Letter to the editor: Republicans’ promise to extend tax cuts out of stepRepublicans keep telling us that we must keep the Bush era tax cuts alive, especially for the highest earners: “Job creators,” they’re called.
By: Scott Nelson, Grand Forks, The Jamestown Sun
Republicans keep telling us that we must keep the Bush era tax cuts alive, especially for the highest earners: “Job creators,” they’re called. I don’t see how we can afford to do this for the wealthiest and pay down our nation’s debt. In 1980 then Republican presidential candidate Ronald Reagan championed tax cuts for the wealthy as “trickle-down economics,” meaning that the financial benefits of their investments would eventually make their way downstream to the working class and put more dollars in our pockets. This “trickle down” was supposed to pay for the tax cuts, but the deficit under Reagan’s watch grew, even as top marginal tax rates were reduced by 20 percent.
When George H. W. Bush took over in 1988 he proclaimed, “Read my lips, no new taxes!” Top marginal tax rates dipped to 28 percent and deficits grew again. Before Bush was defeated by Bill Clinton in 1992, the top tax rates had been increased to 31 percent and for two years the deficit started to come down. During Clinton’s two terms as president top tax rates were raised to 39.6 percent and the deficit was brought under control for the first time since 1965. Oddly enough, Clinton was able to get this done with Republicans in control of both houses of Congress. Enter George W. Bush in 2000, top tax rates fall to their present rates and the deficit had climbed to levels higher than any of his three predecessors. Two unfunded wars and the largest financial meltdown in recent history will do that to you.
Now President Barack Obama has been left with a huge fiscal mess to clean up and the Republicans say we can only cut spending, not increase revenue. The Grand Forks Herald’s front page story of Sept. 9, “Lagging Wages,” showed the typical North Dakota worker earns about $38,127 per year. The median pay for U.S. workers was up only about 1 percent from the year before, not enough to keep up with inflation. Equilar, an executive pay research firm, states the typical public company CEO made, on average, $9.6 million in 2011, up 6 percent from the previous year. It’s very plain to see that with U.S. corporations doing so much better financially than the average worker those who earn more won’t be hurt by the tax rate increase that Obama and the Democrats are fighting for. The above comparisons show why the Republicans’ campaign promise of extending tax cuts for the wealthiest is completely out of step with both history and reality.