Bush Radio Nonsense About The Economy and Taxes Rebutted

Bush in his radio address today:



Not so fast Bush. The Center on Budget and Policy Priorities rebutted this line of crap yesterday:



As for the deficit nonsense, CBPP says:



The entire report is here on their site: http://www.cbpp.org/policy-points1-6-06.htm

I have ever seen.

In either case, they want you to get a big tax hike. If we allow that to happen, a family of four making $50,000 would see their federal income taxes go up by nearly 50 percent.

I haven't heard of a single family of four with an income of $50,000 who is paying 50% less in taxes than before the bush tax cuts. His statement would only be true, were this the case.

From the DNC:

"Average household income for working families when adjusted for inflation was $46,058 in 2000 and has declined to $44,389 today. At the same time Americans have seen their real wages decline, the productivity of the American worker is up 13.5 percent. Americans have worked harder -- and better -- over the past five years and received none of the benefits for their hard work. (Census Bureau; Bureau of Labor Statistics)

And hopefully they will be on the outside looking in very soon.

Except for those in prison, who will be on the inside looking out.

statements. They are stealing hand over fist.

Thanks for providing some of the debunking.
This fools off his rocker. What about the surplus dubby?
What the f*ck kind of goal is halving the deficit anyway? Get rid of the deficit and start paying the debt fruitcake!

He's talking up the economy because it is the ONLY thing in the past 13 months that has received a positive reaction (even if it was from Bush Friendly hacks) from government reports and "the Press". He wants to put the attention on something "good" he has done rather than let the focus slip back on the Abramoff Scandal and the NSA wire tapping. Its the same thing he tried to do last week with the Coal Miner story, and just like last week, this will swing the spotlight back on the incompetence of this Administration. :eyes:

on the news, dubby has nowhere to turn but remind the tax evaders of their big 20$ tax cut.
If he only had a brain, he would end the tax cuts to the rich and do something of value for all Americans.
I can't even stand to think about this smirking fool who has always had it made his whole life. He hasn't a clue running his own life and especially not in charge of all of ours.
:rant:

Inflation-adjusted hourly and weekly wages are below Nov 2001 wages.

Median household income (inflation adjusted) has fallen five years in a row and was 4% lower in 2004 than in 1999.

US Household indebtedness has risen 35.7% in the last four years.

The level of debt to after-tax income for US households is 115%. Twice what it was 30 years ago.

Personal savings rate is negative for the first time since WWII.

More than 3 million manufacturing jobs have been lost since Jan 2000.

Poverty rate rose from 11.3% in 2000 to 12.7% in 2004. The US has 5.4 million more people living in poverty today than in 2000.

http://www.epi.org/content.cfm/pm110

So keep up those rich-men tax cuts, it sure is trickling down all over the poor and middle class.

exaggeration or spin?

...masking the damaged caused by tax cuts for his "base" with a "fair and simple National Sales ("Fair") Tax. Fortunately, the one-two punch of Katrina and the CIA Leak case pretty much dried up Junior's "political capital" and his ability to push THIS turkey through:

From Bruce Bartlett:

"You know, I'm not exactly sure how big the national sales tax is going to have to be, but it's the kind of interesting idea that we ought to explore seriously," Bush said, according to a Reuters report.

August 09, 2004, 8:47 a.m.

A National Sales Tax No Vote: The rates would be vastly higher than what you might suspect.

House Speaker Dennis Hastert created a flurry of excitement in Republican circles the other day when it was reported that he is proposing the abolition of the Internal Revenue Service in his new book. This would be accomplished by eliminating all existing federal taxes and replacing them with a national retail sales tax. There is no indication of what tax rate Speaker Hastert thinks would be necessary to replace all federal revenue. A current proposal by Rep. John Linder (R., Ga.) says that a 23 percent rate would be adequate. But such a low rate can only be sustained by making completely absurd assumptions about what would be taxed. Every serious economist who has ever looked at this question has concluded that a vastly higher rate would in fact be needed.

An unstated assumption is that the 23 percent rate proposed by Linder is comparable to existing state and local sales taxes, where the tax comes on top of the purchase price. Thus, a 5 percent sales tax on a $1 purchase comes to $1.05. But that’s not the way the Linder plan works. He deceptively calculates the rate as if the tax is part of the purchase price. He calls this the tax-inclusive rate. Calculating the rate the normal way people are accustomed to with state and local sales taxes would require a 30 percent tax rate, not 23 percent. When Congress’s Joint Committee on Taxation scored the Linder proposal four years ago it estimated that it would actually require a tax-inclusive rate of 36 percent, not 23 percent, to equal current federal revenues. Calculating the rate in a normal, tax-exclusive manner would mean a 57 percent rate.

