The Bush Tax Cuts and why they don't really matter.

Over the last two months there has been an increased register of opinions on whether the Bush tax cuts should be extended or allowed to expire:

While on the surface of the argument the Bush tax cuts proponents have the upper hand. But I believe that political motivations hide the facts behind how government handles taxation, and whether "tax cuts" are of any benefit without spending cuts. Our national debt is enormous. The nations consumer debt load has officially hit a wall, and with nowhere to go, the only republican argument that holds water on the subject is that right now is not a good time to raise any taxes.

We are, despite efforts by the Federal Reserve system, in the throws of credit deflation. The government is throwing good money after bad to try to slow down the destruction of personal credit with the credit of the United States as collateral. We have been on this road for so long that the consequences of our actions are becoming predictable indicators of our downfall as an economic powerhouse. Many things come into play here: Manufacturing, lack of localized industry, education... But lets focus on just taxation...As all of these play a big part in generating the credit the US Government uses as the backstop for their reckless spending.

The Grace Commission Report(A.K.A PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL) was released to congress in 1984. At the time it had predicted that if no reforms to the tax code, and to the way industry is "regulated" were made that by the year 2000 our national debt would skyrocket to 13 trillion dollars. This report did not take in to consideration discretionary war spending. The report also concluded that 1/3 of taxes collected in the US disappear due to fraud and unmitigated waste. Another third were failures in collection and the costs of pursuing those collections as well as administrative costs and IRS employee pay, pensions, and other benefits. The last two thirds of collected taxes are eaten up, 100%, by the interest on debt-That was in 1984....This tax structure, regardless of "Cuts" and other class warfare BS from Dems and Reps, continues to plague us today. Only now that debt, if one includes unfunded liabilities, discretionary war spending, and future expenditures like the new HC law, would require the complete taxation of all of our earnings as a nation(100%) for several years in order to nick away at the principle.

These are facts folks. I don't care what side of the Bush tax cut argument you're on, you'd better be taking these things in to account. You had better understand where your argument fits into the tax scheme in our nation. Because any rosy BS you can come up with to support or disparage the Bush Tax cuts does not deal with the reality of our fiduciary health.

In my opinion the Bush tax cuts are a misnomer. We have a tax crisis in this country because the government refuses to remove or reverse spending. The deck is stacked against the 2/3rds of working folks across the country. With 80,000 plus pages in the tax code, how this structure can do anything but weaken all economic and social classes in this country a mystery to me. They have us busy arguing whether the wealthy(the ones who sign your effing paycheck) are deserving of that money. They have us arguing whether the Bush tax cuts have a positive effect on an already dead economy...It makes no sense, you don't put perfectly good medication in people who are dead.

We should be arguing...On the Left, the Right, and everything in between, whether the tax system we have now is fair to us as a nation, fair to our future generations. We should be asking why we spend so much to maintain our military power around the world. We should be asking whether expanding domestic government, which requires real economic output to operate(other people's money) is a good idea.

I don't see these as partisan issues. There are two realities in economics, the delusions of politics, and the realities of nature. If you're a pack of wolves, and you live in an environment with plenty of food, your population will explode over time. Since you're wolves, and you lack resource management skills, you will eat and eat in order to sustain a parabolic increase in population. What follows, if a replacement for the food isn't found, is a parabolic decrease until a sustainable number of you can be reached, if the trend continues an extinction(depression) will occur. It is a natural mechanism in nature to clear out excesses. It is no different in human systems, as we are part of Nature, we are subject to natural law. If an economic system does not have the means to expunge the excesses the system will collapse entirely, leaving very little to salvage.

You can't argue with nature. It is high time we took an honest view of how we handle the various systems we've put in place. It is high time we learned to accept the consequences of our actions, to face the nature of our "must have it now" culture for the destructive excess that it is. We must practice real free market economics, not the neo-Keynesian house of cards where mad government scientists attempt to rid the world of responsibility, and in doing so create monsters that can't be fed enough to sustain...They must eventually be killed. A real Free Market where one must accept responsibility, where one pays for their mistakes, where the people set the rules.

Taxes...Bush's taxes...He can shove 'em. I need a real solution...I think it's time to abolish the current tax code, shrink this government down to a point where it is no longer a threat to us, itself, and the world. We must restore the sense of restraint and responsibility lacking, not just in Washington D.C. or City Hall, but in our own homes and hearts. It's time to roll up your sleeves American, get back to work-You're on the clock. You're always on the Clock.

"It is the common fate of the indolent to see their rights become a prey to the active. The condition upon which God hath given liberty to man is eternal vigilance."

reply to post by projectvxn


Stop calling them tax cuts.

Call them Obama Tax Increases.

Because that's what they are.

Bush cut them, and now Obama is going to raise them.

reply to post by mnemeth1


Would you please focus and read the rest of the OP first.

Thanks.

reply to post by projectvxn


OK.

The reason why we have a "must have it now" culture is because of the fed suppressing interest rates to zero.

When the fed drives down rates, it wipes out all incentive to save money and increases all incentives to spend money.

Since the rate of interest earned in savings accounts isn't even close to breaking even with inflation, people have absolutely no reason at all to save their money.

