Tax Cuts Of 2000/2001: Good Or Bad For The Economy. How Have The Bush Tax Cuts Affected The United States Economy? Includes A Bibliography.

1051 words - 4 pages

Tax Cuts of 2000/2001:Good or Bad for the EconomyThe Bush tax cuts have not proven to be good for our economy. Although, we had a budget surplus our government jumped the gun with the tax cuts. These tax cuts will decrease the surplus extremely quickly and this money should be going towards most of the governmental run programs that usually are geared toward the moderate to low income people. Bush did not anticipate any future events that could lead us right back into a budget deficit and this has become the biggest problem our economy is facing today.Taxes are necessary for the administration and funding of governmental organizations, as well as construction and universal infrastructure services. Taxation presents positive and negative characteristics within an economic system. As history presents, most taxes have been geared toward the middle to lower classes with the upper classes receiving many tax breaks. With tax cuts for corporations, estates and the top one percent of high incomes all the little people will be left out in the cold. By demolishing the entire budget surplus, government programs, such as social security, will be neglected once the baby boomers begin retiring (Friedman, et al May, 2001, p 1). As Mark Breslow states, "The corporate income tax, which is relatively progressive, has been replaced by taxes that are a particular burden on people with moderate and low incomes. The cut of the alternative minimum tax has done nothing to help put money where it is needed, in the moderate to low income pockets. These people would definitely help stimulate the economy to help get us out of the recession we are falling into.John Miller points out, "that only two percent of estates are actually taxed and even the well off have little to worry about (Miller 2001 p 59.)." This still does not help the situation with the moderate to low income taxpayers. This group is being over taxed because they can never make enough money to meet the upper one percent of income that would be a benefit to them. This group also does not participate in the decision which does not help their situation.Robert S. McIntyre argues that, "The individual tax changes, which includes a ten percent decrease in capital gains taxes, are sharply tilted towards the wealthy (McIntyre, 2001 p. 1)." According to Joel Friedman, "some fifty-five percent of the stimulus package benefits are going to the wealthiest one percent of taxpayers (Friedman, et al November 2001 p. 1). This is very discouraging but it seems that if the people really cared about or was fully informed of the results of these tax cuts there would be severe rallying in the streets.Bush's tax cut, or stimulus package, has only been geared toward the upper class and this class has a very low marginal propensity to consume and therefore will not contribute to our failing economy (Friedman, et al November 2001 p. 1). This group usually does not change their spending patterns based on a change in their income. On...

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