Detaxification
May 17th, 2003 | by Tony Steidler-Dennison |Daily Kos paints quite an accurate picture of the real costs of tax cuts. Fewer tax dollars to the feds means more to the states and, in the end, fewer services.
It doesn’t matter if Bush cuts your federal taxes if your property and sales taxes climb, costing you hundreds of dollars more a year. Any federal refund will be more than gobbled up by local and state hikes on everything from parking tickets to hunting licenses.
Because the Bush Administration was completely uninterested in offering aid to states and localities, the states, which cannot print money, can only raise costs to cover the services that people want.
I’ll add two more points to the discussion. The first is the skyrocketing number of “unfunded mandates” passed by the Republican-controlled Congress in the past several years. These are, in effect, edicts from the federal government requiring states to take specific actions. Of course, they’re only unfunded by the federal government. The states bear the financial burden for implementation and enforcement. Loss of federal funding is only half the picture. That decreased funding is accompanied by an increased number of federal mandates.
Over coffee last evening, a friend reminded me of an economic principle that bears absolute truth in the current tax-cutting spree. These tax cuts do tend to have a marginal short-term impact on the economy. We’ll see a statistical bump in spending, but only a bump. If it holds true that measures to effect the economy take eight to ten months to come to fruition, we should see that bump at the beginning of the primary season for the 2004 elections. And (pure speculation here) that temporary fix may help push some borderline voters to the right throughout the election season.
But it is temporary. We simply cannot continue to cut taxes, spend like madmen and drain the states of necessary assistance ad infinitum. Federal taxes will have to come back up as a matter of course, or we risk bankrupting not only the states, but the federal government, as well. Couple that with the increase in state and local taxes and decrease in services, and we’re all well into the red.
3 Responses to “Detaxification”
By Mary on May 17, 2003 | Reply
Thank You…lol…
*-m-*
By Len Cleavelin on May 17, 2003 | Reply
Chief Justice Marshall said “the power to tax is the power to destroy”, but watch carefully; the Repugnicans seem to be working on the premise that the power to cut taxes is the power to destroy. The reeasoning seems to be that if we cut taxes and run up a huge deficit (with most of the spending we do going to the military and to corporate welfare), we have a perfect excuse not to fund social welfare programs. Maybe I’m paranoid, but that seems to have been the Repugnican agenda since the Reagan administration.
By ernie on May 18, 2003 | Reply
In my more than half a century of life, it has been my experience that when I receive a “tax cut”, it ends up costing me more than twice what it “saved” me. The current “tax cut” package may put a few dollars in my pockets around April 2004. If the above mentioned package includes adjustment to witholding, then I may see a few cents added to my weekly paycheck. Neither event is going to help the economy in any significant way.
If the members of the current regime in Washington have any interest in strengthening the economy, they should be seeding the economy - much like seeding clouds to induce rain.
1] Offer tax and other financial incentives to companies who create new jobs.
2] Offer financial assistance to small business starts.
3] Provide financial assistance to unemployed individuals who start a small business rather than go on welfare or other public assistance.
4] Provide financial assistance for higher education or vocational training.
These are four examples which would pay big returns in a strengthened economy.
Our current President repeatedly speaks of working class men and women deserving the right to find a job. I agree with this sentiment. Anyone who wants to work should be able to find a job which will pay a living wage.
I can not see any way a tax cut is going to accomplish this. There is no incentive for business to create jobs.
If the objective really is to get the economy going again, then you have to get people working so they have money to spend.
Now on the other hand, if the true objective is to put cash back in the hands of those who do not really need it, then a tax cut can save someone like a Mr. Gates or a Mr. Rockefeller several million dollars each, possibly more.