Can someone explain how the Bush tax cuts worked?
I'm a sophomore in high school trying to write a debate about why we should let the tax cuts expire, but I'm having trouble understanding what's really going on. Thanks!
- The SolutionLv 710 years agoFavorite Answer
The first 2 answers had some thought, some reality and were interesting, but really weren't written to help a H.S. Sophomore Debate.
First thing, that needs to be understood before the tax cuts can be explained is Surplus, Deficit and Debt in a couple of sentences:
The government makes money from taxes, spends money on programs. If they make more money than they spend in one year, that is a Surplus. If the spend more money than they earn, that is a Deficit. When you get back to back to back Deficits, that is the Accumulated Debt.
Now, for the Bush Tax Cuts:
When Mr. Bush took office, the US had a Debt. The last few years of Mr. Clintons Term there were Surplus'. These surplus' were NOT used to pay back the debt. Mr. Bush decided that since we had extra money left over, they sent everyone a $300 rebate check, and lowered the amount of taxes Everyone paid.
This was a good idea. We really want the amount we take in in taxes to equal the amount we spend. We don't want a lot left over and we don't want to owe a lot.
So, after a few years, the Economy started going down hill, and rather than Raise the Tax Levels back to where they were when we had SURPLUS', they left them low and BORROWED money every year to pay for the PROGRAMS that we keep increasing.
In answer to your basic question?.....YES we should let the Tax Cuts expire for EVERYONE, not just the Rich. Get back to bringing in enough Taxes to cover the cost to run the country. Then, adjust personal and corporate taxes to prevent this from happening again.
We have to get the DEBT under control. We owe about 1/2 TRILLION DOLLARS in interest payments alone each year. That is growing by about 7% a year. Do the math, in about 10 years, the interest on our debt will be MORE than all the money we bring in, in taxes. Then what happens when we can't pay our Creditors? They quit loaning us money. Then how do we pay for Defense and Social Programs if we have to pay our whole paycheck for interest, and no one will give us a loan?
I hope that helps at all.
- JamesLv 610 years ago
I'm sorry. You're on the bad end of the debate. Most likely you'll be blown out of the water. The cuts were across the board including the triple dipping estate ( death ) tax. The left media and Obama want to put an end to the American dreams of self improvement and let a socialist government dictate how much $ you can accumulate and even who should have it. The " rich" or top 1% already pay 40% of ALL tax revenue collected and the top 5% together produces 70%. 33% pay absolutely NO taxes in addition to receiving government ( taxpayer) assistance. Check out an I.R.S. tax schedule. That top 5% are the ones who have JOBS to offer. If those credits are eliminated, they take their $ and our jobs to other countries. Already happening in the U.S. following suit to Europe. Good luck.Source(s): U.S. dept.of revenues reports/ I.R.S. tax schedule and Wall Street.
- BadWolf63Lv 710 years ago
Here is an hint:
"At the time Bush took office the economy had grown at a 1.1% annualized rate over the previous three quarters to March 31 of the first year of Bush presidency  (see Early 2000s recession). Bush had his tax cut plan approved by Congress in June.
Overall real GDP grew at an average annual rate of 2.5%. Between 2001 and 2005, GDP growth was clocked at 2.8%. The number of jobs created grew by 6.5% on average. The growth in average salaries was 1.2%. Growth in consumer spending was 72% faster than growth in income. Investment in residential real-estate soared, growing 26% faster than average.
Despite growth levels below previous levels, a March 2006 report by the United States Congress Joint Economic Committee showed that the U.S. economy outperformed its peer group of large developed economies from 2001 to 2005. (The other economies are Canada, the European Union, and Japan.) The U.S. led in real GDP growth, investment, industrial production, employment, labor productivity, and price stability."
With the Nov 2006 election, the Dems got the control of both House and Senate... and everything started to go into the drain
The thing is that not only you need low taxes, but also a good environment that appeal the so called "job makers"
Ops... this is why we should NOT let the tax cuts expire...
- RonaldLv 610 years ago
the solution was the best answer the other two were bias and scued to the party point of view and not accuate. they were misre presented take the solution point and you will be fine good luck.