Republicans are gnashing their teeth over Bush tax cut expirations

Supply Side economist Arthur Laffer, chairman of Laffer Associates,  created the Laffer Curve. Laffer warns of coming tax hikes when the Bush era tax cuts expire. Laffer was a Reagan era economist considered to be the father of discredited Supply Side economics.


• the highest federal personal income tax rate will go to 39.6 percent from 35 percent. this rate will affect the most affluent Americans. 

• the highest federal dividend tax rate pops up to 39.6 percent from 15 percent;

• the capital gains tax rate will hit 20 percent from 15 percent;

• the Estate Tax rate is restored  to 55 percent. Bush suspended the Estate Tax during during his presidency. 

“Lots and lots of other changes will also occur as a result of the sunset provision in the Bush tax cuts,” he wrote in the Wall Street Journal.

Laffer says the coming hikes — coupled with the prospect of rising prices, higher interest rates and more regulations next year — are causing businesses to shift production and income from 2011 to 2010 to the greatest extent possible.

In 2011, the first $ one million of an estate's value is excluded from this tax. Republicans like to refer to the Estate tax as a death tax and also suggest Americans are taxed twice because of income tax. The Estate tax, in fact, is the only tax at the federal level that taxes wealth.

Rightardia believes that the tax cut expirations will mainly affect the "have mores" which represent a big part of the GOP base.  Teh Bush tax cuts actually had a negative effect on the middle class.

The Bush tax cuts did not have any clear effect on the US economy and Bush era job creation stats were poor.

Of course, conservative media like NewsMax suggest the expiration of the tax cuts will "end life as we know it in the US."


Source: Newsmax and Moneynews.


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