Five MYTHS about the Bush tax cuts -

[JohnWxy]

http://www.urban.org/publications/1001423.html

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1. Extending the tax cuts would be a good way to stimulate the economy.

As a stimulus measure, a one- or two-year extension has one thing going for it -- it would be a big intervention and would provide at least some boost to the economy. But a good stimulus policy can't just be big; it should also offer a lot of bang for the buck. That is, each dollar of government spending or tax cuts should have the largest possible effect on the economy. According to the Congressional Budget Office and other authorities, extending all of the Bush tax cuts would have a small bang for the buck, the equivalent of a 10- to 40-cent increase in GDP for every dollar spent.

Why? As the CBO notes, most Bush tax cut dollars go to higher-income households, and these top earners don't spend as much of their income as lower earners. In fact, of 11 potential stimulus policies the CBO recently examined, an extension of all of the Bush tax cuts ties for lowest bang for the buck. (The CBO did not examine the high-income tax cuts separately, but the logic it used suggests that extending those cuts alone would have even less value.) The government could more effectively stimulate the economy by letting the high-income tax cuts expire and using the money for aid to the states, extensions of unemployment insurance benefits and tax credits favoring job creation. Dollar for dollar, each of these measures would have about three times the impact on GDP as continuing the Bush tax cuts.

2. Allowing the high-income tax cuts to expire would hurt small businesses.

One of the most common objections to letting the cuts expire for those in the highest tax brackets is that it would hurt small businesses. As Sen. Orrin Hatch (R-Utah) recently put it, allowing the cuts to lapse would amount to "a job-killing tax hike on small business during tough economic times."

This claim is misleading. If, as proposed, the Bush tax cuts are allowed to expire for the highest earners, the vast majority of small businesses will be unaffected. Less than 2 percent of tax returns reporting small-business income are filed by taxpayers in the top two income brackets -- individuals earning more than about $170,000 a year and families earning more than about $210,000 a year.

And just as most small businesses aren't owned by people in the top income brackets, most people in the top income brackets don't rely mainly on small-business income: According to the Tax Policy Center, such proceeds make up a majority of income for about 40 percent of households in the top income bracket and a third of households in the second-highest bracket. If the objective is to help small businesses, continuing the Bush tax cuts on high-income taxpayers isn't the way to go -- it would miss more than 98 percent of small-business owners and would primarily help people who don't make most of their money off those businesses
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[RUMMYisFROSTED]

1. One myth about the tax cuts:

They're not horseshit.

[nykym]

2. Additionally

a great number of the 2% crowd make their money off of Stock trades (Buy & Sell) real estate sales, and so on which for the most part is taxed at the 15% level, far below what we the so-called middle class pay for our income.

[subterranean]

3. There's no evidence that tax cuts for the rich stimulate employment.

Despite Bush's tax cuts, job growth during Bush's term was anemic. Bush left office with a net increase of just 1 million jobs -- by far the worst performance of any two-term president since WWII. Even discounting the two recessions, the economy added only 1.2 million jobs annually during the six years of expansion in between. During the economic expansion under Clinton, annual job growth was roughly twice that, despite higher taxes.

[sendero]

4. The idea that income tax cuts..

.. somehow help small business owners is Republican BULLSHIT. They are desparate to find some justification for these low tax rates on the rich.

IF THESE LOW RATES ARE SO FUCKING GREAT, WHY IS THE ECONOMY IN THE TOILET.

This article is Repuke propaganda.