The Economic Stimulus Check Means Higher Taxes To Come.
At least, that’s how the second paragraph in an article on CNN reads:
“If you’re among the 130 million people who qualify for the rebate, that’s great. But you should savor the feeling. Regardless of what happens over the next few months, your taxes have nowhere to go but up in the long-term future.”
And honestly, I happen to agree 100% – we cannot continue to give tax cuts out to everyone except the lower class, pay $12 billion a month for war, subsidize the airlines and everyone else (except Amtrak, strangely enough), send out notices (at the tune of $42 million) just telling us the stimulus checks were coming out, and then issuing the checks at a cost of $150 billion. And here is why your taxes will go up, as once again the Democrats will get the blame because they have to fix our situation over the next 4-8 years:
“Today’s low rates can’t last. The tax cuts of the past decades were supposed to lift economic growth (which they did) and hike tax receipts faster than federal spending (which they did not). Not even close. The resulting tsunami of federal debt is one reason to expect your taxes to rise over the next quarter-century.”
Remember how the tax cuts of the last 7 years were supposed to help our economy grow? It did just the opposite, and somewhere down the line, guess who gets to pay for this disaster? We do. So keep that in mind – although the government sent you $600, they will be coming back with their other hand wide open asking for even more. Nothing is for free, they say….
David, I couldn’t agree with you more. You’re dead on with everything you wrote here. Unfortunately.
I agree as well, and encouraged our readers to take advantage of these low rates as much as possible: lower credit rates, mortgage rates etc. Nice site!
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Yeah well it is sounding like they can’t even “give” money away without making some mistakes. I don’t feel stimulated at all, as hubby and I only got $600 total for both of us. They may have made a mistake … which of course will require more money to fix. Since we are in the 0% tax bracket I guess we shouldn’t fuss too much, but our expenses have gone up 12% since the beginning of the year. This so-called stimulus covers only two months of increased expenses, with enough for one decent anniversary dinner.
@DR – you are in the 0% tax bracket? Maybe you only got that much because you don’t pay any taxes – I don’t know how that works.
It’s not a stimulus – to me it’s an advance on taxes we are going to owe later!
i completely disagree with you. everyone that pays income taxes got a tax cut under bush, including the lowest income earners. and the bottom 50% of wage earners pay about 4% of the total of all income taxes. There’s never been an economic problem the democrats have ever fixed, and under bush we’ve had one of the greatest expansions of the economy in the past 30 years.
You’re spot on, David! Not sure what Squeezer is talking about, as the rich have gotten richer under Bush’s “leadership”, regardless of the crumbs that have been thrown to lower and middle-income earners. I am worse off than I was 8 years ago, and a $600 ‘rebate’ check isn’t going to change that. Also, the fact that it is an election year makes me suspicious—the great economic experts of our time have all weighed in on the fact that the tax rebate isn’t going to substantially improve the economy, so all I can guess is that our politicians (democrats and republicans) are buying our votes.
That’s pretty funny Squeezer, one can only hope that you bleed sarcasm.
[…] The Economic Stimulus Check Means Higher Taxes To Come at My Two Dollars — A good argument and explanation as to why taxes will be higher in the coming years. […]
[…] My Two Dollars tells us what we should see coming, the economic stimulus checks will mean higher taxes for us in the future! […]
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I completely disagree. The Bush tax cuts helped stimulate the economy SO much that it caused the housing crisis and subprime meltdown. The tax cuts helped lower the interest rates which spurred on the housing boom and caused mortgage lenders to exploit buyers and buyers to go nuts and lose all rational thought.
Cutting taxes ARE the solution to helping long-term growth. I agree that the quick-fix stimulus payments will not help, but you can’t blame cutting taxes for the reason that the economy has slowed down. It slowed down because the citizens of this country got too greedy with the housing market and single-handedly made it tank. The tax cuts did what they were supposed to do, help faciltate and stimulate growth. How that growth and stimulation is handled is up to us.
So the massive pile of debt that we AND the government are carrying will not ever have to be paid back by increasing taxes? That was the point of this article. You cannot cut taxes and go on a spending spree…it has never worked and never will. It’s one way or the other; not both.
And to echo Squeezer, the 2001 tax cuts lowered the lowest tax bracket from 15% to 10%. That’s a 50% decrease for the lowest tax bracket earners. Plus, it lowered the capitals gains tax which benefits everyone with real estate or stock investments. And millions of middle class earners have these investments. So, don’t throw around the platitude that it was just a “tax cut for the rich”. It’s not true.
Yes, and our country has been so successful and prosperous since the tax cuts – The dollar is worth nothing overseas, the national debt is in the trillions, unemployment is high, wages are stagnant, the price of food and gas is skyrocketing…everyone is doing so well.
Sorry, but I have to disagree – just because a chunk of people save 5% on their taxes does not make for economic growth and good times for all.
I think we can all agree that an honorable country would repay its debts. As David points out, the US federal government is in debt to the tune of 9 Trillion dollars. That money has to be repaid. Cutting taxes and reducing revenue when you already have a gigantic yearly budget deficit is the opposite of progress.
You can like the Bush tax cuts or hate them. Either way, a person who’s honest with him/herself must know that higher taxes are going to have to come. Which, I believe, was David’s point.
[…] are watching for their economic stimulus rebates, My Two Dollars thinks they’ll means higher taxes in the future. If you’re wondering why your rebate check was smaller than expected read about […]
Thanks KMC – exactly.
