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[shark66]

msm859 wrote:

The country would be way better off if they all expired then if they were all extended.

Care to explain the economics behind this statement? My understanding is that anyone making enough to pay taxes to begin with will be affected if the Bush tax cuts don't get extended?

Which is exactly what is going to happen the way I see it at the moment...for once I hope I'm wrong...

[msm859]

msm859 wrote:

Care to explain the economics behind this statement? My understanding is that anyone making enough to pay taxes to begin with will be affected if the Bush tax cuts don't get extended?

Which is exactly what is going to happen the way I see it at the moment...for once I hope I'm wrong...

Sure. The Bush tax cuts had 2 theories behind them. 1. we had a surplus and it is really the people's money so we should give it back to them. And 2. The tax cuts would stimulate the economy and bring in more revenue -- supply side economics. Supply side economics was an interesting theory when I was getting my BS in Economics in 1981. It is no longer a theory -- it doesn't work. (Unless perhaps we started out with very regressive marginal tax rates - well over 50%). Reagan first tried it and it didn't work. But if there is now any doubt, the 8 years of Bush experiment should lay it to rest. Actually the problem is trying to find the right "balance". Tax brackets that supply the revenue you need and that do not suppress growth. It appears we found the right balance under the Clinton years. We had a vibrant economy and a balanced budget. Everyone would be better off if we had a balanced budget. So even if ALL of the tax cuts expire this simply means that we are returning to to tax "brackets" we had under Clinton. Right now might not be an ideal time to take money out of the middle class -- since they would probably spend it all and help with the economic recovery. But in the long term it really is more important to have a balanced budget. Our country is really reaching a point were the massive deficits are going to become (if they aren't already) drag that will permanently hamper growth. If all of the tax cuts expire that would single handedly cut $4 trillion from the deficit over the next 10 years. That fact alone will stimulate growth and jobs. Think of all of the people who are unemployed - or underemployed. Would they rather collect unemployment or have a decent job and perhaps pay $800 - $1,000 more per year in taxes? Think of were we would be today if instead of starting 2 wars costing trillions of dollars, killing 100's of thousands, we would have declared war on energy dependence and spent that money on making this country energy independent and investing in this country to become the world leader in alternative energy. The Republicans argue taxes should not be raised on anyone in this economic environment. The truth is they only care about the tax cuts for the super rich and they don't care what effect it has on the economy today or the country tomorrow. If they cared about the economy they would be extending unemployment benefits. If they cared about the deficit they would be arguing with the President about making any of the Bush tax cuts permanent. Instead they argue we have to extend the tax cuts for everyone and by the way make them all permanent and no we cannot extend unemployment because that will add to the deficit. Incidentally one of the reasons we are even having this conversation is the Republicans put the sunset clause in was to mask the total costs of the tax cuts -- and I suspect also saying behind closed doors -- lets challenge anyone to actually let them expire in 10 years -- and raise taxes!. You have to remember one of the reasons the Democrats lost big in 1994 was because the Republicans scared the people that the sky was going to fall down and the economy self destruct because of the massive tax hikes the Democrats enacted in 1993 -- not a single Republican in the Senate voted for it and Al Gore actually had to come in and break the tie. Of courts we know the Republicans were absolutely wrong about their predictions -- as they are now. Sadly, a people who do not learn from history are doomed to make the same mistakes. So yes, we would be far better off to go back to the tax brackets we had under Clinton instead of keeping the ones Bush gave us.

[helpme2010]

I agree with msm. I did think Reagans tax cuts were the right thing to do at the right time and they did stimulate the economy, but after that, no. I got an A in my economics class last year and the government does have to spend during a recession to help the economy get back on its feet. So if the spending is done wisely, I am all for it. Helping the unemployed is one of the best ways to help during a recession, whereas lowering taxes on the rich is one of the worst. Check the congressional budget office and a host of other agencies and professionals for more info.

Once we get out of this recession, we are going to have to do some major tightening of our belts and learn how to live with less benefits and less toys.

I would be a little more sympathetic to the republicans cause of stopping the spending, if they were open to not extending tax cuts for the wealthy. Or if they would stop trying to support more tax breaks for corporations, pulling out the trump card that not giving them massive tax cuts would result in the loss of jobs. Corporations cut as many jobs as possible no matter what. If people can make them money, they will hire people. IF they can outsource or gobble up another company, they will fire people.

I'm tired of this trickle down theory that if we give all the major breaks to the rich, they will so generously spend the money and we will get to collect the scraps on the bottom. This simply does not work. It may have worked in the Reagan era, but we are in a new world now!