A favorite but of misinformation from the left is its assertion that Bush’s tax cuts for the wealthy are one of the main causes of our federal government’s fiscal woes. First off, the critics conveniently ignore that Bush’s tax cuts were for all federal income tax payers, not just the wealthy, and second, federal tax revenues collected under the Bush economy were at all time highs. Don’t take my word for it – check out The White House’s web site. The problem wasn’t Bush’s tax cuts, it was his tax increases.
Which tax increases? Take a look at that same page that shows Bush’s revenues being at all time highs – so was his spending, at least until his successor took office. A quick glance immediately shows how even though Bush raised record levels of tax revenue, he was spending our money at a faster rate than he was bringing it in. When you get down to it, all government spending is paid for by taxes, whether you call it a tax or something less honest like a “fee” or a “penalty.” A while back I believe it was Cafe Hayek that defined deficit spending as something to the effect of “A tax increase that simply has not been levied yet.” In other words, since all government money has to come from wealth created in the private sector, any deficit spending is technically a tax increase. I would also argue that it is an incredibly cowardly way for politicians to hand out goodies today at the expense of others in the future.
So how much did Bush cost us with his tax increases? Using my handy-dandy progressive income tax calculator [1] to ensure that 1) everybody pays and 2) everyone pays their “fair share”, I come up with the total Bush tax increases looking something like this:
(I know the images may not be showing well. Click on any table for a better view)
You probably know where I’m going with this. Unlike all of the leftists who howled in protest over the Bush deficits who know have nothing but love for the debt incurred under President Obama, we’re going to now add the Obama debt and extrapolate out based on debt projections roughly what their tax increases will amount to. For fun I thought I’d go back as far as Reagan to see which presidents in modern times have levied the biggest Deficit Tax increases on our country: Although I admit to being a partisan, I do believe in applying the same set of standard to both sides (A concept I truly wish our left friends would adopt) and I figure that going back as far as The Gipper is a good way to show how both sides in modern history share the blame for where we are today
Pretty ugly, huh? The only president who managed to make up a “surplus” was President Clinton, but as I’ve pointed out previously not to get too excited either way over using these stats to praise/blame a president for how our economy performed. The president himself is one of many factors that influences our economy, but still a significant one nonetheless. This is the part where I say something guaranteed to annoy everyone who is reading this. Conservatives, you’re going to have to give Clinton at least some of the credit for the boom in the 90s. Yes, I am aware of the cold war ending, the tech boom and a Republican Congress that kept spending relatively in check. That said, Clinton worked with his own party and knew how to keep his own party’s fringe element in check and reach across the aisle to work with his rivals to pass NAFTA and sign welfare reform into law. For the lefties reading this, if you truly believe that Clinton was the driving force of our economic boom of the 90s, you’re going to have to start facing reality and accept that President Obama’s policies have to be held accountable for our current low growth, high unemployment and skyrocketing deficits. Yes, he inherited an economic mess. Do you know who else did? George W. Bush did, but instead of crying about the tech bubble burst or 9/11 or the weather for holding off economic recovery, he took action that worked. Yes, he applied that extremist notion of allowing American taxpayers to keep the money that they earned and let them choose how to best spend it.
So what abut President Obama’s tax increases?
If you’d like a breakdown of how much Obama’s spending is costing you, it can be seen here by year. This is how the CBO is forecasting based on his projections. Note that the debt drops in out years, and I wouldn’t place too much faith in that happening. Keep in mind that the source data the CBO uses to make these estimates came from a White House run by someone who told us unemployment would be below 7% and that the deficit would be halved by now. As painful as these numbers look you can expect them to be much worse. Source data for these projections is from this report at the Congressional Budget Office:
Keep in mind, these taxes are not alternative taxes, they are not some new flat tax or fair tax or even a neutral tax. This bill is on top of what you are already paying in federal, state, local, sales, property, and any other taxes. Think of it as an additional debt surcharge on top of everything else you are already paying. And if you’re married, I hope you didn’t combine your household income. This is based on the total number of tax payers, so be sure to add your deficit tax separately to your spouse’s. There is more on this methodology where I originally posted how we could pay for our debt.
