Tax cut madness
To the Editor:
The tax cuts passed by the Bush administration had sunset provisions that required the cuts to expire at the end of 2010. The cuts, however, were extended for two years and are now scheduled to end at the end of 2012. Also scheduled to expire at the end of 2012 is the one-year 2 percent FICA tax cut. The FICA tax funds Social Security and Medicare.
President Barack Obama already has announced that he wants to extend the tax cuts for one more year for everyone earning less than $250,000. Republicans want to extend the cuts for everyone. Both Republicans and Democrats say that letting the tax cuts expire would hurt economic growth and job creation. But is this true? During the period the tax cuts have been in place, the debt has risen from $5.8 trillion to almost $16 trillion. The budget deficit is $1.4 trillion, job creation is anemic, and unemployment is well over 8 percent. So how can it be argued that the tax cuts have spurred economic growth in their 10 years?
There is only one proven method for reducing debt and balancing the budget and it is to increase the percentage of revenue to GDP, which is now about 17 percent to 20 percent, and reduce the percentage of spending to GDP, which is now 23 percent to 20 percent.
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