Liberally Conservative

"Freedom is never more than one generation away from extinction. We didn't pass it to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same, or one day we will spend our sunset years telling our children and our children's children what it was once like in the United States where men were free....... ~Ronald Reagan~

Tuesday, July 11, 2006

It's the Tax Cuts Stupid!

Joe Biden (D-DE) is just one of the liberals who feel tax cuts are for the rich and do nothing for the U.S. economy. Biden loves the talk show circuit so he can bluster over something he remains clueless about.
April 28, 2006 press release:
Washington, DC – Today, U.S. Senator Joe Biden (D-DE) offered an amendment to the emergency supplemental bill that would help fund the war in Iraq by cutting off the enormous and irresponsible tax breaks for the richest one percent of Americans. According to Biden, the first five years of the Administration’s latest cuts, set to begin this year, will cost the U.S. Government $27 billion and will grow to more than $150 billion over the next ten years. Additionally, these breaks apply only to those with the highest incomes; over 97 percent of the billions in tax breaks will go to the wealthiest one percent of Americans. “The President’s record of tax cuts during a time of war is a record of utter disregard for our nation’s financial future,” said Biden. “It is a record of indifference to the price our children and grandchildren will pay to redeem our debt when it comes due. It is time for us to call a halt to this irresponsibility. It is time for us to pay for the choices we make. It is time to pay our bills. “Last year alone, millionaires collected an average tax cut of $103,000 from the breaks enacted since 2001. With the new breaks set to begin this year, more than 99 percent of Americans will get nothing, zero, zip, zilch -- it will all go to the top one percent. This is the cherry on top of the whipped cream for the most blessed among us. “My amendment says: No more of these giveaways until we can pay our bills, meet our responsibilities, face up to our own duties. If we miss the chance to take this small step back toward fiscal sanity, if we mock the sacrifice of our troops with gold-plated giveaways to those from whom nothing is asked and to whom so much has already been given, shame on us.”
Biden loves the scare tactics, using misinformation to discredit an administration who has it correct. The worst part is Biden uses the war on terrorism, aka war in Iraq, and our troops as his defense.
The fact of the matter is unemployment is at 4.6%, in economic terms it's a non-factor. Next, new jobs are consistently being created and wages are increasing. The jobless rate is determined by another separate measure called the "household survey," which found that 387,000 new jobs were created in June after increasing by 288,000 in May. The household survey captures self-employment that the business survey doesn't.
Wages rose 4.6% in this year's second quarter, the fastest quarterly pace since 1997. A 7.4% gain in total worker compensation (wages and benefits) after inflation in the current expansion, is much higher than the 2% gain over the same stage of the business cycle in the 1990s.
Tax receipts will be about $250 billion above last year's levels and that the deficit will be about $100 billion less than what they projected six months ago. Tax revenues are climbing twice as fast as the administration predicted in February, so fast that the budget deficit could actually decline this year. xxx The main reason is a big spike in corporate tax receipts, which have nearly tripled since 2003, as well as what appears to be a big increase in individual taxes on stock market profits and executive bonuses. xxx On Friday, the Congressional Budget Office reported that corporate tax receipts for the nine months ending in June hit $250 billion -- nearly 26 percent higher than the same time last year -- and that overall revenues were $206 billion higher than at this point in 2005. xxx Congressional analysts say the surprise windfall could shrink the deficit this year to $300 billion, from $318 billion in 2005 and an all-time high of $412 billion in 2004. Individual tax payments in 2005 were only $972 billion -- below the $1 trillion reached in 2000, even without adjusting for inflation. xxx Fed Chairman, Ben Bernanke said the tax cuts had undoubtedly contributed to economic growth, which in turn bolstered tax receipts. "One consequence of strong income growth is that we are enjoying higher-than-expected levels of tax collections," he said. xxx
Imagine the revenue available to cut the deficit if politicians on both sides of the aisle would stop the earmark pork spending to make local constituents happy. With all the spending to fight natural disasters and the war on terror the U.S. economy is running well. If Joe Biden and his colleagues have their way, the tax and spend politicians on the beltway will "fix" what isn't broke.
xxx Data Source: Wall Street Journal

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