Now Is the Time to Call In the No Interest Loans

By Richard Walrath and Patricia Johnson

Speaker of the House, John Boehner (R-OH) made the following statement on May 5, 2011, “Nothing is off the table except raising taxes”, as quoted on the speaker’s blog . The comment was made in connection with statements about whether or not Republicans would increase the debt limit. Republicans in the legislature have managed to convince themselves (and anyone that actually listens to them) that our national debt is totally ‘spending-driven’. The numbers speak for themselves.

We didn’t just suddenly incur a national debt; we’ve had a national debt for decades. For the 30-year period from 1978 to 2008 Republicans were in office for all but eight years when Clinton when in office. During that 30-year period, under Republican control, how many years did we add to the deficit? – try each and every year a Republican administration was in control.

The only time, in the entire 30-year period that we had a budget surplus was during the Clinton administration, and the very first year of the Bush presidency which was a carryover from Clinton.

You can look at the chart to see what happened during the ‘sunshine’ years of the Reagan presidency. He provided massive tax-cuts for the rich which did nothing other than dramatically increase the deficit during a period of time when the deficit shouldn’t have increased. There were no war costs during the Reagan presidency or other unusual expenditures that would increase the deficit.

Clinton left the White House with a budget surplus as far as the eye could see and along came George W. Bush with massive tax cuts for the ultra-wealthy and big business.

How many times have we heard the same song and dance from Republicans that tax increases “hurt job creation”? Where have they been for the past ten years? The first tax cut put in place was the first year the Republicans took over the White House and Congress from the Democrats.

The Economic Growth and Tax Relief Reconciliation Act of 2001 was passed to promote job growth and what happened when taxes were cut? Jobs were lost.

Since that didn’t work out too well another major tax cut was put into place two years later. The tax cuts in the Jobs and Growth Tax Relief Reconciliation Act of 2003 didn’t work out so well either resulting in more job losses and lower revenues for the country.

The tax cuts, by themselves, weren’t enough to send the country spiraling into the deep dark hole of recession, so we started two wars and dramatically increased defense spending.

What has happened in the past when we’ve gone to war with a country?

During World War I, the maximum tax rate (excluding those for “excess profits tax”) reached 77 percent. During World War II we reached 94 percent and during the Korean War taxes reached 92 percent and stayed at 91 percent for several years thereafter. From 1965 to 1970 the tax rate was 70 percent with special Vietnam War surcharges.

War Max. Tax Rate
World War I 77 percent
World War II 94 percent
Korean War 92 percent
1965-1970 70 percent plusVietnam War surcharge

Source: Internal Revenue Service

A normal person would ask why Republicans cut taxes on a regular basis if higher taxes are necessary during a period of war to reduce the excessive spending caused by war. The answer can be found in their back pockets.

The highest tax rate in this country has a direct impact on their wallet because, according to the Center for Responsible Politics, the majority of our legislators are millionaires, with more millionaires in the Senate than in the U.S. House.

The average wealth for a member of the U.S. House during 2009 (last data available) was $4.9 million, while Members of the Senate had average wealth of $13.4 million for 2009.

Where does your number fall? Are you a double digit millionaire yet or are you down at the bottom with single digit millions? Or are you like the majority of hard working Americans that are barely surviving from one paycheck to the next? When you compare the average wealth of our politicians to the average wealth of the population of our country it’s not real hard to figure out why “nothing is off the table except raising taxes”.

Bush spent eight years talking about cutting the deficit in half, when in fact; his legislation added $5.4 trillion dollars to the deficit.

Legislation passed by Republicans in the 8-years Bush was in office did nothing more than allow the wealthy in this country to obtain zero interest loans from the federal government in the form of astronomical tax cuts and tax loopholes. Have you tried to obtain a no-interest loan lately – believe me, it’s not going to happen for the average taxpayer.

When we consider the tax cuts, and tax loopholes temporary no-interest loans to the ultra-wealthy, and big business, courtesy of Republican administrations, it’s not too difficult to figure out it is now time to call in these no interest loans.

© 2011 Richard E Walrath and Patricia L Johnson

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