Why were the Bush Tax Cuts fake?
Because they were all put onto the government's credit card. We still have to pay those taxes.
Why were they steenking?
Because there is a slow, decade long shell game being played upon the middle class. How many of you have watched for the shell with the peanut close enough to see where it is going?
Let's go below the fold to see where it has gone.
Consider this, from The Great Tax Shift, by Peter R. Orszag, Senior Fellow at Brookings Institution.
The ultimate effect of the tax cuts depends in part on how they are eventually financed. There are two options: reductions in other government programs and increases in other taxes. Borrowing indefinitely, the strategy preferred by many policy-makers, is not a long-term solution. That's because the longer policy-makers wait to pay for the tax cuts — or to give up on the exercise and simply cancel them — the more harm is imposed on the future economy from intervening budget deficits and the more the nation risks a full-blown fiscal crisis.
That danger exists because the deficit-financed tax cuts are, overall, harmful to the country's economic growth. Tax cuts themselves can have a positive direct effect on the economy; for example, they can reduce marginal tax rates and encourage people to work or save more. But tax cuts also increase the budget deficit, which has an adverse effect on economic growth over the long term because it reduces national savings, one of the key determinants of long-term productivity. Given the structure of the 2001 and 2003 tax cuts, various studies suggest that the net effect of these cuts is likely to be negative in the long run.
Are we seeing that beginning to come true today?
Well, certainly for the middle class, probably not for the upper class. In his recent stump speeches Obama has been pointing out that middle class after tax incomes dropped by about $2000 annually, (adjusted for inflation), since the Bush Tax Cuts were enacted into law. And upper class after tax incomes have increased more than $5000. The Laffer Curve effect seems to have worked for the latter but it does not seem to have “trickled down” to the middle class.
Now that actually makes sense. The key issue driving any analysis of the Laffer Curve is investment. It relies upon the fact that the money saved by taxpayers will be invested and the resultant economic growth will outpace the lost revenue from taxes. So yes, the upper class taxpayers, (the top 5%), got more from their increased investments that were paid for from those tax cuts. But the 95% who lived on the other side of the railroad tracks did not. Because we all have to eat and sleep and pay for health care before we can invest.
This is a global economy with more than two billion people in India and China receiving enough investment from the rest of the world to grow their national incomes at close to a ten percent annual rate. But here in America we are only getting enough investment to grow at about two and a half percent per year. The answer to the puzzle expressed above is that the investment from the money saved in tax cuts was to a large extent invested overseas. That's most likely why we saw no “trickle down” to our middle class. That's why 95% of us came out worse off.
The government forewent about two trillion dollars in revenues so far since the Bush tax cuts were enacted into law. But they have already put twice that amount, four trillion dollars, into the national debt accounts. And if the law is extended into 2014, the total amount of the loan to the people that was misnamed as "tax cuts", will be almost 4 trillion dollars.
Our taxes were not cut: the Bush administration just loaned us that money in return for our vote. If we don't pay it back, (with interest), the country will go bankrupt in the same way the Soviet Union did in the late 1980s. Enjoy the rest of our superpower status while you still can!
Can you now see where all those peanuts went, moved around so swiftly before your eyes, hidden under the moving shadow-show that we were all treated to for the last six years?
For in and out, above, about, below,
'Tis nothing but a Magic Shadow-show,
Play'd in a Box whose Candle is the Sun,
Round which we Phantom Figures come and go.
And we still owe the government all that money that the government loaned us, -- and it had the audacity to call it a tax cut: .... A FAKE, STEENKING TAX CUT!
The Worldly Hope men set their Hearts upon
Turns Ashes -- or it prospers; and anon,
Like Snow upon the Desert's dusty Face
Lighting a little Hour or two -- is gone.
And we have to pay it back with interest!
What! from his helpless Creature be repaid
Pure Gold for what he lent us dross-allay'd --
Sue for a Debt we never did contract,
And cannot answer -- Oh the sorry trade!
Hear this, John S. McPalin! --- We don't need no more of those fake, steenking tax cuts!
The Worldly Hope men set their Hearts upon
Turns Ashes -- or it prospers; and anon,
Like Snow upon the Desert's dusty Face
Lighting a little Hour or two -- is gone.
(the verses are from the Rubayyat of Omar Khayyam)