Economist Bill Gale of the Brookings Institution notes that supporters of the sales tax assume that there will be no tax evasion under their proposal and that the size of government will not grow, even though they would send a large annual check to every American in order to offset the regressivity of the tax. Making realistic assumptions, Gale estimates that the tax-inclusive rate, comparable to Linder’s proposed 23 percent rate, would actually have to be about 50 percent. A rate comparable to existing sales taxes would be close to 100 percent. And let us not forget that state and local sales taxes would come on top of the federal sales tax, pushing the total rate even higher. Obviously, the federal government is not going to impose tax rates this high, nor would anyone pay them if it did. There would be a massive tax revolt.

From Nancy Pelosi:

http://democraticleader.house.gov/press/releases.cfm?pressReleaseID=701

FOR IMMEDIATE RELEASE
September 23, 2004

Pelosi: ‘National Sales Tax Would be Burden for Middle Class Americans, But Boon for the Wealthy’

Washington, D.C. -- House Democratic Leader Nancy Pelosi held a news conference in the Capitol this afternoon with Congressmen Charles Rangel of New York, and John Spratt and James Clyburn, both of South Carolina, to denounce a Republican plan for a national sales tax. Below are Pelosi’s remarks and a fact sheet about the proposal:

“Today, we are here to highlight one of the many clear contrasts between Democrats and Republicans: Republicans want to undermine our American values of prosperity and fairness with a new national sales tax of at least 30 percent and as high as 50 percent or more on all goods, including homes and cars.

“A national sales tax would be a burden for middle class Americans, but a boon for the wealthy. Families with children would lose their current tax deductions, and seniors would essentially be taxed twice.

“This proposal is ludicrous and should be dismissed outright. Yet Speaker Hastert wrote about the national sales tax and the flat tax in his new book, saying ‘both of these ideas are worthy of consideration.’ And Majority Leader Tom DeLay is co-sponsoring the bill, and has said: ‘It is high time the debate about the flat tax and a national consumption tax moved out of Washington think tanks and into American living rooms. That's why I have signedon to Congressman John Linder's proposal to scrap the current tax code altogether and replace it with a national sales tax.’

“The Republican plan would make it harder for middleclass families to make ends meet. A national sales tax would undermine the American value of prosperity. For example, cars that cost $20,000 would cost an additional $6,000 under this proposal. Just wait until the car dealers hear about this proposal. Prescription drugs that cost $100 would now cost $130. New homes, insurance premiums, brokerage fees, and gasoline would all be heavily taxed to replace revenue brought in by the current tax system.

“It would wipe out our system of progressive taxation. A national sales tax would undermine the American value of fairness.

“The American people should be aware that the Republicans’ primary tax agenda is a new national sales tax.”

The Republican Plan to Raise Taxes on the Middle Class

All over the country, middle class Americans are being squeezed byRepublican policies that have lost 1.7 million private sector jobs; allowed the price of health care, education, and gas to skyrocket; and created record deficits. Now Republicans are proposing a new national sales tax that would increase taxes for the typical middle class by about 50 percent. Democrats know that approach is wrong. Instead of raising taxes on the middle class, Democrats have pledged to promote prosperity and fairness by enacting middle class tax relief, creating new jobs, and eliminating tax loopholes so all Americans pay their fair share.

GOP SALES TAX HIKES A FAMILY’S TAX BURDEN BY 50 PERCENT

The new GOP national sales tax would replace all personal and corporate income taxes, Social Security, Medicare, and payroll taxes, and gift and estate taxes with a new national sales tax on goods like groceries, clothing, new home sales and apartment rents, and health care services. This new GOP tax would be applied on top of existing state sales taxes. This proposal would increase taxes by about $3,200 a year for 80 percent of taxpayers, and potentially more for some families.

MIDDLE CLASS FAMILIES SQUEEZED AGAIN

Families with children. Families with children are hit the hardest, as this proposal would eliminate all the current law tax benefits for these families, including the child tax credit. A middle class family with four children with a combined income of $65,000 would face an increase of more than $5,000 in their tax liability.

