Please Quit Calling it a Tax Cut

The Bush tax rates were put in effect in 2001.

…and yet the government and most politicians are calling the current efforts to extend those rates and provisions tax cuts.

The “cuts” happened in 2001. Nine years went by. Anything other than extending these rates is a tax hike. Got it?

It would be different if it had been a few months or a couple years but I think it is fair and reasonable to say that rates in effect for nine years have become the de facto norm. The fact that they had an expiration date doesn’t change that for anyone that actually pays taxes – which is only about 53% of us these days, last I heard.

Senate leaders released an agreement crafted by the White House and Republicans to sustain Bush-era tax rates through 2012, set the estate tax at the lowest rate in 80 years, extend jobless aid and cut payroll taxes by 2 percentage points.

The legislation would add $857 billion to the federal debt over 10 years, government analysts said.

Another semantic error there folks. This legislation will not add anything to the federal debt. Federal spending above current revenue is what will add to the federal debt. Out-of-control spending. Wasteful spending. Spending tagged with the misnomer “investment” or “stimulus.”

No doubt, calculations of the billions that will be added to the federal debt are erroneously, arrogantly based on the premise that the revenue resulting from a future tax hike has already been spent.

Don’t even think about trying to tell us what this is going to “cost” the government. The extension will not “cost” the government anything. More and more Americans are waking up and and telling the federal government that it was not the government’s money in the first place.

A two-year extension of those rates would cost $407.6 billion, according to the Joint Committee on Taxation.

Listen, no one in the next five years, let alone the next two should be considering rasing taxes for anyone.

While short term fiscal and monetary policy that serves to increase liquidity is widely considered a good strategy, lowering taxes is the only proven strategy, in the long run, to stimulate growth. Continuing to flood our system with worthless dollars will not incent employers to hire any more than the last trillion – only lowering expenses and stabilizing the outlook on taxes for the long run will give employers the confidence to hire again. The continued efforts on the part of the fed to further reduce the value of the dollar via “quantitative easing” is politically motivated and will have no effect on unemployment.

You can be sure of one thing. The only reason Barack Obama and his rejected liberal posse are going along with anything resembling what they  deem a “tax cut” for taxpayers earning more than $250K is that they have no politically palatable options to do otherwise.

Elections do matter.

26 thoughts on “Please Quit Calling it a Tax Cut

  1. I think you can be sure of three things:

    1)The people in politics and the media who claimed the recipients of the 2001 tax cuts were “the rich” will never be called out on their lie. As I’ve written here in the comments several times, it was easy, from 2001-2008, to find liberals who claimed that the Bush deficits were caused by the Bush tax cuts, but it was literally impossible to find a liberal who knew how much the tax cuts “cost” the treasury or what percentage of the cuts went to which income quintile. It was like they had a dead spot in their brains when it came to FACTS!!

    2)The reason tax cuts work is because the private sector produces value. It takes ninety cents and turns it into a buck. Despite collectivist dreams of “green jobs” and the wonderful efficiency of a command economy, the quickest way to turn a buck into fifty cents is to give it to a politician. Government is a destroyer of wealth; the reason that we have government is because people need to be forced to spend a dollar to get back fifty cents, they won’t do it if they don’t have to.

    3)To paraphrase the savvy Mr. Roosh, Obama’s bag of tricks is empty.

  2. Perhaps we ought to at least simplify the tax code at this point. That’s at least as much a small government position as tax reductions since it gets government out of social engineering with the various deductions, credits, etc. Just think of all the tax lawyers that would suddenly become redundant!

  3. Well these are the same geniuses who think uncollected, unearned revenue “costs” the government money.

  4. JR:
    “Federal spending above current revenue is what will add to the federal debt.” Exactly. Extending the Bush rates will reduce revenue compared to letting rates return to where they were. That increases the deficit. If you want to propose spending cuts to pay for them go ahead.

  5. Whenever I hear some stinking lefty describe tax cuts as “gifts to the rich” I swear I have to fight to restrain myself from delivering an atomic wedgie…or something.

  6. Extending the Bush rates will reduce revenue compared to letting rates return to where they were.

    It’s been nine years. Get over it.

    That increases the deficit. If you want to propose spending cuts to pay for them go ahead.

    It’s clear that’s what most of America wants. Presumably you are in the liberal minority.

  7. No, Rick, you don’t “pay for” tax cuts. That perpetuates the wrong way of thinking of my money as belonging to the government. But semantics aside:

    Repeal Obamacare
    Privatize the Tennessee Valley Authority
    End the mohair subsidy
    Sell the helium reserve
    Bankrupt Chrysler, GM, Fannie Mae and Freddie Mac
    Means test Social Security
    End federal student loans
    Withdraw from the United Nations and kick them offshore
    Stop paying bribes to Arabs to leave Israel alone
    Hell, stop all foreign aid of every kind to everyone
    Defund the National Endowment for the Arts
    Defund the Corporation for Public Broadcasting
    Defund the National Humanities whatever they are
    Implement the base closing commission recommendations
    fire every airport screener, turn back security to the airlines
    privatize the post office

    shall I continue?

