Ethicalego Speaks

Ethicalego (Kenneth Brooks) discusses current events from a critical thinking perspective rarely expressed elsewhere

Congress should not extend tax cuts for high-income households.

This yearly disparity of income shifts the nation's wealth to a tiny minority of the population. Census reports show the poverty rate at 14.3% and 50.7 million people without health insurance. Nevertheless, Republicans threaten to block extension of unemployment insurance that people need to pay rent and eat. In addition, they announced plans to repeal President Barrack Obama's recently passed health care plan.

The government continues to run despite tax cuts that reduce tax revenue. This means government officials will try to cut some services, increase fees for other services and send the nation deeper in debt by selling bonds. Households in the top income brackets can afford to buy services they need. The added fees they pay for government services will be small relevant to income and the taxes they would pay without the tax cuts. Also, they will buy the newly issued government bonds and receive interest income that is free from taxes or taxed at a reduced rate.

In contrast, added or increased fees for government services devastate budgets of lower-income households mostly living paycheck to paycheck. They will have to do without services or pay the fees and cut spending elsewhere. Those fees divert money from private sector spending by households the same as taxes do. Omitting this fact is the deceptive part in Republicans' argument that Congress must extend tax cuts for high-income households and not increase taxes during a recession.

Another Republican deception is the claim that reduced taxes for households in the top income range will translate into business investment and jobs. High-income households will invest money from tax cuts where they receive the highest and safest return. This money could land in government bonds or in foreign corporations that do not create jobs in the United States. Consider the United States enjoyed budget surpluses and low unemployment rates before the 2001 and 2003 tax cuts and deficits following them. In addition, the tax cuts were in force before 2008 and the beginning of this recession and they continue. Nevertheless, unemployment rates are above 9%.

I could agree with Republicans' goal to reduce taxes if they proposed practicable means for reducing the size and costs of government. Here are some suggestions. Abandon the prevention law enforcement strategy and prosecute only acts that harmed people or their property. This means repealing drug laws. Close most of our military bases in foreign nations. End federal revenue sharing with states. Remove federal urban development under the Housing and Urban Development Department (HUD). Eliminate or reduce the size of the IRS by passing a single tax rate for everybody with income above a threshold amount like $25,000 (each for a married couple) with allowances for children and catastrophic costs for illness.

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Investing in Big Business   |December.19.2010 Actually, by giving tax cuts to the wealthy business owners, jobs will in fact be created because that allows the company to expand and provide more jobs. The problem is a lot of those jobs created are not here in the USA. Those tax cut jobs are given to the countries that actually produce the company's products in factories and assembly lines, namely China. When the country is in recession it's only natural for wealthy business owners to get work as cheap as they can find it to reduce cost of their products. Since China's factory employees have adapted to living off of just a few dollars a day, you can't find much better cheap workers then them. While the idea of buying low priced products labeled "Made in China" may seem like a dream come true for middle class consumers looking for a good deal, they should realize that the money they save comes out of the paycheck of a hard working American and possibly cost him his employment. To solve this financial recession, we need to know how and where our money is actually flowing in our economic pipe system. Once we find the sources of the clogging and draining in those pipes we can finally begin to fix the problems in the US economy.

silasbarnabe   |December.11.2010 LOL! This whole discussion is laughable, the tax breaks are in force now and have been since 2002 and we have a national 10 percent unemployment rate. No one could be stupid enough to try to say that tax breaks for the rich create jobs, they haven't in eight years.

Taxes   |December.08.2010 What is the tax rate for folks earning over $250000? It has always been my feeling that the poor and the rich pay no taxes, the middle class bears the brunt of the largest tax burden per middle class per capita. So, if you make $50,000 or under and have three dependents and a house, no pay basically no taxes (my friends scenerio.)If you are a married couple no kids and make $100000 with house deduction you are taxed at 28% and what if you earn $1000000.00? What is your tax rate before you deduct your house if you are a married couple? How about with three dependents? If the middle class is taxed at 28% of $100,000 ($28,000) then it would seem the person earning $1000000.00 would pay a tax of $280,000. This is too simple I know, but am I on the right track?

Wait and See   |December.07.2010 The repubs claim that the tax breaks for the wealthy is needed because they are the people who will produce jobs. So with the extension of the tax breaks, we should see an immediate increase in new jobs and people coming off the unemployment rolls. If this does not happen when 2011 rolls in, then we will not need to have anymore proof that the repubs are liars and let's stop this "reaching across the isle" bulls***. The repubs will not stop until they eliminate the middle class. I will then fully expect Obama to take names and kick a**.

tramky   |December.07.2010 Brooks is, of course, wrong on this issue. First of all, it is NOT for the Federal government to be involved in takings based on financial envy, and that is PRECISELY what Brooks is talking about. What is ridiculous in America is just how many people pay NO taxes. It is my view that EVERY person or household should pay a minimum of $50 or $100 if their otherwise calulated actual personal income tax is zero. There should be NO American who is able to believe that there is no cost to governance, and that they are entitled to a free ride since someone else is paying for it.

Retired_IBEW   |December.07.2010 It happens because legislators are whores to whomever can stuff the most cash in their pockets. I have read so much on this forum about the angst expressed toward union influence but it seems no one wants to talk about the influence of corporations and of the filthy rich on how the country is run. Republicans ranted about the deficit and without even blinking just added hundreds of billions to it to satisfy the billionaires who really run this country.

Firebug   |December.07.2010 When will the tax cut propaganda end? I have heard since Bush passed them eight years ago that tax cuts for the rich create jobs. with a steady rising unemployment rate during his tenure to the current 10 percent unemployment rate there is little evidence to support tax cuts for the wealthy create jobs. If they do then where are they?

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