In 2003, it was the hottest item on the news, the Bush Tax Cut. It was discussed and debated and it was clear that this plan was designed to do so much for so many and create those jobs that many Republicans are complaining about now. This same tax cut is now in the news as to whether the current administration will let them expire or keep them. There are pros and cons for either but I wonder if anyone remembers what was being promised and what was actually delivered upon.
“Dateline: 04/17/03 The White House this week announced details and mechanics of President Bush’s proposed $550 billion tax cutting program designed to stimulate the still-sagging U.S. economy.” “The nation needs quick action by our Congress on a pro-growth economic package,” Bush told a gathering of small business owners in Washington.” “We need tax relief totaling at least $550 billion to make sure our economy grows, and American workers and American businesses need every bit of that relief now so that people who want to find a job can find one.” “92 million taxpayers would benefit in 2003, says President.” (Longley, Robert; About.com Guide, Details of the Bush 2003 Tax Cut Plan, Retrieved fromwww.about.com). Additionally he said that ““The economic news these days is troubling – rising energy prices, layoffs, falling consumer confidence,” Bush said in the second radio address of his presidency.” “This is not a time for government to be taking more money than it needs away from the people who buy goods and create jobs.” And further added “”There’s a lot of talk in Washington about paying down the national debt, and that’s good, and that’s important; and my budget will do that,” the president said.” “But American families have debts to pay, as well,” he said. “A tax cut now will stimulate our economy and create jobs.” “Bush said his plan was broad, responsible and “the right thing to do.” It will lower tax rates for all Americans, he said.” “A lot of people feel as if they have been looking through the window at somebody else’s party,” he said. “It is time to fling those doors and windows open and invite everybody in.” (Knutson, Lawrence L., ABC News, Bush Pushes Tax Cut Plan, Retrieved from www.abcnews.go.com).
Corporate profits are up but where are the jobs promised? Wall Street made big money and continues to do so while Main Street still suffers, I still have not seen the 92 million benefiting from this but more knowledgeable people than I have said that these tax cuts should not be allowed to expire. People like CNBC Closing Bell Maria Bartiromo who stated to Chuck Todd today, that expiration of these tax cuts would hurt job creation by those who can create jobs. She mentioned that raising taxes on the business community would stop growth. “The financial markets hate uncertainty and the ‘Mother of All Uncertainties’ is looming in December, when Congress is supposed to decide what will happen to the Bush tax cuts, which are set to expire at midnight on Dec. 31.” “This will become a dominant and potentially negative story for the markets in the second half of this year.” (Valliere, Gregory; 6/10/2010,CNBC.com,The Bush Tax Cuts-What Happens in December? Retrieved from cnbc.com). I find it quite perplexing that these tax cuts were in 2003 and job creation has been non-existent since. We have lost more jobs during that time than gained so how does this make sense, again? Mr. Valliere speaks about the market not liking uncertainty. Well Main Street does not like being unemployed and unemployable but I do not see anyone, especially business, trying to help make their lives better.
Mr. Valliere gives three different scenarios in his column of what may happen if each of them is implemented. Not being as knowledgeable as he, I have to assume that he knows what he is talking about but I still must question a few points. In scenario one, he says that “failing to extend any of the Bush tax cuts, which means we’ll wake up on Jan. 1 with all rates roughly 3 percentage points higher, and dividends taxed as ordinary income, with the top rate at 39.6%.” In scenario two he contends that “Congress could throw up its hands and decide a week before Christmas to extend the Bush tax cuts for another year.” “Most Republicans would buy this idea, especially if the economy weakens and the GOP receives a major mandate in November.” In scenario three he says it’s possible that “Congress will extend the tax cuts for individuals earning less than $200,000 and families that make less than $250,000.” All in all he informs us that “Confusion will reign, uncertainty will prevail, until December.” (Valliere, Gregory; 6/10/2010,CNBC.com,The Bush Tax Cuts-What Happens in December? Retrieved from cnbc.com). The most revealing of Mr. Valliere’s comments is the one where he says that Republicans would buy the idea extending the tax cuts but not for job creation or saving the economy. It would be “if the economy weakens and the GOP receives a major mandate in November”. Is it just me or is the thought of one party refusal to do anything and wishing for a mandate in November a little scary?
Ms. Bartiromo and Mr. Valliere are not the only ones pushing for the extension of the Bush tax cuts. Thomas Donohue from the U. S. Chamber of Commerce was also speaking with Chuck Todd this morning and hinted at them remaining as well. Mr. Donohue also mentioned that it was important to get people back to work so that they can pay taxes. Not so they can feed their families or provide for their kids but pay taxes. He did not mention anything about pushing his membership to step up and help out by paying their fair share. Mr. Donohue praised the Tea Party and even went as far as to say that the market is confused because there are all these rule makings which causes business to sit on their hands and money. He hinted that there should be less rule making which I took to mean less regulation. Would this be not how we got into this mess in the first place? The one major thing that I noticed about that interview was that Mr. Donohue seemed to get a little bit more animated when he mentioned the Unions. Could this be the reason why the Chamber of Commerce is against making businesses pay their fair share and less regulation as well as keeping the tax cuts? Could the dislike and distrust between business and labor be the primary reason this country has not embraced a “united front” when it comes to getting people back to work?
Bottom line, business has had their tax break for seven years now and jobs still disappeared. Their pockets got fat but America got thin. Republicans got their mandate and ran all three branches of government for seven years with nothing to show except for two wars, a high deficit and an economy on the brink. Democrats now have a chance to show what they can do and so far I have been impressed except for those in the Senate. Let’s keep the ball rolling and fix as much as we can so that after these things are done, we can all relax and take a break. Do I really fear what the market will do? No and here’s why. The market is made up of products and services, when the poorest of the poor is able to buy and spend, the market will have to supply. Market supplying these products and services will cause it to rebound and grow. The market does not control the people; it’s the people who control the market. It’s time we started acting like it.