When President Clinton left office in 2001, Americans paid 20.6 percent of Gross Domestic Product (GDP) in taxes. President Bush twice cut taxes and gave major tax breaks to the wealthiest Americans, resulting in a reduction in our total federal revenues for each of the past two years to just 14.6 percent of GDP, the lowest rate in the last 60 years. Seventy percent of these tax cuts went to the wealthiest Americans. Bush created the myth, “You cut taxes and the revenues increase” which so many Republicans still believe.
Federal deficits are clearly a major problem today. Under Clinton with fair taxes on the wealthy our national debt, as a percentage of GDP, was reduced by 9 percent.
Under bush with extravagant tax cuts for the wealthy, the deficit increased by 20 percent (Congressional Budget Office). If we had continued to collect taxes since 2001 at the same percentage of 20.6 percent of GP as we did under the Clinton administration, we would have today an extra $4.5 TRILLION that could be used to reduce our deficit.
Many Republicans argue that raising taxes on the wealthiest would severly cripple small businesses that really do create the most jobs. Ninety-eight percent of small business owners earn less than $250,000 so increasing taxes on those earning over $250,000 would not hurt small business owners, but would actually help them tremendously. The very wealthy, like Bill Gates and Warren Buffet (top 400) only pay an actual tax rate of 17 pecent of their income, while middle class taxpayers like most small business owners pay a much higher rate through payroll taxes and regressive taxes like federal excise taxes. A fair tax rate on the wealthiest Americans would only help not hurt, all of the middle class including small business owners, and would also help create more jobs as President Clinton did. Under Cl;inton there were 22.7 million new jobs created, under Bush just 1.08 million new jobs were creatwed (Department of Labor’s Bureau of Labor Statistics).
Because of tax beaks for the wealthy, the number of people earniing over $200,000 and paying NO federal income tax has increased TEN times since Bush and in 2008 that total reached 22,256. The tax cuts to the wealthy hs resulted in massive federl deficits. While middle class incomes have remained flat, the after tax incomes for the wealthiest Americans hs doubled. The richest top one percent of Americans now control 48.4 percent of financial wealth.
Want to grow the economy, grow small businesss, and reduce the federal debt, just have the wealthy pay a fair effective tax rate.
Fred Berger MD
Ed Morris MD, PhD