could someone try to explain Bush's 2001 & 2003 tax cuts?
and explain how Obama's plan to expire Bush's tax cuts will benefit us?
- gregory_dittmanLv 71 decade agoFavorite Answer
The tax breaks were to get the U.S. out of a Clinton era recession and to get the stock market, which crashed in 2000, back up and running. The plan worked in the stock market and the taxes generated were actually more as industries grew and became more profitable.
The best tax generated from Clinton's term was $1.9 trillion (that was his budget anyways so i could have been less) when the U.S. had the Y2K bug fix and the internet/tech/information boom. For this year's budget, the income to the federal government was $2.66 trillion in income.
So how does tax cuts help? Low taxes put more m in the hands of businesses and consumers. Businesses can take the money and invest it in new equipment and new employees. The customers can spend a little bit more and if every taxpayer had an extra $300, that's an extra $45 billion pumped into the economy for one year. Those investing in stocks (such as with a 401K) would have to pay less when means they have more money for retirement. People with pensions would also see more money along with people that invested in their homes and sold them to live in a cheaper place for retirement would get more of the money.
Higher taxes do the opposite. The idea that higher taxes means more money into the government is false. Higher taxes at a point (over 18%) actually slows down the economy with even higher taxes like in Europe really slowing down the economy. What would you do if instead of getting $300, you had to pay $300 more and not see it work for you? Chances are you would spend less and less spending would be happening by everyone dragging down the economy.
Imagine getting free healthcare but only allowed to work for 1,482 hours (so they could get people to fill in when other workers are absent) like in France instead of 2,080+ hours in the U.S. and even then France has twice the unemployment rate than the U.S. and of course twice the tax rate. That's the kind of government Obama and the Democrats want. They love France and its system.
- DilligasLv 61 decade ago
It won't. Obama's plan to tax oil companies,industry,and the rich with windfall profit tax and capital gains tax, inheritance(death) tax, and a whole bunch will have the following results. NO company absorbs the tax, they pass it on to the consumer. If you tax capital gains and related areas, investors don't invest. No investment money, no new jobs, existing jobs go away as investment capital dries up. Companies will just either close or move to another country where the taxes are lower. Ireland just did away with corporate taxes and has had the biggest increase in growth it has ever had. Iceland taxed and gave easy credit and has gone bust. Obama's plan to redistribute the wealth means those who earn a living will now pay money in the form of new taxes to the government so that the government can redistribute the money. "EACH ACCORDING TO HIS NEEDS" Karl Marx. All of Obamas plans for health care, education reform, and redistribution of wealth will result in higher taxes. He feels that the government can do a better job at it than the people that earn it. The same way government does such a good job with Social Security and Medicare. IT IS SOCIALISM. MARXISM. I do not want that for America. Please don't vote for Obama. If you don't like McCain then write in Hillary or someone else.
- SamboLv 41 decade ago
I laugh at people like Mr. Informed Voter up above. Here's what he doesn't tell you:
The Bush tax cuts allowed more people like you and I to put money away in 401(k) programs. After the Bush tax cuts, the economy grew and jobs were created, which is why Bush was re-elected in 2004. In fact, everything was going fine up until mid-year 2007. People have short term memory but job growth occurred in 2003-2005. Under Bush, the Federal tax revenue increased to levels never seen before.
My biggest problem with Bush has been the inability to cut spending. The problem is not on the revenue end, its on the expense end.
Tell why Democrats never talk about "wealth creation"? That's because what they call "Fairness" is about rewarding those that look to government for sustenance while punishing those that look to hard work for advancement.
- 1 decade ago
The Bush tax cuts lowered the tax rates for those with high incomes, reduced the capital gains tax (taxes paid on the increase in value of property, like stock, when it is sold), and reduced the rate of tax and raised the minimum value of a estate that can be taxed. All of these cuts benefited the wealthy far more than the middle class.
Obama's plan restores the higher rates to the wealthy, and slightly lowers rates for everyone else. Considering how rich many of the wealthiest people got during the Bush years, it may be seen as only fair that they should pay more now.
The GOP counters that by giving breaks to the wealthy, they invest more which creates jobs for everyone. This theory, called "trickle-down" economics, has been discredited by most academics.
Little was done to change the tax rate for everyone else.
The Bush administration ran up a huge bill by doing this, since spending increased far above the amount being taken in in taxes (due to the wars and other spending). This is money the government had to borrow, and that we owe.
Our debt doesn't go away. We will pay for it for many years to come, and the question in this campaign is substantially who will pay for it. If we elect McCain, much of the future burden falls on the middle class.
The true patriot is an informed voter.
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- SunnieLv 41 decade ago
Here is the link for the Brooking institute. They have an excellent breakdown on the taxes of both candidates.