Stimulus? Extend Marginal Tax Rate Cuts to Produce More Growth

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How will you spend your $600?

IF YOU WORK: If you paid $300.00 in income taxes you’d get $600 “REBATE”

If you’re married: $1200.00
For each child: $300.00

If you work but pay NO TAXES and make $3000.00, you get a $300.00 ‘rebate.’
Businesses will be able to get tax breaks for equipment investment.

Wall Street Journal Graphic
See that graphic from the Wall Street Journal? That shows productivity increases as shown by the Gross Domestic Product (GDP). See that big spike after 2003? That’s the Bush marginal tax decreases going into effect. Why not make those permanent? Obviously it’s not a panacea, but dropping money from planes seems a rather ineffective way to stimulate the economy.
From Investor’s Business Daily:

Some 116 million American families will get rebate checks of $600 to $1,200, along with an additional $300 per child. The 116 million families include 35 million that don’t pay taxes. So their “rebates” will really amount to one-time welfare payments.

We all like getting checks from the government. But as we’ve said, this scheme will only take money from some people and give it to others. Some of the money will be saved, some will go to pay down debt and some will be spent on imports. How is that “stimulus”?

Of the plan’s total $150 billion in cost, $50 billion will go to businesses. No, it’s not a “giveaway,” as some have styled it. Businesses will take their breaks and create new products, new jobs and more wealth for all Americans. In time, they will also pay more in taxes, not less. If it’s a giveaway, it’s to all Americans — not business.

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6 thoughts on “Stimulus? Extend Marginal Tax Rate Cuts to Produce More Growth

  1. Bush tax cuts did not pay for themselves.

    In addition, a tax cut without a corresponding spending cut is just a deferred tax increase.

    The true legacy of Bush’s tax policy will be an inevitable tax increase, no matter who becomes the next President. The free ride is over.

  2. A question or two: Will the IRS take a good piece of this money back next year? And
    now that the Senate has this bill, how long will it take for Harry Reid, Teddy Kennedy, Russ Feingold, Barbara Boxer, and their cohorts take to screw it up beyond all recognition?

    Finally, when the local news programs told the story of this rebate, they immediately cut to pictures of people shopping at one of the malls. Is this telling, or what?

  3. JM,
    You’ve got to stimulate growth so that GDP GROWS! Higher taxes don’t produce incentive to create and innovate; they just don’t. I’d love to see spending cuts. You might want to have a talk with some of these kooks in Congress, starting with Hillary (the earmark queen) and David Wu. Let’s not forget Earl Bow Tie Blumenauer and Peter Defazio–and ALLLLLLL of Alaska’s congressional delegation. Shame on them.
    This is one of two things with which I agree with John McCain. He offered NO earmarks.
    Food for thought: This war costs a lot of money. How much more money would it cost NOT to wage a war? National security is job one of the feds. Period. They’re doing their job.

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