1. Argument – Inequality

1. Retain G.W. Bush tax cuts for individuals earning over $ 250,000 per year is in the interest of a Republic

2. Pro - Economics • Expiring the Bush tax cuts: • Increase income tax rate to 39.5% along with add. State & Local taxes. • Wealthy individuals/families with 50%+ in taxes • Lack effort & settle for lower paying job to ensure ↑disposable income = prevent mobilty of middle class. 1. Argument – Inequality

3. Pro - Economics • Tax Cuts for Businesses: • Start new businesses, launch innovation & accumulate capital • Boost businesses • Increase Investments • Hire more workers / job creation • Provide technical & professional skills needed. • ↓T => ↑Yd => ↑C => ↑AD 2. Argument- Unemployment • Tax Reductions in the 1960s Recession led to an increase of investments • The lower cost of capital and the investment tax credit created a boom in investments.

4. Pro - Economics • By increasing taxes, the government affects households’ level of disposable income (after-tax income). If the Bush tax cuts expire then disposable income decreases because it takes money out of households and it is the main factor driving consumer demand which account for two-thirds of total demand. • ↑Taxes => ↓ Disposable Income  • When consumer consumption decreases, we can expect that production no longer needs more labor which leads to an increase in unemployment. • ↓Consumption => ↑Unemployment   • The declining income hurts households by decreasing their savings and tax increase would directly cut job creation. 2. Argument continued...

5. Pro - Economics • SOLOW GROWTH MODEL Y = A ∙ f( K, L) 3. Argument- Boost the Economy

6. Pro - Politics • The Bush Tax Cuts refers to the changed the United States tax code passed during the presidency of George W. Bush. • The 2001 and 2003 act significantly lowered marginal tax on ALL U.S. taxpayers. • The lowest income tax rate was lowered from 15% to 10%, the 27% rate went to 25%, the 30% rate went to 28%, the 35% rate went to 33%, and the top marginal tax rate went from 39.6% to 35% • The Child Tax Credit went from $500 to $1,000. Background

7. Pro - Politics This combination of income tax rate reductions, a higher child credit and a reduction in the marriage penalty will make a difference for families in every part of this country. A family of four with a total income of $75,000 will receive a 19 percent reduction in federal income taxes, saving $1,122 per year, per family. www.nationalcenter.org Allowing families to consume or save more money Background

8. Politics - Politics • Under George W. Bush's tax cuts, "the rich" paid more in taxes in 2005 than any other time in the past 20 years. • After the initial cuts in 2001, the annual growth went from 0.3% to 2.5% in 2002. By 2004, the GDP was at the highest in 20 years.

9. Politics - Politics

10. Pro - Politics 1. Inequality • Income inequality has been on the rise since 1977. • Instead of worrying about income inequality, the government needs to focus on government spending rather then tax reform (Mark Thomas, 2007).

11. Pro - Politics 2. Jobs Created • June 2001: 136,873,000 people employedJanuary 2008: 146,407,000 people employedIncrease over about six and a half years: 9,534,000 people •                                                    www.politifact.com

12. Pro - Politics • In this poor economic conditions, the tax cuts needs  to be extened. 2. Argument • Without Bush Tax Cuts • By 2020, there will be a loss of 48,000 jobs and $29 billion lost in government revenues (NW Daily Marker, 2011). With Bush Tax Cuts By 2020, there will be an additional ONE MILLION jobs and government revenues will increase by $127 billion (NW Daily Marker, 2011).

13. If the tax cuts were to expire, the economy would pick up for a short time and then due to the ta increases and budget cuts, the United States would be thrown right back into another recession. Similar situation occured in 1995-1997 in Japan Schoopa, 331). The tax cuts should be extended at least until the economy picks back up and then we can reconsider either letting the Bush Tax cuts expire or continue with them. Income inequality has been on the rise since 1977 and does not play a major role in how our economy works. Conclusion

14. Con - Economics • Rise in inequality during the last decades • Poverty is also on the increase •  The economy is only benefiting the wealthy •  Middle class will not benefit enough from the tax cut & the wealthy will reap unfairly high benefits 1. Argument: Increased Inequality

15. Con - Economics 1. Argument: Increased Inequality

16. Con - Economics The Lorenz Curve, L of an income distribution shows for the bottom 100h/H percent of households, what percentage of the total income they have. 1. Argument: Increased Inequality % of income (Y) % of households (X)

17. Con - Economics 2. Argument: Increased Unemployment l = Labor w = Wage Tax Cuts Tax Hike

18. Con - Economics • Economic growth do not generate jobs or prevent rising unemployment • Bush’s tax plan = permanent change in tax structure • No economic growth in the short-term • Tax plan will reduce financial resources • Result: tax cuts yield inequalities in after-tax incomes 3. Argument: Economic Growth is not sufficient

19. Con - Politics • … • …. 1. Argument

20. Con - Politics • … • …. 2. Argument

21. Pro econ: • Top 2 tiers of income earners represent potential investments capital which is needed to drive up economic activity. • High taxes causes brain drain, loss of jobs, discourages savings and investment and promotes tax avoidance. • Capital flight • If income is not being invested, it is held in savings account which allow banks to lend. • Con: • The government could stimulate the economy more effectively by letting the high-income tax cuts expire and investing money the states earn in unemployment insurance and job creation programs Conclusion