It is little bit ironic to see the Democrats in Congress talking about extending the Bush tax cuts before the August recess (read before the November election). The Hill today reported that Ways and Means Committee Chairman Sandy Levin (D-Mich.) would like to extend some of the Bush tax cuts before the August recess. These were the tax cuts that the Democrats continually labeled "tax cuts for the rich." Well, at some point the Democrats have had an Epiphany and realized that a large part of those "tax cuts for the rich" were actually for the middle class. If those tax cuts expire, almost everyone's taxes will go up and the voters might actually notice that. Whoops. Please take a look at the chart below.
This picture, from the webite of Heritage.org illustrates the Laffer Curve. Simply put, the Laffer Curve illustrates the fact that when you lower taxes, revenue goes up. Our problem is not that our taxes are too low; our problem is that we are spending too much.
At any rate, it will be interesting to see what Congress does with the "tax cuts for the rich."
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