By: Mary Mostert, Analyst, Banner of Liberty (www.bannerofliberty.com
May 30, 2003
On Tuesday, when President Bush signed the Jobs and Growth Act cutting taxes for the third time in two years he said, “I believe in this economy.” Fifty senators voted for the bill and fifty senators voted against the bill, with Vice-President Dick Cheney casting the deciding vote. Forty-eight Republican senators and two Democrats, Zell Miller of Georgia and Nelson of Nebraska apparently also believe in this economy. Forty-eight Democrat senators and three Republicans, John McCain of Arizona, Olympia Snowe of Maine and John Chaffee of Rhode Island appear to be still devoted to a more socialist approach to taxing and spending.
The socialist view of priming the economy is more government spending to create more government jobs by re-distributing the wealth of the general public. In spite of the economic problems experienced by nations that have adopted socialism, incredibly, we appear to still have half of the U.S. Senate dedicated to the notion that socialism is good and allowing people to solve some of their own problems with their own money is bad.
During the debate Senator Mark Dayton, Democrat from Minnesota framed the socialist view of the Jobs and Growth Act by saying it was “one of the most dangerous, destructive, and dishonorable acts of Government that I have ever seen. It is a shameful looting of the Federal Treasury by the rich and powerful in America--compliments of their friends in Congress. It uses every trick in the budget book to line the pockets of the upper class. It cuts the top tax rates immediately, retroactively, and permanently. It lowers the top rate by almost twice as much as the next three. That gives the most rate reduction to people who are making over $370,000 a year, only half of that rate reduction to people making over $150,000 a year, and no rate reduction at all to people in the bottom two brackets--the 10 and 15 percent rates.”
The senator fails to mention that, after 70 years of socialist thinking on Capitol Hill, most of the taxes are being paid by those in the upper brackets by people that traditionally have the disposable income to invest in new ideas and businesses. However, if nearly all the money they make is taken away from them, there is little or no incentive to take the risk of starting a new company.
The name of the game here is job creation. People who have money to invest and who are willing to invest it create jobs.
This concept was addressed by a press release issued by the U.S. Treasury in which the department analyzed the impact the bill would have in Alabama, a state with a population of 4.3 million people:
In Reducing Taxes: 1,200,000 taxpayers in Alabama will have lower income tax bills in 2003 under the Jobs and Growth Tax relief Reconciliation Act of 2003 and more than 260,000 business taxpayers can use their tax savings to invest in new equipment, hire additional workers, and increase pay.
More than 860,000 married couples and single filers will benefit from the acceleration to 2003 of the expansion of the 10-percent bracket scheduled for 2008 and more than 270,000 taxpayers in Alabama will benefit from the acceleration to 2003 of the reductions in income tax rates in excess of 15-percent scheduled for 2004 and 2006.
In Reducing the Marriage Penalty - Just under 500,000 married couples in Alabama will benefit from the acceleration to 2003 of provisions that increase the standard deduction for joint filers to double the amount for single filers and increase the width of the 15-percent bracket to twice the width for single filers. These two provisions were scheduled to phase in between 2005 and 2009.
Increasing the Child Tax Credit - More than 400,000 married couples and single parents in Alabama will benefit from the acceleration to 2003 of the increase in the child tax credit from $600 to $1,000 that was scheduled to phase in between 2005 and 2010.
Eliminating double taxation of dividends- More than 300,000 taxpayers in Alabama will benefit from the reduced tax rates on capital gains and dividends.
There is a fundamental difference in believing in the future of this economy and believing in what Bill Clinton called “investments,” meaning taxing the public to “invest” in public works of one sort or another that create jobs in the government sector.
During the 1992 Presidential campaign, in order to get the support of business executives, Bill Clinton promised a reduction in capital gains taxes to Silicon Valley supporters, but instead asked for, and got, the largest tax increase in American history and no reduction in capital gains taxes.
That 1993 Clinton Tax Increase, which is being supported vigorously by the Democrats and slowly reversed by George W. Bush, increased the top tax rate for married joint filers to 36%, which causes married couples to pay more than unmarried couples, and added a 10% surtax on taxable income of more than $115,000, sharply limited business associated deductions, imposed a 4.3-cents per gallon tax on transportation, increased the tax funds going to low income people who paid no tax (earned income tax credit) and lengthened the time for real estate depreciation.
The 50-50 roll-call vote in the Senate indicates that only 50% of the U.S. Senate shares President Bush’s belief in this economy. The others believe socialist programs are the answer and they introduced numerous spending amendments to the Jobs and Growth Act, most of which were defeated.
Eighteen senators who are up for re-election next year voted against the Jobs and Growth Act and generally vote against President Bush’s judgeship appointments. The solution to their obstructionism is simple. They need to be replaced with senators who don’t cling to socialism and Marxist class war to solve America’s problems.
To comment: mmostert@bannerofliberty.com