“You cannot cut taxes and go on a spending spree”¦”
True.
But why does everyone accept the “fact” that we have to pay more in taxes to “fix” the problem?
The problem is NOT the tax cuts, it’s the run away spending! Raising taxes will only serve to stifle economic growth, not limit government spending.
If the president (any president) had a line item veto, we could at least hold his feet to the fire for the pork that gets passed as part of the business (and spending) congress is actually supposed to enact.
Too many people just go with the herd and agree that we’ve got to raise taxes, instead of having an honest debate over what the role of the government should be and taking a hard look at the spending that doesn’t fall under that role.
That is true Joe – but you have to start at $0 to make that work. You can cut taxes while you cut expenses, but you cannot cut taxes while over $9 trillion in the hole.
That being said, the Republicans are supposed to be the party of “small government” and “lower expenditures” – but look what they have done in the last 7 years. I am not sure a line item veto would have done anything, because a lot of the money that was spent was because of GW, not in spite of him.
Point well taken David, but at least while taxes are low I get to keep more of my money, but raising taxes while raising spending just perpetuates the problem. It’s all about me in the now. 😉
As far as Republicans being the party of small government, that’s a slight misnomer. Fiscal Conservatives (and libertarians) are for a small government, they tend to side more with Republicans than Democrats but that’s not to say that all Republicans are Conservative. In fact, the current crop of Republicans have proven themselves to be anything but conservative in many cases. GW included, but with no line item veto, people can always say things like “the transportation bill is desperately needed and that means we have to accept a bridge to nowhere to get it done.” With a line item veto, there’s no place to hide.
Very true, Joe, very true. 🙂
While I can agree that taxes will most likely be going up, and that spending will be as well, I can’t agree that tax cuts are the problem. with the tax cuts revenues actually increased. The problem is increased spending by the government and runaway government programs. And since its an election year the candidates will all be making all sorts of promises about things they’ll be “giving” the electorate – things that will cause our taxes to go up even further.
the economy is fine. the economy did expand the past 7 years, hard to see with all the doomsdayers saying over and over and over again that the sky is falling. we were supposed to be in a recession three quarters ago, then two quarters ago, then one quarter ago. i’m sure we’ll get there considering all the self fulfilling prognosticating going on. if the economy hasn’t been doing so well the past 7 years then i’m not sure why all the indices have increased over the past 7 years even with the current dip, but that is just me.
the post was heavily pro-dem over tones, yet the dems have controlled the house and senate the past 3 years and no one on either side has been willing to stop spending even in though the sky is falling. even under clinton’s budget surplus (republican control house and senate BTW), which didn’t do anything to the national debt BTW, also made speculative assumptions that gave way to increased spending and never came to fruition either. let’s also consider that even with the budget surplus, the national debt to gdp was higher under clinton than it was under bush. war costs always seem to include the normal costs of having and operating a military and for some reason don’t deduct that amount, so i’m not sure what the true figures are, but so what? the govt spends money that companies get that employ 10’s of thousands of people, that goes back, etc, etc. govt spending is a large part of our economy. so what if the dollar is weaker overseas? no one was crying when the dollar was strong, although it made our manufactured goods more expensive. we can’t have our cake and eat it too. sometimes things have to balance out, let foreigners buy more u.s. manufactured goods for a change so u.s. gets the benefit. let foreigners come to the u.s. and spend their money on u.s. tourism versus americans spending on overseas tourism. it’s as if people think we should be spoiled forever. and to top it off, no one was complaining when the economy was doing oh so very well the past 7 years, just like no one was complaining up to the tech bubble either. here’s something, both sides could stop spending so there wouldn’t be a need to raise taxes. you don’t need revenue if you don’t spend. to think that if either obama or clinton get voted into office will change much in terms of federal budget (not much the pres can really do in real terms), military operations (why do you think the u.s. hasn’t been able to stop committing forces to the Balkans even after mr. clinton said we’d only be there for 1 year and we are still there 12 years afterwards?),
from Pete: “with the tax cuts revenues actually increased”
That is dead wrong. The Laffer curve and supply side economics have been abandoned by mainstream economists and have been for years. The CBO, Treasury, and the Council of Economic Advisors all disagree that tax cuts pay for themselves in increased revenue.
Why do people keep clinging to this idea?
i press post too quickly. i’m rather tired of hearing people talk about the rich got richer. if the rich did get richer, then it is obvious the economy was doing well, otherwise, there wouldn’t have been money to get rich off of. getting rich also means there were plenty of people spending, perhaps too much spending. things don’t happen in a vacuum, there were more than ample opportunities for everyone across the board to invest; however, we had a lot of people choosing to spend and to spend beyond their means. there have been and are far too man people who chose to spend rather than to save, and somehow think that the govt should step in because the rich got richer. if you didn’t get richer over the past 5, 7, 10, 15, 20 years, then you spent too much and didn’t save/invest enough. 401k and ira investing is far greater, despite all the doomsday talk about negative savings rate (which BTW doesn’t include these figures). people, especially politicians on both sides, are taking a short term view, and as savvy pf gurus that we all are, should be looking long term and ignoring all the short term commentary. if the economy is bad, then save more rainy day cash. this is what i’ve been doing since seeing how many people were taking out interest only and ARM mortgages, instead of buying a house 3 years ago.
The Economic Stimulus Check Means Higher Taxes To Come….
Keep this in mind – although the government sent you $600, they will be coming back with their other hand wide open asking for even more. Nothing is for free, they say”¦….