Bye Bye Tax Cuts, Bye Bye Democrats?

Democrats and Republicans rarely agree on anything. This is a fact. So really it should come as no surprise that the Democrats and the Obama administration are opposed to extending the Bush tax cuts. However, most journalists and bloggers are beginning to wonder, if by not extending the Bush tax cuts are the Democrats signing their death certificates in November? Are they ignoring the real concerns of the people in this nation? Erik Erickson a blogger on a politically right-leaning blog, decided to write an entry defending the Bush tax cuts and providing evidence as to why the Democrats should be on board to extend them.

According to Erickson, the Bush tax cuts were passed by George W. Bush and Dick Cheney in response to a recession when they first took office. These tax cuts were Bushs’ version of the Obama stimulus plan. They cut tax rates, increased the child tax credit, increased the standard deduction for married couples, and provided increasing contribution caps for a variety of savings programs. The Obama stimulus plan, Erickson argues, only proceeded to create temporary government jobs while subsidizing the expansion of the government.

After the September 11th terrorist attacks the economy grew at an anemic rate, prompting the passing of the Jobs and Growth Tax Relief Reconciliation Act of 2003. This act revved up the 2001 tax cuts, by cutting taxes on dividends and capital gains. This led to what was deemed ‘the tax cuts for the rich’, in which the richest 1% began paying almost 40% of all income taxes. But, most importantly, after the 2001 tax cuts the annual growth rate increased from .3% in 01’ to 2.5% in 02’, in 2004 America saw its highest GDP growth rate in 20 years.

Democrats, however, argue that after the 2003 tax cuts Americans saw the lowest unemployment rate since WWII. Erickson, of course, has a response for that. He argues that there are actually many reasons for the collapse. He says that you cannot always believe economists and take what they say as the gospel truth. The economy is not a precise science, there have been and will continue to be upturns and downturns. Also, during that time there were new massive regulations in Sarbanes-Oxley and the continuing infiltration f the government into private lending markets. This forced private lenders to launch risky ventures to stay profitable, which in turn lead to them collapsing in and taking the government with them. The Bush tax cuts actually had nothing to with it, Erickson argues. If the Democrats end the Bush tax cuts, then they are risking making the economy worse and possibly introducing greater uncertainty into the market.

Erickson is obviously appealing this entry to Bush lovers, and Republicans. However, I believe he actually wrote this piece in an effort to sway those individuals who may not have a specific party in which they vote, Independents and/or individuals who typically lean toward the conservative methods of economic policy. He is trying to sway the fence sitters, by providing the best facts about the Bush tax cuts and providing evidence to knock down any potential defect the Democrats may state is present in the Tax cuts themselves. Do I agree? I actually already believed that the Bush tax cuts were a positive reinforcement into our economy. After watching the Stimulus bill crash and burn, I believe that the Democrats should extend these tax cuts. Obama and his administration are hurting the chances for all Democrats in the polls in November, by ignoring the pleas of Americans all around the nation.