Current Events — HabitableZone

Current Events » in reply to Last I Heard Stimulating Tax Cuts

"Modest income tax cuts for the middle class."

The reason Democrats want tax cuts on those who don't pay a lot of tax is so that the total cuts amount to almost nothing.

An across-the-board cut will by definition return more money to those who paid more money. If you want to pump a large portion of money into the economy, this is the only way to do it.

This isn't politics...it's just math.

Check out this Excel File

Now, maybe I've missed something, or loused up my math, but this is how I read it: In the year 2000 (the most recent on the table) the total income tax revenue was over 980 billion dollars. Of this the top 50 percent paid $942.2 billion.

Put another way, if you gave the bottom 50 percent of Americans a massive 100 PERCENT tax cut, it would only have placed a total of $38 billion back into the economy in the year 2000. About the equivalent of California's current deficit. You can imagine the pittance only a "modest" income tax cut on the middle class would return to the people.

Any useful tax cuts have to involve tax cuts for the rich. Sorry. Like I said, it's just math.

Maybe can draw the line for "middle class" a bit higher. An income floor of about $55,000 puts one in the top 25 percent. If you cut ALL taxes on the bottom 75 percent, this would put about $157 billion back into the economy in one year, which is a lot better.

Of course, if the middle class is everything under the top 25 percent, it does raise the question of exactly what is "rich" and what is not.

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