The CBO has calculated that the Bush era tax cuts have directly placed the U.S. in it's current dangerous economic condition. The CBO stated; If the Clinton era tax rates were still in place, the national debt (which was $10.5 trillion when George W. Bush left office) would have now been completely payed off.
I have signed this petition to ask my President and Congress to eliminate all Bush era tax cuts of 2001 and 2003. Elimination of these tax cuts will reduce the national debt by 50% by the year 2020. Congress is now considering the elimination or severe modification of important social safety net programs such as Social Security, Medicare and Medicaid. Changing these programs to their detriment would be unconscionable, short-sighted and unnecessary . The savings will then be used for yet another one trillion dollar tax cut for the most wealthy Americans (and lower their top tax rate from 35% down to 25%). All of these social safety net programs were enacted and developed through dedication, persistence and hard work by many millions of people over the past century. These valuable and valued programs provide desperately needed assistance to the elderly, disabled individuals and less privileged Americans. They are a promise from one generation to another and must be maintained for future generations. Debt and deficit spending come and go. These programs must remain and be improved for the current and future health and well-being of our country.
America does not have a national debt problem, instead, the U.S. has a negative revenue problem. The Republican leadership has maintained for 30 years that Americans are taxed to much and the government spends to much. Which is it? The truth is, the government has consistently offered a '40% discount' on all products and services provided to the nation, by the government, for the past three decades now. This 'discount' has precipitated the need for massive borrowing. This has in turn lead to massive debt to cover lost revenue, caused by massive unproductive and wasteful tax cuts. The CBO has calculated that 'tax cuts' are the least effective approach to generating true economic growth (tax cuts generate roughly 32 cents for each dollar expended).
The top 2% of the wealthiest Americans have an average tax rate of 16.7% (the top 1% of the wealthiest Americans own 35.6% of all private wealth). Wall Street pays an average tax rate of 11%. Many of the largest corporations in America pay zero in taxes and instead, generally receive 100's of millions or even billions of dollars in refund checks from the IRS (many corporations actually make money when filing their income tax return). The tax burden has shifted to small businesses and individuals in the bottom 90% of tax payers. In 1961, small business owners and individuals paid twice as much in federal income taxes as large corporations. By 2011, small business owners and individuals will be paying nearly five times in taxes as compared to what large corporations pay. Are these tax rates completely out of balance? Definitely.
Here is the basic problem; Far to much money is now in far to few hands. This highly concentrated wealth is typically saved in the U.S. or off-shored. There is a total of approximately 20 trillion dollars in offshore bank accounts, brokerage accounts and hedge fund portfolios. Approximately $1.4 trillion is held in offshore banks in the Cayman Islands alone. This figure is most likely much higher, however, the wealthy and large corporations intentionally make this figure difficult to determine. This money is not available to recirculate in the economy, nor is it subject to U.S. taxes. The net effect of this is; the money will not generate new jobs, to produce goods, to satisfy additional demand, created by a larger base of purchasers, which would in turn, generate additional revenue to fuel the government. The Republican approach will not work, even during very strong economic times (deficit spending will merely decrease). The tax base must be expanded and the distribution of tax liability must become more equitable. The purchasing base must also be expanded. The net effect would be more money in more hands capable of creating more demand and generating more jobs.
Americans discuss 'the very wealthy' and 'corporations' as if they are separate entities. They are not, and this fact must be made crystal clear. The very-wealthy in the U.S. ARE the corporations. The wealthiest 10 percent of Americans own roughly 85 percent of all outstanding stocks, roughly 85 percent of all financial securities, own 90 percent of all business equity and earn 50% of all income generated in the U.S. The wealthy and the large corporations are one in the same.
American corporations are currently 'holding' roughly 2 trillion dollars in cash reserves. This $2 trillion is not being 'reinvested' in the U.S. to create jobs for middle-class Americans. Instead, the new emphasis has become giving large corporations massive tax breaks. In reality, the wealthy have merely devised a 'new' indirect method to continue the ever increasing flow of money to themselves by giving large corporations the tax cuts, thereby capturing these funds in a round about way. Republican leadership on the state level are now drastically cutting programs for less advantaged citizens and allocating this money instead to large corporation tax cuts. Decreasing taxes for large corporations will have the same result as reducing taxes for the very wealthy and this would mean........less money, in less hands, in circulation to fuel and expand the economy.
The current 14 trillion dollar national debt is a direct product of continuous unfunded and irresponsible tax cuts (mostly for the very wealthy) by Republican leadership in Washington for the past 30 years. Please do not destroy programs that protect and enhance the lives of million of Americans on a daily basis, for a 'short term' perceived political gain. Please do not balance the budget and pay down the national debt on the backs of the middle-class, the poor and the most vulnerable members of our society. Wall Street's excessive gambling and large corporations shipping millions of jobs overseas while cutting their own tax liability to astoundingly low levels has caused this economic crisis and they should therefore, pay their fair share in placing the U.S. Back on sound economic footing.
An alternate strategy could be; totally revise the tax codes and eliminate corporate welfare (subsidies), loop-holes and completely revise tax structures that would be more balanced and discourage shipping American jobs overseas (structure tax laws to retain and expand job creation in the U.S.). Additionally, the U.S. Spends more on the defense budget and the current wars than all the other countries on the planet spend on their defense budgets combined. The U.S. Military Industrial Complex would be an ideal source for very large budget reductions. Last, but certainly not least, the very wealthy, large corporations and Wall Street should pay higher taxes.
The very wealthy argue they are paying 'what the government requires'. Unfortunately, these same wealthy Americans are the ones that have paid billions of dollars to Washington lobbyists over the past three decades to ensure this is 'what' the government requires. The countries economy should be rebuilt and expanded from the 'bottom up' (larger base) and not from the failed approach of the 'top down'. The total elimination of all the Bush 2001 and 2003 tax cuts will be a good start in setting the U.S. on sound economic ground and will begin to close the tremendous inequality of tax rates in America.