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Taxes and Rhetoric

By: Paul Zahorecz (Diary)  |  December 5th, 2010 at 11:25 PM  | 

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                With the release this week of the November job’s report, it was no surprise to find the topic of this morning’s political talk shows focused mainly on the economy, and specifically, the “extension of the Bush-era tax cuts”. Senator Kyl (R-AZ), appearing on CBS’s “Face the Nation” correctly refused to call them “tax cuts” while pointing out the fact that the so called “tax cuts” have been law for nearly 10 years. Senator Durbin (D-IL), appearing on the same show, meagerly attempted to frame them as “tax cuts for the wealthy”, and possible “tax increases for middle-class”.

 

While it is not surprising to hear a Democrat attempt to cast this issue as “tax cuts for millionaires and billionaires”, and “tax increases for the middle-class”, it is surprising to see the logic in the argument get lost in political rhetoric.

 

For one thing, the “Bush tax cuts” have honestly been law for almost 10 years, and calling them “Bush tax cuts” is incorrect, as the President has no authority to increase or decrease taxes. It would be more correct to call them the “tax cuts of 107th Congress”, which carried a split majority (Republican control in the house, and Democratic control in the senate).

 

Secondly, one large fact continues to be ignored, and that is the lack of a baseline for taxes. It would be one thing, for example, if the Constitution stated that taxes are set at a certain rate, and any deviation from that rate is a decrease or an increase. Obviously, no such baseline exists and therefore, a more appropriate statement is that taxes were lowered in 2001 from whatever their previous rates had been.

 

Fast forward to present time, and now the debate is whether or not to allow certain taxes to increase on specific persons, or the country as a whole, or continue to keep the tax rates where they have been since 2001.

 

Don’t allow political rhetoric to shape your opinion of this issue. Ignore the Democrats call to allow the “Bush tax cuts” to expire for the wealthiest Americans. Ignore the Democrats as they attempt to frame this as a possible tax increase on the middle-class if Republicans refuse to cooperate, and only pay attention to the facts:

 

1)      No baseline for taxes exists

2)      The current tax rates have been in place since 2001

3)      Not extending the current tax rates amounts to a tax INCREASE

 

Simply put, the Democrats want to INCREASE taxes, while the Republicans want to keep taxes where they currently are!

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  • GreyCloak

    First Income Tax (Civil War, later ruled Unconstitutional): 3%.

    1913 (after passage of the 16th Amendment): 1%, up to 7%.

    Since 1913: as high as 94% on incomes over $200,000.

    Republican history is pretty bad. From 1994 to 2001 (when we had control of Congress), $250,000 a year (later, adjusted for inflation) was the base for a 39.6% “upper-income” tax rate. Bush II reduced that marginal rate to 35%

    The current Democrat proposal on high incomes is the same as the Republican proposal passed for 1994. The House, not the President, is constitutionally charged with setting taxes.

    With no reference to history, rhetoric is simply hot air.

  • Paul Zahorecz

    Again, without any ACTUAL baseline in existence, the “baseline” is whatever the current Congress believes it to be. Yes, you can say that the first income tax was 3%; in 1913, it was 1% to 7%, and as high as 94%. But that “baseline” is nothing more than an arbitrary number based upon political decisions.

    Using your numbers, one could say that the “baseline” is 3%, as determined by the first income tax. Therefore, anything ABOVE 3% is a tax increase, and anything BELOW 3% is a tax decrease. Given that current rates are well above 3%, even extending the current tax rates would still amount to a tax INCREASE, as it would not fall below the 3% “baseline”. Until taxes fall below the baseline, calling anything a tax DECREASE would not be correct.

    While we’re on the subject, which political party is continuously responsible for keeping taxes at exorbitant rates? While you may want to say that “Republican history is bad”, it’s nothing compared to the history of the Democratic Party!