Should Democrats Embrace the TAX CUT?

[liberalpragmatist]

Okay. Actually, I don't think we should embrace the tax cut.

However, this is an interesting argument from the NYT Magazine:

http://www.nytimes.com/2004/11/21/magazine/21WWLN.html

One of the most striking differences among states is in their levels of wealth. Liberals tend to live in more economically productive states than conservatives. The top five states in per capita personal income (Connecticut, New Jersey, Massachusetts, Maryland and New York) all went to Kerry; the bottom five (Utah, New Mexico, West Virginia, Arkansas and Mississippi) all went to Bush. Since the blue states are generally richer than the red states, they must bear a greater portion of the federal tax burden. Most of them pay more to Washington than they receive, whereas most of the red states receive more than they pay. Some liberals in blue states must wonder exactly what they get in return for subsidizing the heartlanders, who are said to resent them.

According to a recent Brookings Institution analysis, as much as two-thirds of the benefits from the income tax cuts he pushed through in his first term go to taxpayers making more than $100,000 a year. These well-off Americans tend to be concentrated around New York City, Boston, Seattle, San Francisco and other liberal enclaves. By contrast, relatively few of the benefits from the Bush tax cuts go to the Southern and Prairie states, where low-income working families with children are more the norm. At present, the Bush tax cuts are scheduled to expire by 2010. If the president succeeds in making them permanent, as he has vowed to do, it will mean lasting relief for the blue states. The money they had been sending to the red states could then be spent locally, according to their own liberal values -- say, on public schools (where they already spend more per pupil than the red states) or stem-cell research.

The more conservatives succeed in reducing the size and scope of the federal government, the more fiscal freedom the blue states will have to pursue their own idea of a just society. There are already signs that this is happening. Senators like Christopher J. Dodd of Connecticut, Jon Corzine of New Jersey and Charles E. Schumer of New York are rumored to be contemplating gubernatorial runs in their respective states, convinced that there is now more to do in the governor's mansion than on Capitol Hill.

[DireStrike]

1. It's not "lasting relief for the blue states"

It's a soothing balm to the rich republican corporate pillagers who live here.

HOW the FUCK does he think money given to PRIVATE INDIVIDUALS could be used to help a state?

And Schumer has already said he won't run...

What a confusingly written, thoughtless, misleading article. No offense to the gy who posted it.

[Warpy]

2. This bozo is making the classic GOP/neoclassical economics mistake

of thinking that rich people 1) spend every dime they get in tax relief or 2) invest in companies than hand out new jobs in the spirit of welfare for the working class.

Money given to the rich stays there. They may invest in stocks, which drives up the Dow. They may spend the windfall on fine art, fine wines, or antiques, items which are already shuffled from one fat cat to the next via auction houses like Sotheby's. Their contribution to the larger economy of goods and services remains pretty static.

Money lavished on the rich gives no one any releif, and certainly not the states in which they reside. Lowering their federal taxes also lowers their state taxes in most cases, as states with income taxes generally tie it to the federal tax rate.

In other words, this guy is a lying sack of shit who has fallen for the biggest economic scam in history, and a pox on anyone who takes his bullshit seriously.

[madrchsod]

3. you forgot the new trick

life insurance policies in the tens of millions of dollars for their heirs...nice tax relief for the ruling class