  8. If you want to propose spending cuts to pay for them go ahead

    By your leave.

    Hey, speaking of which – long time no see! How ’bout that legislature!

  9. Aaarrrrgh! You don’t “pay” for tax cuts. It’s just this type of moronic economic illiteracy that has fueled the problems we have now.
    Rick, go to your corner.

  10. Everything Nate said, plus:
    Abolish the Departments of Education, Energy and Homeland Security.
    Decriminalize marijuana
    Privatize HUD public housing (to the extent that it hasn’t been already)

  11. “If you want to propose spending cuts to pay for them go ahead”

    Propose my ass! Hell or high water cuts better get done, big-time, and in a big way!!!

    Hey Ricky, Remember this little nicety from your boy Cy Thao: “When you guys win, you get to keep your money. When we win, we take your money.”

    News Flash Ricky, YOUR TEAM DIDN’T WIN. THE TAKING IS OVER!!!!!!!!!!!!!!!!

  12. Aggressively Develop our petroleum reserves.
    Either that or pull another trillion dollars a year from the pockets of working Americans.

  13. No more subsidies for public transit…..including AMTRAK and the funding of airport screeners from other tax revenues. No more funds for the BATFE……cut EPA funding for control of carbon emissions……

  14. Let me also add this point in simple language for our liberal Democrat friends:
    The problem with our budgeting is we assume revenues. Government spends money it has not collected.
    This is irresponsible, and if you are a private citizen, reckless and/or illegal.

    THAT is the main problem America and most of the 50 states has.

  15. J.R.
    “It’s been nine years. Get over it” What is to get over? It is math.

    “It’s clear that’s what most of America wants.” Really here is Eric Paulsen running against cutting Medicare.
    http://www.youtube.com/watch?v=QnWuIoVofj4&feature=channel
    In fact I would bet every Republican ran an add attacking Obama’s Medicare cuts and seniors were the biggest GOP voters.

    Nate:
    “Repeal Obamacare”
    That adds $138 Billion or so to the deficit in the next 10 years. You are going in the wrong direction.
    “Privatize the Tennessee Valley Authority”
    It operates at a profit. $726 million last fiscal year.
    “End the mohair subsidy”
    OK like $20 million a year.
    “Sell the helium reserve”
    Feds have been selling it off for several years now. Selling faster would probably just crash the price.
    “Bankrupt Chrysler, GM, Fannie Mae and Freddie Mac”
    How does that generate revenue?
    “Means test Social Security”
    Good luck with that. I am sure I could get DFL donors to pay for the commercials for any GOP candidate who wants to run on that.
    “End federal student loans”
    Loans are repaid.
    “Withdraw from the United Nations and kick them offshore”
    Well until last year we had not given them anything since 1999. Total spening is somthing like $1.697 billion, so it wont save you much.
    “Stop paying bribes to Arabs to leave Israel alone
    Hell, stop all foreign aid of every kind to everyone”
    OK. In fact get rid of all of it. Saves 22.5 billion a year or .06% of the budget. Of course Sarah Palin won’t like you taking away Israel’s goodies.
    “Defund the National Endowment for the Arts” $155 million a year
    “Defund the Corporation for Public Broadcasting” $422 million a years
    “Defund the National Humanities whatever they are” $167 Million

    “Implement the base closing commission recommendations”
    Will be done by Sept. 15, 2011.
    “fire every airport screener, turn back security to the airlines”
    OK $9 Billion
    “privatize the post office”
    At best it saves you $8 billion a year.

    So in total, leaving out Social Security, you saved maybe $30Billion a year. Extending the Bush Tax cuts costs $200 Billion a year.

  16. Kermit:
    “The problem with our budgeting is we assume revenues.”
    By deffinition a budget assumes certain incomes and certain expenditures. How else would you budget?

    “Government spends money it has not collected.”
    Huh. What a you talking about?
    This is irresponsible, and if you are a private citizen, reckless and/or illegal.
    What is illegal or reckless about taking out a loan. That is how any business operates. Do you have a mortgage or a credit card?

  17. Scott:
    “News Flash Ricky, YOUR TEAM DIDN’T WIN. THE TAKING IS OVER”

    News Flash Scott, Your team won and they are taking money out of your pocket to give to rich people. Good job sucker.

  18. Had on WCCO radio on the way home tonight. CBS 5 PM news. They said the “tax cuts for the rich need to be paid for with borrowed money from the Chinese”.

    Get it. It’s not higher income/productive people. It’s “the rich”
    It’s not a tax increase, it’s “tax cuts”.
    It’s not spending, but the lack of said tax increase.

    So when congress spent $6,000,000,000 on two bills passed this week, how come we don’t hear how those are paid for by borrowing from the Chinese?

  19. Rick, the Democrats are taking money out of my pocket to give to gov’t employees in DC to do useless work.

  20. RickDFL, I am in grad school right now. Give me $12,000 (my expenses for this spring). If not, I need to pay for your $12,000 tax cut by borrowing money.

