats sounded a thrifty tune in the run-up to the November elections. They know about the tax-and-spend stereotype, so many insisted things would be different this time around. But budget season is always the most telling time of year on Capitol Hill. And as Democrats on Thursday advanced the largest tax hike in history, the story they’re telling is this: The party of tax and spend is back, with a vengeance
http://answers.yahoo.com/question/index?qid=20070518162933AAK5P1j
 

red states rule

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I really wish we were not in such an insane little time warp.

Tax Cut is like magic words to a good portion of Americans.

In the meantime we are selling our road and bridges to foreign entities so they can Charge us to use them.

Our infrastructure is crumbling.

Our kids are not getting the education we will need them to have to keep our economy strong.

Yet we have the highest percent of our population in prison.

I really wish we would pay for the things this country needs to stay strong and quit throwing good money after bad on things that help only a few.
With a nearly $3 trillion Federal budget (not including local and sate spending) what the hell in not being funded?
 

red states rule

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Care, is the lying?

House Approves Democratic Budget Plan
Thursday March 29, 3:14 pm ET
By Andrew Taylor, Associated Press Writer
House Approves Democratic Budget Plan; Measure Boasts Surplus if Bush's Tax Cuts Expire


WASHINGTON (AP) -- The House Thursday narrowly passed a $2.9 trillion Democratic budget blueprint predicting a big surplus in five years but relying on the expiration of tax cuts to do so.
The 216-210 vote sets up negotiations with the Senate, which last week passed a budget blueprint with similarly large spending increases for education, defense, homeland security and veterans programs.

The measure comes in response to Democratic complaints that Bush has shortchanged domestic programs funded each year by appropriations bills -- including education, health research and grants to local governments -- while awarding deficit-boosting tax cuts tilted toward the affluent.

Democrats said the $2.9 trillion plan for next year would point the way to a surplus after years of red ink under Bush and a GOP-controlled Congress. Republicans said that $153 billion surplus in 2012 would appear only if tax cuts passed in 2001 and 2003 expire in four years -- amounting to the "largest tax increase in American history."

The future of the Bush tax cuts will likely be decided after the 2008 presidential election. While in the majority, congressional Republicans never held votes to make all of them permanent, despite Bush's annual calls to do so.

Bush huddled with House Republicans at the White House, saying afterward: "We spent time talking today about our strong belief that we've got to keep taxes low. "

The Democratic budget received brickbats from Republicans because it would produce a $153 billion surplus in 2012 only by assuming tax cuts enacted during Bush's first term expire. Those tax cuts include lowered rates on income, investments and large estates, as well as breaks for married couples and people with children.

At the same time, the plan awards domestic agencies, on average, budget increases of 6 percent over current levels, far the less than the less than 1 percent increases recommended by Bush.

Congress' annual debate on the budget is guided by an arcane process in which a nonbinding budget resolution sets the stage for subsequent bills affecting taxes and benefit programs such as Medicare, as well as the annual appropriations bills.

In most years, Congress leaves alone difficult budget issues such as the unsustainable growth in benefit programs such as Medicare and simply focuses on the 12 annual bills funding the budgets of Cabinet agencies such as Defense, Education and Agriculture.

This year is likely to be such a stand-pat year. Decisions on the fate of the Bush tax cuts are expected to wait until after next year's presidential election.

Extending the 2001 and 2003 tax cuts would cost about $250 billion in 2012 alone, which would balloon to $389 billion after accounting for extending other tax cuts and adjusting the alternative minimum tax so that it does not ensnare more than 20 million additional middle class taxpayers.

Democratic leaders view passing a congressional budget plan as a key test of their ability to govern. The GOP-controlled Congress failed to pass a budget last year, which fouled up passage of the annual spending bills lawmakers pass each year.

The Democratic budget blueprint calls for a nearly $25 billion increase next year for domestic programs popular with lawmakers in both parties, approving Bush's record $50 billion budget increase for the Pentagon's non-war budget and $145 billion for operations in Iraq and Afghanistan next year.

Those spending boosts would cause the deficit to rise from $209 billion this year to $241 billion in 2009 before increased revenues from the expiration of the 2001 and 2003 tax cuts rapidly generate a surplus.

The rival Senate plan contains would fail to generate surpluses since it dedicates $180 billion to extending several of the most popular tax cuts due to expire at the end of 2010.

One of the most important features of the Democratic budget plan is to require lawmakers seeking to cut taxes or boost benefit programs -- such as Medicare, children's health care or farm subsidies -- to "pay for" the changes with tax increases or offsetting spending cuts.

That rule would greatly complicate efforts later this year to boost funding for a popular health insurance program for poor children.

Democrats opted to put off politically painful decisions on shoring up the finances of Medicare and Social Security.

Republicans countered with an alternative plan cutting $279 billion from federal benefit programs such as Medicare and Medicaid over the next five years -- far greater cuts than proposed by Bush in February.

The plan, authored by Paul Ryan of Wisconsin, top Republican on the budget panel, would fully extend the 2001 and 2003 rounds of tax cuts, at a cost of about $450 billion. But Ryan's plan lost by a sweeping 160-268 vote.

Ryan warned his colleagues that the looming retirement of the Baby Boom generation threatens to swamp the budget because of the spiraling costs of Medicare and Social Security.

"If we don't get a handle on our fiscal situation, if we don't recognize the fact that if all we do is raise taxes to balance the budget in 2012, you're going to go right back into deficits soon thereafter if we don't control spending, if we don't reform government," Ryan said.
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