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Feb 22, 2008

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Bob Robinson

I'm trying to understand your logic. I really am. I understand that the wealthy will receive tax cuts when we give tax cuts, because the rich pay the most taxes. But your numbers rub against what I understand are the facts: 97% of the benefits of the Bush tax cuts go to the richest 4 percent of households with incomes over $200,000 a year; 54% go to households with annual incomes of more than $1 million.
As Ron Sider asks, "Do evangelical Christians really want to support tax cuts for millionaires paid for by cuts in food stamps, healthcare, housing vouchers, and nutritional programs for poor Americans? Is that the meaning of compassionate conservatism?"

Michael W. Kruse

Bob, here is how I frame it. What do the wealthy do with the increased money they retain because of tax cuts? They invest it by buying stocks and putting money on loan, thus making available capital and creating incentives for people to start and expand businesses, thus creating more jobs, thus creating more revenue to tax, thus bringing in more tax dollars for government funding. Keep in mind that rather than being Britney Spears or Tiger Woods far far more of those paying the top taxes are small business owners trying to grow their business. Also keep in mind that this is not right-wing ideology as evidenced by the actions of JFK. If folks want to be critical of presidents who cut taxes, then the point of my post is to be sure to include JFK in that list.

I think we can agree that zero taxes are not workable. Also, that a top marginal tax rate of 100% kills all incentive to invest and expand beyond that level. So what is the optimal balance? That is a legitimately debatable question.

The federal provisions for the poor were drastically less in 1962 than in this decade. Was JFK immoral for cutting taxes when there was so little federal provision for the poor? Is it never appropriate to cut taxes as an economic incentive? These are my questions. It can always and forever by argued that taxes can’t be cut because there is always something else that must be funded.

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