Enjoy the economy — while it lasts. As we head into the midterm elections, the Democrats look poised to retake the U.S. House of Representatives for the first time since the 1994 Republican "Contract with America," and the Dems are within striking distance of taking control of the Senate, too. A Democratic takeover includes an agenda, expressed by House Minority Leader Nancy Pelosi, to undo the Bush tax cuts that are finally paying off in the American economy.
Since the controversial $1.35 trillion centerpiece of the Bush tax cuts was passed in 2001, Democrats have cried foul, claiming that these cuts only benefited the top 1 percent of the nation while squeezing the middle class. This claim is untrue. The lowest tax bracket had their federal income taxes cut the most, from 15 percent to 10 percent, a one-third decrease. Yet the highest tax bracket had their income taxes cut from 39.6 percent to 35 percent, only a 12 percent decrease. At the same time, the child tax credit was doubled, tax penalties for married couples were eliminated, capital gains and dividend taxes were cut to 15 percent, and the estate tax was reduced. Tax cuts have benefited the poor, middle-class, the rich, businesses and farms.
While the economy struggled through the first Bush term, the latest statistics have vindicated the Republicans. A robust economy has emerged after plowing through a continuous stream of setbacks, such as the collapse of the high-tech sector, the Sept. 11, 2001 attacks, wars in Iraq and Afghanistan, and Hurricane Katrina. By allowing individuals and businesses to keep more of their earnings, investment has skyrocketed, prompting steady economic expansion.
Unemployment is down from 6.3 percent in 2003 to 4.6 percent, with real wages rising faster than they have in five years. The stock market closed at its highest point ever last week. Tax revenue is up dramatically, with the federal government taking in $115 billion more than expected in 2006 alone. The deficit is $22 billion less than last year. All of these fiscal accomplishments are results of expanded production, increased hiring and renewed investment made possible by tax cuts.
As the Democrats engage in partisan demagoguery to paint Republicans as the party of big business and special interests, Democrats unfortunately have developed no tangible economic alternative. The House Democratic agenda speaks of instituting windfall profit taxes on oil companies, ignoring the reality that these profits are reinvested in exploration, development and alternative energies that hold the key to an energy-independent future.
Our own Democratic congresswoman, Tammy Baldwin, opposes a permanent elimination of the estate tax, which forces many small businesses and farms to be sold to pay the estate tax after the owner dies. The Democrats are running on an anti-Bush platform, not a pro-economy one. But an anti-Bush platform is no platform at all, and we should demand better.
Of course, the Republican Party probably deserves to lose power in one or both Houses of Congress after bungling the Iraq War, failing to unite over immigration, and its inarticulate and ineffective leadership. However, a change in Congress should not mean that the American people lose those things that the Republicans got right, and the tax cuts were most successful yet are highly vulnerable.
So when you vote, and I hope you do, do not simply heed the anti-Bush rhetoric espoused by flame-throwing partisans, but the numbers and realities of this economy. Vote for candidates who recognize the economic successes of the last few years, or lobby those who do not. The Democrats have chosen to posture themselves against this economic success, and we, as their constituents, can change this agenda. If we do not, we, like the Republicans, will lose this November.
Will Smith ([email protected]) is a freshman majoring in political science and religious studies.
