Saturday, October 8, 2011

Largest Tax Cuts Under Obama

The Labor Department just released a report showing that the U.S. economy added 103,000 jobs last month, more than expected, with the private sector adding 137,000. Although the unemployment rate is stuck at 9.1 percent and growth is still slow, the economy has still added private sector jobs for 19 straight months, for a total of 2.6 million jobs.

This is in very large part due to President Obama’s first stimulus package (the American Recovery Act) which passed in February of 2009 (see chart below).

Under the Recovery Act, Obama passed the largest tax cuts in history—larger than the tax cuts of Reagan, JFK, and George W. Bush (Wall Street Journal). The previous record, held by President Bush’s 2001 $174 billion and 2004 $231 billion tax cuts, was surpassed by Obama’s $282 billion tax cuts.

The difference: The Bush tax cuts were targeted at the wealthiest Americans. The Obama tax cuts were targeted at the middle-class and small businesses.

After the success of the first stimulus, we need another stimulus to continue growing this economy and putting more Americans back to work. This is exactly why Congress needs to pass the American Jobs Act:
1. To put more money in the pockets of working and middle-class families
2. To keep teachers in the classrooms
3. To provide immediate employment by improving our infrastructure
4. To make it easier for small businesses to hire workers

Small businesses–which employ more than 50 percent of all private sector employees, pay 44 percent of total U.S. private payroll, and generate 64 percent of net new jobs in America—will not increase hiring unless demand picks up. Obama’s new jobs bill will help increase business and consumer confidence, increasing demand and, ultimately, increase business hiring.

Most importantly, the Jobs Act will NOT add a dime to our deficit –by saving trillions of dollars in ending the Iraq War and asking the wealthiest Americans to pay their fair share.

“Some see this as class warfare. I see it as a simple choice: Should we keep tax loopholes for oil companies? Or should we use that money to give small business owners a tax credit when they hire new workers? Because we can’t afford to do both. Should we keep tax breaks for millionaires and billionaires? Or should we put teachers back to work so our kids can graduate ready for college and good jobs? Right now, we can’t afford to do both,” (President Obama).

Republicans, on the other hand, have argued that asking the wealthiest two percent to pay the same tax rate as a middle-class American will hurt our fragile economy.

But how does asking a middle-class family to give up much needed services (like unemployment benefits, aid for student loans, Social Security, or Medicare) as part of a shared sacrifice, while asking nothing from the rich, any better?

The answer: it’s not.

Watch the nation’s second richest man—Warren Buffett—explain this concept:

1 comment:

  1. Nice to see you in the blogosphere! Your points are spot-on, Aishwani. But tax cuts only take effect after we've earned income for an entire year. They don't at all help the 14.0 million Americans who will be filing income returns at below the taxable income cut off, or showing losses that would wipe out their taxes anyway. What we really need from our President is to create real incentives--not just tax incentives--to re-employ main street in our economy. America is just too big and diverse and technically 50 different countries in one for us to run on big business. It's about the tailor shop down the street, and the Indian place on the corner. We need to help them be more efficient and bring down the cost of living for their employees, too.

    Check out my blog for my latest post about my recent foreign policy excursion: Teaching Mullahs Social Media!
    -Hamza Khan


Do You Agree or Disagree? Why? Please leave comments.