The Pardu

The Pardu
Watchful eyes and ears feed the brain, thus nourishing the brain cells.

Monday, October 5, 2015

Tax Policy As Middle Class Killer: Connect The Dots USA, Bush Tax Policy And Reaganomics

I find myself starting another piece with a video. 

The vast majority of readers have no intimate firsthand knowledge of Ronald Reagan's supply side/trickle-down economics. While you may know Trickle-down economics has failed the nation with each Republican Administration since Reagan's terms, you may also side with those who ignore its deleterious impact on the nation and the future.

Trickle-down economics does to work for any American who earns below the Top 20% level. Moreover, it offers obscene earning potential and wealth grow for Top 1% (ers).

An absolute farce economic theory!

Earlier today we published  Tax Cuts? The Trickle-down Gift To The Wealthy  from Connect The Dots USA. 
Let's again visit with Connect on this most critical issue: The Vote. Your vote for the GOP is a vote for trickle-down supply side economic policy.
Supply-side economics
Supply-side economics is a school of macroeconomic thought that argues that overall economic well-being is maximized by lowering the barriers to producing goods and services (the "Supply Side" of the economy). By lowering such barriers, consumers are thought to benefit from a greater supply of goods and services at lower prices. Typical supply-side policy would advocate generally lower income tax and capital gains tax rates (to increase the supply of labor and capital), smaller government and a lower regulatory burden on enterprises (to lower costs).
Ronald Reagan "Fathered' the flaw and failed economic theory deep into the psyche of the GOP. Even today we see and hear nothing other than Reaganomics from potential presidential candidates who speak of tax policy. The super "slick" GOP presidential candidates avoid the issue as if they were avoiding influenza. They know the following graphics truly represent the affects of Reaganomics.

Exhibit I.
On the other hand, the greatest periods of economic progress and stability in our nation have been when unions and the middle class were strong. Wages were fair and on the rise putting money in the hands of Americans who in turn spent that money. This benefited the wealthy and the middle class and thereby the entire nation.
We Grew Together

Exhibit II.
..... the facts of the last 30 years don’t support our national experiment with trickle down economics. What was once a legitimate idea to be tested based on the work of Laffer, has become a laughable mythology of the modern right. 
Since the 1980s, and even dating back to the 60s and 70s, we have been slowly but steadily lowering taxes. Taxes on the wealthy have been reduced almost 60% since 1961. Corporate taxes have been reduced and are now at an effective rate around 15%. In fact, Sally Kohn notes "corporate tax receipts accounted for 30 percent of US federal revenues in the mid-1950s. In 2009, they made up just 6.6 percent of federal revenue streams." While corporate rates have dropped along with the tax rates of the wealthy, the effective rate for everyday Americans has actual increased over that same period.

Income Gains Since 1971

As Connect adroitly shows us, Bush economic policy was the ward of Reaganomics and it failed this nation miserably.

October 4, 2015
You can see here that the Bush tax cuts were skewed heavily to the Top 1% and especially the Top 0.1%. In the first decade, the Bush tax cuts cost $2.5 Trillion in lost revenue and would have cost $3.7 Trillion from 2013 to 2022 (not including debt service). Instead of letting them all expire on Dec 31, 2012, Obama’s 2013 tax deal made permanent all the Bush tax cuts except for the extra tax cuts for the top 0.7% — recouping just $624 Billion over ten years. 
Of course, the GOP tax-cutting obsession is on full display in the GOP presidential primaries. Jeb! wants to double-down on his brother’s tax plan — leading to $3.6 Trillion in additional lost revenue over the next decade. Even taking into account voodoo economics’ “dynamic scoring” nonsense and a pie-in-the-sky 4% GDP growth that Jeb! appears to have pulled out of thin air (or his nether region), you’re still looking at adding $1.6 Trillion to the deficit/debt. And like his brother’s tax cuts, Jeb’s cuts are skewed heavily in favor of the super-rich, with the middle class getting an average 2.9% decrease in taxes and the Top 1% like him getting an average 11.6% decrease. 
Not to be outdone, Trump’s tax plan would drop the top rate down to 25% (from 39.6%) and the corporate rate down to 15% — resulting in a HUGE loss of revenue of $12 Trillion over the next decade. Under this scenario, even his populist plan to go after the hedge fund guys loses any punch — barely increasing the tax on carried interest from the current 23.8% to Trump’s maximum 25%. Factoring in other aspects of Trump’s plan, most hedge fund managers would actually see an overall tax cut. 
Self-financed Trump may not be a puppet of the wealthy donor class, but his tax policies nonetheless reflect that of the most privileged plutocrat. And they didn’t even need to donate a dime for it.
If you think your vote doesn't count think of America without the successful interventions of Democrats in late 2008 and early 2009.
When you view the data, even you must admit, your GOP vote is a social vote. 

No comments :

Post a Comment