The NYT via Common Dreams is reporting that the House version of the tax cut bill lowers the amount awarded to people who make under $50,000 ["House G.O.P. Tax Cuts Outdo Bush Plan in Favoring Wealthy"].
"The analysis by the Tax Policy Center at the Urban Institute and the Brookings Institution found, for example, that taxpayers with incomes of more than $1 million would get an average tax cut this year of $105,636 under the plan outlined on Thursday by Representative Bill Thomas of California, the chairman of the House Ways and Means Committee. Under the Bush proposal, the average cut for these people would be $89,509. By the same token, taxpayers with incomes between $50,000 and $75,000 would get an average tax cut this year of $734 under the the Bush plan and $712 under the Thomas plan; those with incomes between $40,000 and $50,000 would get an average cut of $482 under the Bush plan and $456 under the Thomas version. Similar disparities exist with the smaller tax cuts at lower income levels. Eighty-four percent of all taxpayers have incomes of less than $75,000."First off, how is giving millionaires more money while the rest of us struggle to pay the rent, heat our homes, and put food on the table, a benefit to the economy? This is completely illogical. Strangely, after having a conversation about the tax cuts with a family member yesterday it took me the better part of 30 minutes to find any specific data on the Web about who would benefit and who would not. Eventually, I did. There are some good parts to the plan – like raising the child tax credit by $400 and the end of the marriage penalty – which will help joint filers and working families with children [Hey, $8 a week per child can come in handy]. But the logic that lowering the investment and dividend tax from 20 to 15 percent will grow the economy is a false one. Giving people who already have a lot of money more will not do anything to build the economy. Bush and the Republicans are essentially rewarding the rich for already being rich.
Sure, some of that tax money could be reinvested in the stock market. But as we have seen, the stock market isn't the job creation sector of the economy. Without manufacturing, small business and consumerism are the sectors that are growing the economy. How do you expand consumer spending? By giving poor and middle class people - the ones who do most of the consumer spending - more of their money to spend on consumer items. How do you expand small business? By giving poor and middle class people more money to start small businesses. As well, you give poor and middle class people more money to save in their bank accounts so that the banks can loan money for small businesses. This is a no-brainer.
Of course Congress will cry poor and say they can't afford to give large cuts to the poor and middle class. But again, this is illogical. Closing loopholes in the tax code would provide billions that could be released to the working classes.