It's a shame that Texas is stuck with Senators Hutchison and Cornyn, Republicans who never fail to support corporations and big money over middle income Texans, and small businesses. Senator Hutchison lately used her bully pulpit to spread misinformation about the economy in her op-ed titled "Low taxes and spending restraint are key to economic recovery." The title and article are historically and economically wrong. It has been debunked by factcheck.org.
She claims the Bush tax cuts of 2001 resulted in job creation and increased economic activity. In reality they drove up the deficit, created no new jobs, were a huge giveaway to wealth and contributed to economic collapse. This "trickle-down" economics was so wrong for our country that it barely squeezed through Congress on budget reconciliation with a 10-year expiration. Bush then took us into two unfunded wars and held war spending out of the general budget so it wouldn't show in the deficit. These maneuvers were budgetary time bombs left to explode today. Yet Republicans pretend that President Obama created most of the deficit.
Senator Hutchison must think we're very forgetful. But, we remember, what she doesn't mention - the tax cuts that 95% of working Americans received in the stimulus last year. The Recovery and Reinvestment Act she voted AGAINST, contained tax cuts, credits and grants to individuals, businesses, states and local government to mitigate the recession. Republicans now claim the stimulus hasn't worked; in truth it kept us from falling into total depression, and saved or created millions of jobs, partially offsetting huge losses. Of the total $787 billion, Texas has spent over half of its $23.3 billion allocation. Those are our tax dollars coming back to help us.
The stimulus should have been larger (no thanks to Republicans) and more is needed now with economic growth still too slow and unemployment too high. Each dollar of certain stimulus spending, such as unemployment insurance, infrastructure improvements and assistance to state and local government, generates more than a dollar in economic growth. Tax cuts don't do that and they increase the deficit. The non-partisan Congressional Budget Office said that if we had done as Republicans wanted in 2009 we would today have fewer jobs and higher deficits. Still, Hutchison advocates the same-old same-old.
She falsely claims President Obama intends to raise everyone's taxes, calling it the "largest tax hike in our nation's history." Not true! The expiration of the tax cuts is coming up, but the Obama Administration proposes to keep the cuts that benefit middle America and small businesses. The taxes for incomes over $200,000 single and $250,000 per couple would rise a measly 3%. Only 3% of those above those incomes are small business owners.
They claim raising taxes will harm the economy and reduces job creation. However, tax cuts on high incomes do not create jobs or boost the economy. When those in that income range have extra income they tend to save not spend it. Also, historically when higher incomes were taxed at a much higher rate, our economy was strong.
When middle- and low-income Americans receive a tax cut, they spend it immediately. This demand for goods and services creates jobs and those jobs, in turn, create more demand and other jobs. Consumer demand accounts for 70% of the output of the economy. Plus, taxes are paid on those salaries, which helps reduce the deficit. We can only dig ourselves out of recession by boosting demand and fight deficits by building back a strong economy. Recently, CEOs were polled as to why they were not expanding their businesses and creating jobs now with the tax incentives they've been given. These business owners validated the demand-driven economy by saying they were holding off because they were uncertain that demand for their products and services was going to rise. Apparently, we need to create more demand not give more play money to the wealthy.
Senator Hutchison summoned our hankies to mourn the "unfair death tax." Give me a break! They call it a "death tax" to obscure what the estate tax really is, a tax on inherited wealth, the least deserved form of income. The heirs did nothing to earn it except pick the right parents. Historically, we have taxed large estates at a high rate in recognition of the fact that accumulation of such wealth is enabled by government infrastructure, economic rules, and subsidies. The heirs owe some of that largess back to us. Furthermore, this tax encourages charitable and philanthropic donations. This year the estate tax is zero, but it will revert to older rates next year because Republicans refused to negotiate on the estate minimum size criteria and the tax rate. Several bills are pending that capture this much-needed revenue while excluding small businesses. To please their large estate-holding supporters, the "Party of No" opposes them.
Republicans have destroyed their credibility by opposing every single measure to truly rebuild our economy. The last thing they enthusiastically supported was the TARP bailout for big financials enacted in the fall of 2008. Yes, that's right, the bank bailout was Bush's deal, not Obama's. Now, President Obama has been somewhat successful in getting that money back. And Republicans further damage their credibility by attacking deficit spending needed to boost demand. Yet when advocating tax cuts for the wealthy, they claim the deficit is irrelevant. And, America, when they repeatedly yelled "No" they were saying it to all of us!
Here's the bottom line: This recession was not caused by working Americans and small businesses, nor by the poor, homeowners, minority groups or immigrants. It was caused by the banksters, large corporations and Wall Street with the help of the government they dominated and from which they got tax cuts, deregulation and subsidies over a quarter century. Republicans want to keep that sweet deal going and they will demonize and misinform to do it. Democrats are applying the right remedies, but it is going to take some time. They're on our side so let's keep them working.