Tax cuts for wealthy led to huge deficits

It is absolutely amazing to me that the talking heads on Fox News can get so many Americans to believe trying to raise top marginal tax rates to increase revenues is “redistribution of wealth” and “class warfare.” The fact is we have always had a progressive federal income tax system that taxes higher income individuals at a larger percentage thereby insuring the upper-income people would always pay the majority of federal taxes. However the top marginal tax rate used to be over 90 percent in the 1960s and was still 70 percent in 1980. Clearly, 90 percent was too high a tax rate, but when Reagan lowered the top rate to 28 percent that was obviously too low.

Reagan’s OMB director, David Stockman, has come out stating these low rates led to large deficits and contributed greatly to today’s huge debt. Clinton raised this top rate to 39.6 percent, and budgets were balanced, large surpluses were projected, and the economy was clearly not negatively affected (proven by the fact that our longest economic expansion in history was from 1993-2001).

The Bush tax cuts of 2001 and 2003 reversed these trends and again led to large deficits. These tax cuts also led to the fact that many Americans pay no federal income taxes today (although Republicans would have you believe that was President Obama’s doing). Bush’s Treasury secretaries, Paul O’Neill and Hank Paulson, have now agreed taxes (and revenues) must be raised.

The Republican tax cuts of the last 30 years also led to the fact that the truly wealthy (the upper one-hundredth of 1 percent — those with after-tax incomes over $25 million) have seen their incomes increase 600 percent over those years while middle class incomes have been relatively stagnant. Now that’s what I call redistribution of wealth!

Phil Williams

Palatine