The Tax-Cut Con by Paul Krugman

[mcerise]

I found this article online while I was doing my homework, and I thought I should share it with DU. It's a great article on issues regarding optimal tax policy. The sections and some excerpts include:

1. The Cartoon and the Reality

"Bruce Tinsley's comic strip, ''Mallard Fillmore,'' is, he says, ''for the average person out there: the forgotten American taxpayer who's sick of the liberal media.'' In June, that forgotten taxpayer made an appearance in the strip, attacking his TV set with a baseball bat and yelling: ''I can't afford to send my kids to college, or even take 'em out of their substandard public school, because the federal, state and local governments take more than 50 percent of my income in taxes. And then the guy on the news asks with a straight face whether or not we can 'afford' tax cuts.''"

2. How High Are Our Taxes?

"So here's the picture: Americans pay low taxes by international standards. Most people's taxes haven't gone up in the past generation; the wealthy have had their taxes cut to levels not seen since before the New Deal. Even before the latest round of tax cuts, when compared with citizens of other advanced nations or compared with Americans a generation ago, we had nothing to complain about -- and those with high incomes now have a lot to celebrate. Yet a significant number of Americans rage against taxes, and the party that controls all three branches of the federal government has made tax cuts its supreme priority. Why?"

3. Supply-Siders, Starve-the-Beasters and Lucky Duckies

"Supply-side economics is a feel-good cover story for a political movement with a much harder-nosed agenda."

4. From Reaganomics to Clintonomics

"Tax-cut advocates had claimed the Reagan years as proof of their doctrine's correctness; as we have seen, those claims wilt under close examination. But the Clinton years posed a much greater challenge: here was a president who sharply raised the marginal tax rate on high-income taxpayers, the very rate that the tax-cut movement cares most about. And instead of presiding over an economic disaster, he presided over an economic miracle. "


5. Second Wind: The Bush Tax Cuts

"The reality is that the core measures of both the 2001 and 2003 tax cuts mainly benefit the very affluent. The centerpieces of the 2001 act were a reduction in the top income-tax rate and elimination of the estate tax -- the first, by definition, benefiting only people with high incomes; the second benefiting only heirs to large estates. The core of the 2003 tax cut was a reduction in the tax rate on dividend income. This benefit, too, is concentrated on very high-income families."

6. A Planned Crisis

"Here's the basic fact: partly, though not entirely, as a result of the tax cuts of the last three years, the government of the United States faces a fundamental fiscal shortfall. That is, the revenue it collects falls well short of the sums it needs to pay for existing programs. Even the U.S. government must, eventually, pay its bills, so something will have to give."

http://www.faireconomy.org/econ/taxes/KrugmanTaxCutCon.html

[NEOBuckeye]

1. Krugman is dead on. I recommend that everyone read this.

Massive federal deficits are just one of the major problems that we will face in the not too far off future because selfish bastards like Grover Norquist have been able to pursue their agendas without legitimate opposition from the Left-wing.

A lot of the Baby Boomers who were fool enough to vote for Bush are really going to be sorry when they start drawing their Social Security checks, expecting something to actually be there for them.