Why the Bush-era Tax Cuts Should Expire for the Richest Americans07.25.10
The Bush Tax Cuts are set to expire at the end of this year. The Republicans want to continue them; the Democrats want to let them end.
Democratic leaders, including Mr. Obama, say they are intent on letting the tax cuts for the wealthy expire as scheduled at the end of this year. But they have pledged to continue the lower tax rates for individuals earning less than $200,000 and families earning less than $250,000 — what Democrats call the middle class.
To put this in perspective, this means that the Democrats — the party typically in favor of higher taxes to pay for their penchant for more government programs — aim to keep the tax cuts for nearly 98% of Americans, while letting the unfunded, deficit-increasing Bush tax cuts lapse for the richest of earners.
This seems like the best course of action for a number of reasons:
- The one group of people that don’t need financial help right now are the top 2%, the richest Americans who despite the economic recession that has left millions jobless — and even threatened with being denied continued unemployment benefits — the rich, while having lost wealth, have already rebounded. In fact, the “millionaire class held a larger percentage of the country’s wealth [in 2009] than it did in 2007,” meaning that the rich are richer now than before the recession, at which time the top 1% of raked in 24% of the nation’s income.
- I don’t find higher taxes on the wealthy to be a form of punishment regardless of the economic climate. It’s like Warren Buffet said: “If you’re in the luckiest 1 percent of humanity, you owe it to the rest of humanity to think about the other 99 percent.” No one gets to the top alone. And no one at the top should ever forget about everyone else in the middle and at the bottom.
- The overwhelming majority of Americans, those making under $200,000 per year, the supposed middle-class and below, the group most affected by the sub-10% unemployment rate (but by some accounts could be upwards of 20%), can’t handle having their taxes raised. They simply can’t afford it. (Now, one could argue that $200,000 per year earners could afford it, but arguing about where the middle class to upper class cut-off lies is a different blog post.)
- It’s estimated that the tax cuts on the top 1% could cost upwards of $40 billion. Since this action now falls under the Pay-As-You-Go rules, the cuts can’t simply be paid for by adding to the deficit. For those who want to continue the tax cuts, I find it appalling that resources would be found to spend that kind of money on millionaires, meanwhile millions of people still can’t find work. There has to be countless better ways to spend $40 billion during a time of record national debt than handing it over to the richest people in the country.
This is a society. We work together. We need each other. We don’t live in a vacuum, where we are only affected by our own choices. Individual responsibility is extremely important, but we are a collective, as well. And right now, the rich don’t need the help; everyone else does.