Sunday, July 24, 2011

GOP Revenue Increases will be as Unreal as their Trickle Down Economics

The Obama administration has demanded that the GOP agree to revenue increases as part of any national debt reduction plan.  The Obama administration wants the approved plan to reduce the national debt by at least $4 trillion in 10 years.

The GOP plan proposed by John Boehner includes tax code modifications that Boehner calls revenue increases.  The changes actually include tax rate REDUCTIONS, which the GOP promises will stimulate the economy to produce more taxpaying employees.  The immediate effect of the tax rate reduction will be a guaranteed DECREASE in tax revenues.  The revenue increases will occur only after the tax cuts produce increased investments by employers resulting in increased employment followed by increased consumer demand and production.  The delayed effect of renenue increases is by NOT guaranteed.  The revenue increase effect would be no more real than the Trickle Down effect promised by Reaganonics.  Three decades of tax cuts by presidents Reagan and GW Bush only increased the wealth of the richest Americans and the national debt.

Of course the GOP proposed tax code modificaitons will also eliminate some taxpayer credits and deductions.  They don't propose to eliminate deductions for corporate jets or tax credits that make it possible for Exxon Mobil and GE to pay zero federal income tax year after year, however, they do propose to eliminate or reduce tax deductions like home mortage interest that impact the middle class the most and the rich the least.

Unless you peak under the cover of the GOP's proposal you will not know that their revenue increases are in effect only tax rate decreases for the rich and tax rate increases for everybody else.

Same old, same old.

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