Saturday, June 11, 2011

Presidential hopeful Tim Pawlenty would triple Bush tax cuts, cost $7.8 trillion over ten years


Ten years after yet another failed attempt to expand our economy by cutting taxes for the rich, presidential hopeful Tim Pawlenty wants to triple the Bush tax cuts.  Even after the failings of Reagan, Bush 1, and Bush 2, Pawlenty wants to take their failed ideology to new extremes.

It is no secret that we have a huge debt problem.  What amazes me is that conservatives only want to address one side of the debate.  Now is not the time for politics as usual.  We need bipartisan support on any bill that is going to be passed.  This is obvious:  you have the left controlling the Senate and the executive office, and you have the right controlling the House.  

There simply is no way around a bipartisan plan.

Liberals are willing to cut spending.  Conservatives HAVE to be willing to put revenues on the table.  Revenues are the lowest they have been since the 1950's.  This is unacceptable.

The Bush tax cuts cost us $2.5 trillion, and Citizen's for Tax Justice just released a report starting that another ten year extension would cost the state an additional $5.5 trillion.  

Another report by the Economic Policy Institute informed that the tax cuts disproportionately benefited the wealthiest 1%:
• In 2010, the top 1% of earners (i.e., tax filers making over $645,000) received 38% of the breaks in the 2001-08 tax changes; 55% of the tax breaks went to the top 10% of earners (those making over $170,000).
• The top 0.1% of earners (i.e., making over $3 million) received an average tax cut of roughly $520,000, more than 450 times larger than the share received by an average middle-income family.
So how is it that we still have people supporting this ideology?

A recent public opinion poll suggests that people aren't supporting these cuts.  The poll shows that 72% of American's favor higher taxes for the wealthy, a true sign that shows where politicians interests really are:  the corporate lobby.  

So much for democracy.

ThinkProgress (TP) grabbed this quote from a Pawlenty interview with Fox News: 

 "Keep in mind, whether it be the Bush tax cuts, the Reagan tax cuts, or other tax cuts, they always produce an increase in revenue. There’s no dispute about that…We don’t have to guess what will happen to revenues if we do bold tax cuts, and mine are amongst the boldest in the modern history of the country. We saw that the revenues increased dramatically because of President Reagan’s tax cuts, same with Kennedy, same to significant extent under President Bush the second. So it’s not a question of whether revenues are going to go up. They will."

Here is this video:

Mr. Pawlenty, I encourage you to take a look at this graph provided by TP:

I personally don't understand how any politician could make those remarks with such a stark history for a  reminder.  

Nobel Prize winner Paul Krugman over at the New York Times wrote, "the revenue track under Reagan looks a lot like the track under Bush: a drop in revenues, then a resumption of growth, but no return to the previous trend. This is exactly what you would expect to see if supply-side economics were just plain wrong: revenues are permanently reduced relative to what they would otherwise have been.”

TP grabbed some important bits included in Pawlenty's plan:

– Cut the top individual income tax rate down to 25 percent
– Have just two income tax brackets, 10 percent and 25 percent
– Eliminate all taxation on capital gains, dividends, and estates
– Cut the corporate tax rate down to 15 percent
This would hand even more tax breaks to the wealthiest people in the country.  TP notes that even if his spending targets are achieved, revenue levels would be so low that deficits and debts would soar.
Excerpt from Pawlenty's speech via Talking Points Memo:

"We should cut the business tax rate by more than half. I propose reducing the current rate from 35% to 15%…On the individual rates we need a simpler, fairer flatter tax system overall. I propose just two rates: 10% and 25%. Under my plan, those who currently pay no income tax would stay at a zero rate. After that, the first $50,000 of income – or $100,000 for married couples – would be taxed at 10 percent. [...]
In addition, we should eliminate altogether the capital gains tax, interest income tax, dividends tax, and the death tax."
This proposal would only generate 13.6% revenues as a percentage of GDP from 2013-2021.  That's $7.8 trillion on top of the $2.5 trillion debt generated from the Bush tax cuts.  
Will we ever learn?  I know conservatives want to cut spending, but things still cost money.  I know the recent trend in conservative politics is to double down when they are wrong, but now is not the time for pride.
We have a serious problem in the country, and until conservatives are willing to compromise, the problem will continue to perpetuate and grow exponentially.  


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