June 7th marked the ten year anniversary of the now infamous “Bush tax cuts.” While democratic lawmakers argue that if the Bush tax cuts were suppose to have brought more economic prosperity, then why is the economy so bad? Of course, they don’t appreciate how changes in tax policies can sometimes take years to make substantive impacts on the economy, nor do they seem to understand how factors other than tax breaks have brought us to this horrible state of affairs. IRS tax attorneys remind us it was the Clinton administration (immediately following Bush’s tax cuts) which enjoyed a surplus for which Clinton was happy to take all the credit.
IRS attorneys suggest the Bush tax cuts may have actually been a step in the right direction. These IRS tax lawyers point to European tax levels which are, by most standards, oppressive and arguably produce negative impacts on the prosperity of the private sector and suggest America’s tax burden on the rich is become much worse. It was Milton Friedman, the highly respected economist, who advanced the notion that freedom could be seriously threatened in Western democracies if government spending exceeded 60% of the Gross Domestic Product (GDP).
Currently, IRS tax attorneys report the 2010 total federal, state and local government spending amounted to approximately 36% of GDP. As the Obama administration continues to expand government’s role in such strategies as make work programs to improve unemployment figures, and increasing government’s role in the healthcare industry, that number may be expected to continue to increase.
As Democratic lawmakers are now considering a three percent (3%) surtax on income over $1M, in order to help raise federal revenues to pay for more government expansion, IRS attorneys say the government is creeping closer and closer to Milton Friedman’s sixty percent (60%) “tipping-point.” In fact, if the millionaire surtax becomes law, added to other tax increases already passed last year, the top tax rate on earnings could be as high as sixty two percent (62%). What’s more, IRS tax lawyers indicate Obama has even proposed eliminating the income ceiling on Social Security tax, which is now capped at $106,800 a year, thereby increasing the tax burden even more.
If this weren’t enough, Treasury Secretary Tim Geithner and most Democrats in Congress assert our economic mess is due to “tax cuts for the rich.” IRS attorneys look to The Tax Foundation’s recent report indicating in 2009 the country collected a higher share of income and payroll tax (approximately forty five percent- 45%) from America’s wealthiest tax payers while socialist welfare countries like France (28%), Sweden (27%) and Germany (31%) all collected much less from their highest income earners.
In the next Presidential election taxpayers will have a clear choice between Republicans and Democrats over the issue of increasing taxes. As we celebrate a ten year mile-stone of Bush tax cuts, one can’t help to question how everything else that has transpired since those tax cuts became law have contributed to the terrible economy we now experience.
Segal, Cohen & Landis 9100 Wilshire Blvd. Ste. 601E Beverly Hills, CA 90212 (310) 285-3999