Back in 2000 – America was looking at having a fiscal surplus for the first time in a very long time. The country was paying off the deficit and despite a recent slowdown after the Tech boom…the state of America’s affairs were solid and in good order. It was during that time that George W. Bush ran on his promise to cut taxes for Americans despite many loud voices protesting this. It doesn’t take a lot of political courage to offer tax cuts to Americans; it’s very hard to say what you’re willing to cut in order to pay for those tax cuts. Well – Bush passed through two rounds of tax cuts that had a disproportionate benefit to America’s wealthiest Americans only further increasing the income gap and fast forward 12 years…the state of America’s affairs are not solid and in good order. Those cuts in revenues have jeopardized America’s ability to finance the infrastructure for the 21st century.
The reason for this fiscal imbalance is due to two main issues.
#1 – America isn’t pulling in enough revenues due to both low taxes relative to historical norms and the country not being at full employment yet as we recover from the Bush economic crisis.
#2 – America has had a temporary runup in spending on necessary and fundamental safety net programs like unemployment, food stamps, temporary assistance for single mothers etc
Now – in 2000 – we had a surplus and the debate was what we should do with that money…pay down the deficit or give it to Americans as tax cuts. In 2012 – we have a 1 trillion deficit and Mitt Romney is promising to further cut everyone’s taxes but he’s not going to tell you how he’s going to pay for it. We do know that Romney has closely embraced the House Republican budget which cuts 3.3 trillion out of the social safety net and it is estimated that under Mitt Romney’s plan – a person making $10 million a year will receive a tax cut of $2.5 million a year. Well – nothing in this world is free…and if Romney wants to slash tax rates….it’s going to mean cuts in vital programs like Medicare, Social Security, Medicaid etc. It means – the middle class loses in order to pay for further tax cuts for the rich all under the guise of ”free enterprise”.
Romney’s plan would increase the deficit more than President Obama’s – see HERE.
Wall Street Journal has the story:
Mr. Romney has pledged a 20% cut to income tax rates for taxpayers in all income brackets but has offered few details for how he would pay for the proposal. Mr. Romney also has vowed to bring federal spending under control, while offering few details on which programs he would cut.
He homed in on the issue of fairness as he offered a retort to Mr. Obama. The president has encouraged Congress to support the so-called “Buffett Rule,” a minimum 30% tax on people earning $1 million or more, arguing that higher-income Americans have benefitted most in the recent economy and that passage of the rule is a matter of fairness.
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