Robin Hood would be turning over in his grave after the outcome of today’s vote on the Bush Era Tax Cuts. Thanks to the party of the rich voting down the tax cut bill proposed by Senate Democrats to extend the cuts to hard-working families across the country, 53-36, it looks like the President will cave on the issue and let everyone including the richest 20% of Americans (who own 85% of all the wealth) have their tax cut. It has been the position of Republicans that in order to reduce the debt and deficit we do two things: cut taxes and cut spending. This is like saying in order to reduce our debt at home we should take a drastic pay cut and reduce our expenses. Now that sounds great right away, but what is hidden in this position is that the pay cut must be subsidized by using more credit cards. Further, he reduction in our expenses means that we sell the car, leave the house and tell the kids to fend for themselves.
Starting with Ronald Reagan, cutting taxes without paying for them has been the single most expensive government program other than military spending. The Bush Era tax cuts have cost the nation $2.5 trillion while more than 80% of the cash from those cuts going to the top 5 percent wealthiest Americans. Wealthy Americans have seen a steady increase in their take home pay and even with the turbulent events of 2008-2009 have all seen their overall net-worth increase.
In fact, The New York Times said, “The nation’s workers may be struggling, but American companies just had their best quarter ever. American businesses earned profits at an annual rate of $1.659 trillion in the third quarter, according to a Commerce Department report. That is the highest figure recorded since the government began keeping track over 60 years ago, at least in nominal or noninflation-adjusted terms … Corporate profits have been doing extremely well for a while. Since their cyclical low in the fourth quarter of 2008, profits have grown for seven consecutive quarters, at some of the fastest rates in history. As a share of gross domestic product, corporate profits also have been increasing, and they now represent 11.2 percent of total output. … This breakneck pace can be partly attributed to strong productivity growth — which means companies have been able to make more with less — as well as the fact that some of the profits of American companies come from abroad.”