Conservatives reading this are surely shaking their heads at the president’s policies or nodding in approval at the great choice that they’re going to make by voting for the Romney/Ryan ticket. Having adults in the White House is finally going to get us back to fiscal sanity pretty quickly, right?
Wrong.
I use the projections from Ryan’s page over at the House of Representatives’ web site. Even though these are Ryan’s numbers for naming consistency I’m calling this the Romney Plan. And from what I’ve read independently it looks like we’ll finally get a balanced budget around… 2040.
The point if this is to not be fooled by all of the slimy rhetoric we’re hearing about heartless cuts and crushing austerity proposed by those evil extremist deficit hawks. Burying your head in the sand has a pretty solid rate of failure in terms of making problems go away. Just because our elected leaders mostly lack the intelligence or honesty to tell us how they’re managing our tax dollars is no reason to ignore the reality of what is happening.
And most of all, we need to start calling our politicians out on these tax increases that they keep imposing year after year. We are the ones who need to hold them accountable and keep them in check – it’s not like our lawmakers or the press are.
Cross posted from Brother Bob’s Blog
PS If anyone wants to question my numbers or assumptions I actually welcome it. Reach out to me and I’ll be happy to send you my spreadsheet
[1] These estimates are based on basic, high level numbers. I took total debt by year(s) and divided by number of taxpayers. How it got divided goes as follows:
- Total debt is calculated from the White House’s web site as total spending – total revenue.
- The spreadsheet I used is at this link.
- I used the the roughly 232.458 million taxpayers as my base for numbers of people paying taxes to the federal government each year.
- The tax brackets are the ones used by the IRS. Number of people in each is taken by percentage of the population in each bracket.
- For numbers of taxpayer in previous/out years I used a small multiplier based on overall population changes. Previous year data is here. Outyear data is here.
- There were only two pieces to this that were purely subjective: I removed 8,274 citizens from the $1 million + tax bracket and created a new $10 million + bracket to put a greater burden on a small percentage of high income owners.
- The percentages that each bracket pays are based on two criteria – everybody pays, and the brackets are progressive from the bottom up. No matter how badly you’re getting stuck the person above you is far worse off.
A couple of points, Brother Bob.
-I don’t know how many of us “conservatives” here at FA believe that Romney/Ryan in the WH will return the government to fiscal sanity. I am not one of them. I’m pretty sure Mata isn’t either. I’ve commented before that Ryan’s “plan”, when he first put it out, didn’t go anywhere near far enough in reigning in the free spending ways of the government.
And, of course, predictably, the liberal/progressive’s who comment here at FA called Ryan’s plan “extreme”. That it casts aside the less fortunate and puts in place even lower taxation on the high income earners(although they use their favorite descriptive, “wealthy”).
I, personally, would opt for even more aggressive spending cut measures, while keeping the taxation rates where they are right now. In a perfect world, though, I would opt for adoption of the Fairtax, but that is another matter entirely.
-Another point, you are quite correct in the President being one of many factors affecting the economy. Even disparaging remarks and threats to people’s welfare can have devastating negative effects. And as for Clinton, it has always been quite clear to us conservatives that his budget “surpluses” happened entirely at the expense of putting away the SS and Medicare tax revenue surpluses somewhere they could only be used for those purposes, in order to fund the general government outlays, thus creating his “surplus”. Clinton’s “surplus” was nothing more than an accounting trick designed to fool the ignorant and uninformed, and at the same time that it did that, it mortgaged the future of social security on the hopes and dreams, foolishly, I might add, that the workers in the future would be able to pay for the retirees still living. (And I will add that it wasn’t just Clinton that did this, but nearly every Congress and nearly every President since the inception of SS and Medicare).
