Say Anything Blog

The accepted liberal terminology for this is “letting the Bush tax cuts expire.”  But when the tax cuts expire, and we’re all stuck paying a lot more in to the government, what is that but a tax hike?

WASHINGTON (Reuters) – President Barack Obama will allow tax breaks given to wealthier Americans under his predecessor, George W. Bush, to expire as scheduled rather than eliminate them sooner, an administration official said on Saturday.

Obama, who promised during his White House campaign to roll back tax cuts on people earning more than $250,000, also plans to boost tax collections from about 16 percent of the economy this year to 19 percent in 2013, the official said, confirming a Washington Post report on Obama’s budget proposals for the 2010 fiscal year.

This is more bad news for the economy.

While liberals, and their mouthpieces in the media, consistently refer to the Bush tax cuts as being for “wealthier Americans” the truth is that after the Bush tax cuts the top income brackets ended up paying more in taxes.  Here’s a year-by-year breakdown of federal income tax revenue for the top tax bracket courtesy of the Heritage Foundation:

2003: $407
2004: $475
2005: $558
2006: $616

In fact, “the rich” are now paying a larger percentage of federal taxes than ever before.

Now, granted, “the rich” paid a smaller rate when they paid taxes.  But that lower rate resulted in more tax revenues because it inspired more economic activity.  Economic activity, I’d remind you readers, that creates jobs and prosperity at all levels of income.

Even if you try to put a silver lining on this and say that letting the Bush tax cuts expire will draw in more tax revenue to pay for the spending spree (“stimulus,” bailouts, entitlement expansions and now an “aggressive” domestic spending agenda), but even that isn’t right.  After the Bush tax cuts, federal tax revenues wen’t way up:

And federal budget deficits went down:

In fact, if Republicans (and for the last two years Democrats) had kept spending under control during that error Bush could have left office with surpluses.  But I digress.

The point is that letting the Bush tax cuts expire, and hiking taxes on our economy, is only going to depress economic activity and lead to stagnation.  And stagnation doesn’t generate a lot of tax revenue.

Obama’s economic policies, to date, are going to lead us to nothing but bigger tax bills and less economic growth.