·

To avoid fiscal cliff, let Bush tax cuts expire

By Jessica Chau

Here’s a letter to the editor from a Maine small business owner urging Sens. Snowe and Collins to vote to end the Bush tax cuts for the wealthy.  We also feature a good piece from U.S. News arguing for an end to the Bush tax cuts for the rich as part of a solution to address the fiscal cliff.

Letter: No injustice

Bangor Daily News, Ryan Toothaker, 10/10/2012

As a lifetime Mainer and owner of a small business, I implore our two U.S. senators to reject the tax and spending policies of their party, since it neither reflects the values of our state nor the best interests of small or local businesses.

Maine people believe in self-reliance but also in fairness and balance. A tax structure that asks proportionally more of a middle-class family than of a person with more means to contribute does not fulfill our expectations for good public policy. Contrary to the rhetoric coming out of Washington, the fact is that cutting taxes for billionaires instead of investing in our communities hurts small business!

Sens. Olympia Snowe and Susan Collins can demonstrate their well-earned reputation for political independence at the end of this year when Congress will debate trillions of dollars worth of spending and revenue measures. A key point of contention is whether to extend tax cuts originally passed during the early Bush administration for households making more than a quarter million dollars a year. (This represents only 2 percent of all taxpayers, 3 percent of small businesses). The pro-Maine and pro-small business vote would be no.

It would be better to use the hundreds of billions of dollars that would be generated by allowing the rates on top earners to rise slightly, which would reduce debt and pay for things like Medicare, college tuition assistance and road repair that support the middle class and promote broad-based prosperity.

 

To Avoid Fiscal Cliff, Let Bush Tax Cuts Expire

U.S. News, Chad Stone, 10/11/2012

The smart approach to addressing the “fiscal cliff”—the tax and spending changes scheduled to occur at year-end that would cut budget deficits sharply over time, but likely throw the economy into recession next year—is to replace it with a more fiscally and economically appropriate package. Specifically, we should let all the Bush-era tax cuts expire, scrap the automatic spending cuts (“sequestration”), and replace them with a balanced package that raises revenue and cuts spending over the long term while providing more deficit-financed stimulus over the next year or so to boost the weak recovery.

First, they should recognize that in its impact on the economy, it’s a “slope,” not a “cliff,” and that, even if all those tax and spending changes take effect temporarily, policymakers still would have some time in early 2013 to work out a responsible long-term budget deal that reduces deficits in a way that does not wreck the recovery.

Second, to strengthen the economy in the short-term, they should look to enact cost-effective stimulus measures—ones that boost demand for goods and services in the short term without adding significantly to deficits and debt in the longer term. They should extend two prominent expiring provisions for another year—emergency federal unemployment insurance benefits and the payroll tax cut. Or, better still, they should enact unemployment insurance and a temporary income tax cut targeted on the low- and moderate-income households who are most likely to spend most of any additional income they receive.

Third, to make progress on deficit reduction, they should let the upper-income Bush-era tax cuts expire permanently. That would reduce deficits by roughly $1 trillion over the next 10 years while having minimal impact on the recovery—those tax cuts have low stimulus “bang-for-the-budgetary-buck.”

 

Follow Americans for Tax Fairness on Twitter and Facebook.  Right now is the best time to spread far and wide that we just can’t afford to continue the Bush tax cuts for the richest 2 percent.