-And, this is just an add-on, so to speak, to your entire posting, I find it extremely frustrating when the liberal/progressives continue to argue for increased spending(coupled with an insatiable appetite for “fair” taxation that is anything but fair), taking us steadily, and ever faster, down the same road that Greece is traveling, and decrying any attempt at applying the brakes, however small, as being “extreme”.
Who is going to catch us when we fall? China?
Honest and effective measures now to right the ship will be painful. For many, I’m sure. But that pain will pale in comparison to when we finally do reach that point where there isn’t any money left from the “other people”. It is this that is most frustrating to those of us who truly look at the past objectively and apply the learned principles and failures to what is happening now.
The only thing missing was the constant drum beat by the msm about ”the homeless,” the poor,” and the one lady who MIGHT fall through the cracks IF Bush cut even the RATE of INCREASE in each budget line.
I must note that there are MORE Homeless all over the place under Obama.
BUT fewer stories about them.
Weird.
Our city spends tens of thousands a MONTH just bull dozing their trash into piles and hauling it away near freeway under/over passes, river beds, and parks.
The last spurt of local coverage was in 2009 when some homeless guy up and murdered a couple of other homeless folks here in Long Beach.
The photo with this old article shows what WAS the homeless population under the 7th Street Bridge where I pass daily.
No current photos but the situation is 10 times worse now.
People are under every tree and bush all along the freeways as well as under bridges.
@johngalt:
China to the rescue? Nope. Remember the anti-Japanese sentiment in the 80’s and how they were the next ascending power. The same pattern/wave just repeated with China.
Socialism inheritably as Thatcher pointed out, “runs out of other people’s money”. Japan, EU, Argentina, CCCP. Here’s looking at you China; China’s next move is bust. America seems happy to follow in these failed footsteps, G-d bless.
There are no more safety nets. Global powers are undermining each others currencies in a bid to keep their exports affordable. Is why the Swiss pegged their Franc to the Euro. Net loser in this war has been China with manufacturing expanding into south Asia and rebasing back to America.
The house of cards will fall and will be too overwhelming for any one actor to save. And all indications from financial data released today, the cards are starting to fall – welcome to the double dip.
You have to pass it to know what’s in it. Antipole to a successful business. If you can’t project out and plan for taxes/regulations five – ten – twnety years ahead, business owners are gonna be bearish, going Galt. That’s biz101 and what’s occurring. No one knows wtf is around the corner and businesses need the ability to project.
So many legitimate critiques of the Bush’s years but the media was too busy yelling squirrel!. No child left behind and his prescription med entitlement… It’s big gov’t – the reason for the end of majority of all failed states.
We either apply the brakes or go full Greece. Pain either way. 40% of every dollar spent is borrowed. Gov’t needs to shrink by 40%. OUCH!
Can the pols end their $$$ addiction? Probably not.
There’s no guarantee of any rescue; have a plan and depend on yourselves. Prep please my fellow Aces. Just in case SHTF. And I’m not sensationalizing, if you think so, here’s required reading: a first hand biographical account of a family surviving the 2001 Argentinian economic collapse.
Great comments so far, everybody – thanks for your responses.
@johngalt, I agree that most conservatives don’t have the delusion that the world will be a paradise under Romney. We don’t exactly have the same cult worship that the left had, and still too many have, for The One. It’s scary how half of the country thinks even suggesting we have a problem is extremist and lives under the delusion that tax increases will solve our problems.
Interesting posts all – too many good comments to respond to everyone right now.
Watch for next week – finishing two posts, one on showing a payment plan for our national debt and another of what a 3rd term under Bush might have looked like – both scary stuff
@mossomo:
The question, with the query of ‘China?’, was sarcastic, as there won’t be anyone to catch the US if we fall, economically. One has to think that Russia is salivating at the prospect of the US going under, to be there ready to ascend to what they see as their rightful place in the world.