  21. What is illegal or reckless about taking out a loan.
    If I put it in my unborn grandchild’s name it is fraud. Get an effing clue, Rick. If you’re capable.

  22. News Flash Scott, Your team won and they are taking money out of your pocket to give to rich people

    Again, Rick – taxes don’t belong to the government until it takes them. Not one minute before.

    A tax cut is not a government gift.

    But then, if you got the basic morality of it all, you’d be “RickGOP”

  23. Your team won and they are taking money out of your pocket to give to rich people. Good job sucker.

    Person who does not know what a ratio is is giving economy lessons. Very rich, RatioRinkyDinkDFL.

  24. It was democrats like RickDFL who said the 2001 Bush tax cuts went to the rich. Just this week the administration said that letting them expire would cost the average American family $3,000/year.
    It was also RickDFL who wanted a unilateral withdrawal from Iraq because we had already lost. It was also RickDFL who promised me that socialized medicine would be like me getting a check in the mail for $3,000 every year.
    I think RickDFL deserves the Swedish Chef treatment:

    J.R. “It’s beee neene-a yeers. Get oofer it” Vhet is tu get oofer? It is met. “It’s cleer thet’s vhet must ooff Emereeca vunts.” Reelly here-a is Ireec Poolsee roonneeng egeeenst cootteeng Medeecere-a. http://vvv.yuootoobe-a.cum/vetch?f=QnVooIuFuffj4&feetoore-a=chunnel In fect I vuoold bet ifery Repoobleecun run un edd etteckeeng Oobema’s Medeecere-a coots und seneeurs vere-a zee beeggest GOP futers. Nete-a: “Repeel Oobemecere-a” Thet edds $138 Beelliun oor su tu zee deffeecit in zee next 10 yeers. Yuoo ere-a gueeng in zee vrung durecshun. “Preefetize-a zee Tennessee-a Felley Oothureety” It ooperetes et a pruffeet. $726 meelliun lest feescel yeer. “Ind zee muheur soobseedy” OoK leeke-a $20 meelliun a yeer. “Sell zee heleeoom reserfe-a” Feds hefe-a beee selleeng it ooffff fur seferel yeers noo. Selleeng fester vuoold prubebly joost cresh zee preece-a. “Bunkroopt Chrysler, GM, Funneee-a Mee-a und Freddeee-a Mec” Hoo dues thet generete-a refenooe-a? “Meuns test Suceeel Secooreety” Guud loock veet thet. I em soore-a I cuoold get DFL dunurs tu pey fur zee cummerceeels fur uny GOP cundeedete-a vhu vunts tu roon oon thet. “Ind federel stoodent luuns” Luuns ere-a repeeed. “Veethdrev frum zee Uneeted Neshuns und keeck zeem ooffffshure-a” Vell unteel lest yeer ve-a hed nut geefee zeem unytheeng seence-a 1999. Tutel speneeng is sumtheeng leeke-a $1.697 beelliun, su it vunt sefe-a yuoo mooch. “Stup peyeeng breebes tu Erebs tu leefe-a Isreel elune-a Hell, stup ell fureeegn eeed ooff ifery keend tu iferyune-a” OoK. In fect get reed ooff ell ooff it. Sefes 22.5 beelliun a yeer oor .06% ooff zee boodget. Ooff cuoorse-a Sereh Peleen vun’t leeke-a yuoo tekeeng evey Isreel’s guudeees. “Deffoond zee Neshunel Indooment fur zee Erts” $155 meelliun a yeer “Deffoond zee Curpureshun fur Poobleec Bruedcesteeng” $422 meelliun a yeers “Deffoond zee Neshunel Hoomuneeties vhetefer zeey ere-a” $167 Meelliun “Implement zee bese-a cluseeng cummeessiun recummendeshuns” Veell be-a dune-a by Sept. 15, 2011. “fure-a ifery eurpurt screener, toorn beck secooreety tu zee eurleenes” OoK $9 Beelliun “preefetize-a zee pust ooffffeece-a” Et best it sefes yuoo $8 beelliun a yeer. Su in tutel, leefeeng oooot Suceeel Secooreety, yuoo sefed meybe-a $30Beelliun a yeer. Ixtendeeng zee Boosh Tex coots custs $200 Beelliun a yeer. Bork Bork Bork!

  25. Rick – off-topic question.

    Why did DFLers in the Minnesota House and Senate introduce, during the 2nd Special Session, HF 6 (Clark, Davnie, Hayden, Kahn, Hausman) and SF3 (Berglin, Pappas, Moua, Dibble, Torres-Ray) sympathizing with members of the Anti-War Committee who, in turn, support Hamas, the destruction of Israel, resulting in the subsequent murder of the Jews and subjugation of non-Muslims?

    http://loyalopposition.wordpress.com/2010/10/19/what-dfl-values/

    Any explanation or defense of this action on the part of elected DFL officials?

    Disclosure: I am an Alternate Delegate to the DFL SCC from SD60.

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