I have just written to my Representative and to my Senators, suggesting that we not extend the Bush tax cuts at all. Instead, we should rebuild infrastructure with a jobs program. Maybe implement tax cuts that benefit those who need it most and will spend them. My letter is over the jump.
Dear Congressman Smith, Senator Murray, and Senator Cantwell,
Under George W. Bush's administration, Congress passed big tax cuts in 2001 and 2003 that overwhelmingly favored the richest people. At the time, we had a federal budget surplus and had begun paying down the national debt. Congress, which was controlled by Republicans, passed these tax cuts using reconciliation so they could pass it with 51 votes, and consequently the cuts are expiring at the end of this year.
At the time the tax cuts were implemented, there was no particular need for tax cuts. President Bush's theory was that he could give Americans a tax cut because of the surplus. This was extremely irresponsible, given our multi-trillion dollar national debt, multiple underfunded federal programs, and potential emergencies (which in fact occurred). But because he could do it, he did it.
Now there is a lot of talk about extending the tax cuts for everyone, or for just those earning under $200,000 (or whatever it is for a family). I have heard that extending all the tax cuts would cost $4 trillion over 10 years. It would cost $3.3 trillion if we leave out the richest 2%.
While I don't enjoy the idea of paying more taxes, since I'm just barely getting by myself, I think that there is no good reason to extend the tax cuts. We didn't need them when they passed. The most benefit goes to the people who need it the least and are the least likely to spend it. It obviously does not help to create jobs.
The fact is, we can't afford to extend the tax cuts. I advocate government spending to stimulate the economy, but nearly all economists will tell you that tax cuts are not the way to do that, particularly tax cuts for wealthy individuals. Furthermore, we already have new significant tax cuts through the Obama administration's stimulus and health care reform packages.
On the other hand, the federal government could create a lot of jobs to rebuild infrastructure and we would get a pretty good return on our investment - improved infrastructure plus a stimulated economy that creates private sector jobs. We might continue some of the refundable tax credits that help those who need it the most. I'd certainly be OK with that.
I hope that regardless of what other tax cuts Congress might implement, you will insist that it is irresponsible and unproductive to give tax cuts to the wealthiest among us.
Regards,
Xxxxxx Xxxxx