New homeowners. The Republican tax hike proposal would eliminate the tax deduction that families get on their home mortgages and apply this new sales percent tax to the cost of a home. If a family buys a new house listed for $150,000, the new tax brings the actual purchase price to $195,000.

Jump in property taxes. The Republican sales tax hike would require states to send an additional $300 billion to the federal government in sales taxes – a tax increase that states would immediately pass on to residents. Arkansas, Delaware, Kentucky, Hawaii, and New Jersey could all see property tax increases higher than 400 percent. The lowest state property tax hike possible – in New Hampshire – would still be more than 70 percent.

Gas and electricity. The average family would pay an additional 60 cents a gallon for gasoline – a new tax that will hit families in rural areas particularly hard. Families with large home heating or cooling bills also will be harmed.

SENIORS FACE NEW TAXES

Beneficiaries pay twice for Social Security and pension benefits. Most Social Security benefits and a portion of pension payments are exempt from income tax. But this proposal requires seniors to pay the new sales tax – meaning that seniors are now being taxed twice for their Social Security, once when they pay the payroll taxes and again when they pay the sales taxes.

Threaten Solvency of the Medicare Trust Fund. Medicare would be required to pay the new sales tax as well, forcing the program into insolvency in five years. If this proposal were enacted, Medicare would run out of funds in 2009.

Undermines pension coverage. The new GOP sales tax hike would reduce the incentives employers currently get for offering their employees a pension plan. The American Academy of Actuaries has concluded that “pension plans would quickly diminish in number and size and gradually disappear” if a consumption tax, such as the national sales tax were enacted as a substitute to the current income tax.

From The National Retail Federation:

http://www.nrf.com/content/default.asp?folder=press/release2005&file=NRST-comments.htm&bhfv=2&bhqs=1

Retailers File Comments Urging Rejection of Consumption Tax

WASHINGTON, D.C., June 13, 2005 - The National Retail Federation today announced that it has filed comments with the President's Advisory Panel on Federal Tax Reform urging the panel to reject economically risky proposals to replace the nation's income tax system with a consumption tax or to add a new consumption tax on top of existing taxes.

"The United States should not experiment with a brand new tax system that will put our economic future at risk," NRF said. "It is better to engage in substantial reforms of the income tax that are designed to eliminate some of the major complications in the current Internal Revenue Code and stimulate economic growth without causing major economic dislocation."

NRF's remarks came in response to proposals for tax reform that were presented to the Advisory Panel during a series of hearings this spring. The panel asked for public comments on the proposals last month.

NRF on Friday submitted a detailed statement outlining the dangers of various consumption tax proposals. The statement addressed the National Retail Sales Tax proposed by Representative John Linder, R-Va., plans for a Value Added Tax similar to those used in Europe, and other consumption tax proposals.

The NRF statement cited a study commissioned by NRF in 2000 that found that a national sales tax would bring a three-year decline in the economy, a four-year decline in employment and an eight-year decline in consumer spending. The study showed that similar results could be expected if other types of consumption taxes were enacted to replace the current system.

NRF argued that consumption taxes are inherently regressive because low-income families spend virtually their entire incomes while wealthier families have larger percentages of unspent income that would go untaxed.

NRF particularly urged the Advisory Panel to reject proposals to maintain the current tax system while adding a VAT or other new tax that would be used to pay for programs such as Social Security or health care. Doing so would amount to a tax increase rather than tax reform and would provide lawmakers with "a money machine" to finance increases in government spending, NRF said.

From Roth & Co:

http://www.rothcpa.com/archives/cat_tax_reform.php

June 02, 2005
I DON'T THINK HE LIKES THE 'FAIR' TAX

The "Fair Tax," a proposal for a national retail sales tax, has gotten some attention in the tax reform debate. Joseph Thorndike, a columnist for Tax Analysts, isn't quite sold on it:

First, though, we have to sort through an embarrassment of riches: How can we identify the worst quality of a tax that has so many? As numerous critics have pointed out, the Fair Tax would raise too little revenue and prompt too much evasion. Its popularity depends on unreasonable assumptions and misleading descriptions. It would never work as advertised -- a fact that many of its supporters either choose to ignore or secretly celebrate.

But other than that, maybe he likes it.

WHAT IS THE REAL RATE?

Mr. Thorndike points out that the 23% rate touted by Fair Tax supporters is misleading, because it is a "tax inclusive" rate. The 6% tax rate we Polk Countians are accustomed to is "tax exclusive" - it isn't included in the sales tax rate.

