on the Bush tax cuts

I'm really getting tired of hearing all of the screaming about letting/not letting Bush's tax cuts expire.  I believe in being informed before stating my opinions so here is some realistic, historical information you should look at before you say "No way":

  • In 1921 & 1925, major taxes cut were passed. In the following years a stock market bubble formed while working class wages stagnated, then in 1929 the bubble burst and the economy crashed into the Great Depression.
  • In 1981 a tax cut was passed. The economy sank deeper into recession and stayed in recession for nearly two years.
  • In 1987 major tax cuts were passed. By 1990 growth declined leading into the 1991 recession.
  • In 2001 a tax cut was passed, and another rebate was given in 2008. From 2001 through 2008 the economy grew slower than it did in the preceding 8 while a bubble formed in stocks, housing, and executive salaries. In 2008 the bubble burst, and now the economy in sinking into the worst recession since the Great Depression.
So based on these few details, what makes anyone think that continuing the tax cuts will somehow boost the economy - historically it hasn't.  We, as a country, have lived the last 10 years spending more than we had and there comes a point when we will have to pay for all of our excess.

Keep in mind that from 1945 - 1963 the top tax rate for people on income over $200K/year was over 90%! Seems to me that most people feel that during those years, our nation was the most productive and wealthy nation in the world.  Currently the highest you will pay is 35% on income over $311K/year and 39% if the cuts are rolled back.

Regarding allowing the tax cuts to expire, right now people pay income taxes on a sliding scale from 10% up to 35%. The old 2000 rates started at 15% and went up to 39.6%. So, at the most, there would be a 4-5% increase in the tax rates.  From a Wall Street Journal/Investing article:

It's worth noting that income tax rates can be deceptive. While middle earners may be paying a top marginal rate of 15% or 25%, their average tax rate is much lower. After counting deductions and exemptions, says the IRS, the typical middle-income family is actually paying less than 10% of gross income in federal income tax. Taking rates back to 2000 might raise that by a point or two. (http://online.wsj.com/article/SB10001424052748703977004575393483572603148.html)
We need to tighten our belts, let the cuts expire and get back on track as a nation, but that is just my two-cents...

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