@johngalt: Hey JG, Clinton also had over 60 military bases closed during his 8 years, that had to help with “government cuts”.
@inthemiddle:
That is true. I don’t recall the exact number of bases, but that wasn’t the end of it, either. Troop numbers, lowering standards for certain jobs in the military, and stretched budgets meaning equipment slow to be repaired, all contributed to my own decision to not re-enlist. At the time that I got out, it was nearly a given that Al Gore would be the next president, as the economy itself was still going kinda strong, pre-tech bust days.
The cutting of the military during the Clinton years contributed heavily towards the sharp increase seen in defense spending Bush initiated.
@johngalt: “A majority of top Wall Street bond dealers and money managers say spending cuts alone cannot solve the U.S. budget problems and tax increases must be part of the mix.” http://www.reuters.com/article/2011/05/10/us-usa-defict-survey-idUSTRE7497G620110510
Do your proposed spending cuts include defense, or just social programs—for the elderly, children, the sick and disabled, the poor—these are real people with sensation, thought, and emotions, not just abstractions—although they’re always denying this view. (As conservatives tend to look at them—I know, I used to be one of them.)
So much of Obama’s borrowed money spending is wasted on inanities.
All the ”green” stuff.
It took over 3 years to spend the ”stimulus” money.
Some of it was recently spent on making the reflecting pool in front of the Lincoln Memorial, ”sustainable.”
$34 MILLION went for this.
So, how’d that work out?
Massive amounts of ALGAE are blooming in that little pool now.
Yes, our nation’s new environmentally friendly reflecting pool stinks!
(Algae STINKS!)
But, hey, Obama ”saved” some water for drinking by STINKING UP OUR NATION’s BEAUTIFUL REFLECTING POOL!
Yeah, Obama’s greenies brilliantly (NOT!!!!) thought this water didn’t need to circulate.
Where does he find such stupidos?
Water evaporates.
Water is splashed out.
It NEEDS to circulate.
It needs to move.
Have none of these ivory towerists visited a bog?
@Liberal1 (Objectivity):
Lib1, the problem with liberal/progressive Defense spending cuts is that they are only interested in the dollar amount being cut, not what is cut. As such, and as exampled under Clinton, the cuts affected the efficiency of a particular unit, base, force, ship, etc.
The efficiency of a particular military unit depends not just on those “in the field”, but also those in support positions here in the US and abroad, as well as supply chains, weaponry, training, and more. Cut one of those drastically, and you affect the efficiency, making it harder to complete missions, tasks, that are assigned to the troops “in the field”.
I have no problem with defense spending cuts. As long as they are done smartly, by the professional men running the units, bases, ships, fleets, and not some pointy-headed intellectual masquerading as a politician. That is what happened under Clinton, and as a result, the cuts employed yielded drastically reduced military efficiency and effectiveness worldwide.
Now, you can say that the ‘right’ is only interested in the dollar amounts cut from social spending programs, and you’d be partially correct in that assessment, but not entirely. And while it might seem that conservatives wishing to cut certain funding for certain programs are cold and do not care about the people affected, the truth is that the Constitution, and effectiveness of the social programs themselves, determine where we want to see the cuts happen.
And, as Gingrich, along with Clinton, showed, cutting social welfare programs doesn’t mean that the people directly affected will be left out in the cold, so to speak.
There is no doubt, however, in my mind, and many, many others’ minds, that spending cuts, drastic ones, need addressing before any talk of tax cuts or hikes can go on. The problem with the federal budget is entirely due to the massive spending the government has been engaging in, or engaged in, since the 60’s. Especially so given the $1 Trillion dollar plus deficits being rung up under Obama that are clearly unsustainable.
@Liberal (Objectivity): I know you never read follow ups or respond, but I hope today will be the exception.
You mentioned that you used to be a conservative. What changed for you? I’m genuinely curious