Example:

Wally buys a new computer for $1,000, and he pays $60 in sales tax. His "tax exclusive" rate is 6%. His "tax inclusive rate" is 5.66% (60/1060 = 5.66%).

If you compute the "Fair Tax" the way we are used to talking about sales tax rates - tax exclusive - it will apply at a 30% rate. That's a real difference.

Perhaps we are biased, being income tax consultants, but the Fair Tax seems to have some huge practical problems. Two come immediately to mind.

WHEN RATES GET TOO HIGH, PEOPLE CHEAT

Sales taxes are only likely to work if rates are low enough to not interfere with commerce. When combined with state and local taxes, the Fair Tax would burden every trip to Git 'n Go with a 36% or higher surcharge. This is high enough to push many transactions into the E-bay economy.

HIGH SALES TAX RATES THREATEN BUSINESSES THAT COLLECT SALES TAXES

Taxpayers going through their first sales tax audit are astounded at how big the assessments can be. They also know that they aren't as simple as many folks believe. While income taxes are only a problem to the extent your business is profitable, sales taxes apply even when you are losing money, and they apply based on gross receipts - a much larger base than taxable income.

Because sales taxes are computed on a big base, a small error in determining what transactions are subject to tax can lead to a stiff assessment over three years, even at a "low" 6% rate. At a 36% rate, even little errors would be ruinous.

FAIR TAX PROSPECTS?

Mr. Thorndike doesn't think the Fair Tax will survive the tax reform process:

And the winner of this year's prize for Worst Idea in a Serious Public Policy Debate: the Fair Tax. In all likelihood, this plan for a national retail sales tax has already exhausted its 15 minutes of fame. Sometime later this summer, President Bush's commission on federal tax reform will probably put it out of its misery.

that's the stuff

Here's the truth about Bush's trickle-down results (reproduced with permission from myself):

3.9% unemployment rate when he took office, 5.2% now. So much for the argument that tax cuts to our employers tricke down.

It's already an excellent resource for those of us who try to keep up on the truth about repuke economics, and I'll bet we see more valuable contributions.

And what about the stock market? Repukes will tell you how great it's doing now, but according to the major indices it is about where it was when Bush took office five years ago!

it is echoed by Rush and Hannity with hardly any rebuttal.

Thank God for DU.

It occurred to me while I was listening to the latest jobs report on NPR on Friday, and Bush or some political hack was quoted as saying that the economy is "rebounding," it occurred to me that I have been hearing the same schtick since 2001.

Here's my reality: I am a college-educated, single female with no dependents (except for my kitties, but I can't claim them on my taxes) working in a fairly stable industry. I am working two jobs (salaried with benefits, plus freelance) to make ends meet (and still ran short in December because of the holidays), my property taxes increased about 40% since last year (in the interest of fairness, I bought a modest 1-bedroom conversion condo--the increase was partially based on assessed value adjustment), condo assessments have gone up 20% to compensate for higher heating costs, my co-pays and health insurance premiums--although I am grateful to HAVE health insurance--increased Jan. 1. I pay more for gas, groceries ($4 for a gallon of milk?!), and personal hygiene products, I live extremely modestly--no cell phone, no cable or satellite TV, entertainment expenses consist of my DSL service, Netflix, occasional book purchases, 1 magazine subscription, and very occasional dining out and movies (less than 10 times a year). That's my micro perspective--and it's far from "robust."

On the macro level, the federal defecit continues to grow (and now there's rumblings of attacking Iran?!), huge trade imbalances, China owns more than 40% of U.S. debt, health care costs continue to grow out of control, continued budget cuts to help the poor and tax benefits to help the rich--how can there be a 4.9% national unemployment rate (I KNOW those numbers are skewed in favor of the admin.) when it's over 40% among young black men?!

I'm beginning to pay more attention to the threads here on DU re: perception management, 'cause what I keep hearing from MSM does not even come CLOSE to representing what I see in my daily life. For instance, here in Chicago a friend of mine--married with 3 kids, both parents work--had to sell their home and move into a rental because property taxes became too much to bear. And I know that local taxes keep increasing becuase federal dollars have dried up for just about everything: public transportation, roads and bridges and various public infrastructure, education--states are going bankrupt while trying to plug those holes. And all the while, the defecit that my niece and nephews' grandchildren will be paying for continues to grow.

MAKE IT STOP!!!

I meant to say budget cuts to PROGRAMS that help poor people. sorry for the gaffe.