Since depressed rates make credit cheap, people have every reason to spend and borrow until the cows come home.

What is the cause of ZIRP? - the criminal federal reserve.

They have destroyed us.

The people are now dependent upon handsouts, only now the government doesn't have anything left to hand out. Cutting government spending is a good start - but we are to the point of no return.

This will not end until the currency gets wiped out.

reply to post by mnemeth1


I understand all of that. But for the sake of a framework I was referring to a ridiculous discussion on taxes, in particular, a tax cut by the Bush admin that wouldn't help if it were extended or allowed to expire. I understand that Federal Reserve policies are the head of the snake. But the Tax system and how the government handles it overall is the body of that snake. The government is no ordinary snake though...It will grow another head if the body isn't dealt with.

Higher taxes will take more money from the private sector into the government and into the void of national debt, and will only cause more economic decline.

Rich or poor, it really doesn't matter how you look at it anymore.

The US debt and deficit spending are killing what little life there is in the US economy now, may as well finish it off by raising taxes on the rich eh?

What will happen is it will force even more "rich" people out of the country, many have already become "international" or dual citizens, and have relocated their businesses to other locations out of the USA.

Our stupid government will tax, restrict and regulate business and wealth until it no longer exists and what that means is assured 3rd world status for our nation.

Either that is exactly what they want to happen, or they are really so damned stupid that they believe they are doing the right things, health-care (will cost corporations billions), cap and trade, raising taxes on the rich are all going to be job killers, and only further economic decline. Ultimately leaving the majority of Americans dependant on the government, again, maybe that is what they want, but there will be a point where complete collapse will be unstoppable, and it isn't that far off now.

If people don't rise up in mass against the moves this government is making we are all doomed, regardless of your financial status.

Letting the Bush tax cuts expire for the rich is only a small component of a much larger agenda aimed at the "redistribution of wealth", but with the national debt where it is, and with out of control deficit spending the revenue they take in will be sucked into that void before it can be redistributed. A domino effect has already begun, jobs and manufacturing are leaving the country, more and more of our consumer products are being produced in China and elsewhere outside of the USA. We're not the manufacturing giant that we should be, we don't make things anymore, and we are losing jobs at a staggering rate despite official reports.

Get ready people, if they have their way, things are going to get a hell of a lot worse in the near future, and believe it or not, that is an optimistic point of view.

The Bush tax cuts matter, but looking at the big picture, it is a small factor in a very large and extremely destructive agenda that quite frankly cannot be stopped at this point.

It is what it is, go back to sleep America, enjoy being oblivious while you can, your next wake up call is going to be very painful.

reply to post by projectvxn


Yeah, I've kind of written us off.

I do not believe there is enough time left for the federal government to do anything effective.

In order to bring us back to a stable situation, they would need to slash damn near the entire federal budget. Preventing a tax increase would be nice, cutting spending would be nice, but what the criminals are talking about is like turning down the oven temperature from 400 to 390.

Its kind of like, at what point do you simply throw in the towel and say **** it.

reply to post by mnemeth1


You don't.

It takes work to save and maintain a free society. There are always choices, there is always a way, and there are plenty of willing souls to step up to the plate.

reply to post by projectvxn


Well, I'm more of the mind that the feds are going to destroy the currency, and along with it, themselves.

After they destroy themselves we can look at constructive ways to put the pieces back together again.

What I'm trying to do here is plant the seeds of freedom so people understand the proper way to rebuild a society after it has been destroyed by rampaging fascist tyrants.

In a perverse way, I'm kind of excited about the coming implosion. It will be a good opportunity for a fresh start.

Rhetorical question here

Why is that this nation was able to survive for more than a half a century and prosper with the FED in place.

this model of extreme debt started off in the 80's

Since this time unions have been busted, many financial regulations have been thrown to the wayside, taxes have decreased by a large margin -

The point being, I believe these are things conservatives at large would advocate. What puzzles me is why
has the acceleration of these ideas coincided with our decline? It would appear that once they "let the BULL loose" things have gotten progressively worse and worse for most. On the other hand, the wealthier have gotten more rich, exponentially so... Unfortunately this concentration of wealth has not translated into more jobs
or a better standard for all economically speaking, what gives?

So no B.S here (I don't expect it from you either) at what point do we start evaluating the validity of these ideas? It has been thirty years -


Now if we had moved to progressively More regulations, higher taxation and even larger union ranks I would
not be saying this would I?

I don't claim to know what will work, but it appears further reducing the above three things would not change the outcome.

OP, thank you, nice OP, very well done!

I just have to ask that, since I have now been offered up loads of theory but cannot see any tangible results from theory practiced.

I personally think we should focus on cutting the

military drastically

end NAFTA and GATT - only importing from nations which agree to purchase a proportional amount our our exports -

figure out a way to make entitlements voluntary - separate the funds so there is no dispute

end personal income tax and SFR primary property tax (why not?)

maintain income tax on any fictitious entities

some sort of purchasing tax to offset the above

stop subsidizing agriculture

Offer an insane amount of money to the person or group who can invent free energy creation technology
and release this technology to FREE to the public/private.