YAKIMA, Wa., December 11, 2012 ― President George W. Bush declared in his 2003 State of the Union speech that he was going to ask Congress to roll back taxes on investment profits and dividends earned. The rate went from 22.5 percent down to 15 percent.
His reason for the rollback of taxes was to stimulate small business and encourage wealthy people to invest, thereby, causing an increase in the number of jobs. Job creation was his mantra then, and it is the same today for Republicans and the Republican Party.
By December 2007, the Great Recession started and by 2010 the number of suburban households living below the Federal poverty line increased by a little over 53 percent.
There are many root causes to the Great Recession. The American economy is slowly unraveling. In addition to Bush’s investment tax rate roll-back, there is also The Gramm-Leach-Bliley Act of 1999 (GLB). The three republican bills repealed parts of the Glass-Steagall Act of 1933, which were the basis of a long-time banking industry success, free from corruption and collapse.
The GLB Act of 1999 allowed commercial banks, investments banks, securities firms, and insurance companies to consolidate. In simple terms, it deregulated the financial sector of our economy and put too much financial power in too few hands.
Deregulation of the financial sector lead to the housing bubble and subsequent collapse.
Large companies like Enron, Citigroup and Country Wide made possible the creation of financial instrument whose value were based on home mortgages–they were called Derivatives. When the housing bubble collapsed, these large, less regulated companies collapsed. Today, Enron and Country Wide are nowhere to be seen.
The economy that President Bush passed on to President Obama had been in recession since December, 2007. By July, 2009 the recession is thought to have ended.
President Obama for the last four years has been leading the nation out of recession, albeit slowly. At the moment, both the Republicans and Democrats are trying to find a common road to avoid the Fiscal Cliff.
After a costly, six billion dollar election, American is exactly at the same place as before the election; a stalemate in Congress and with the President.
And who will lose? The American people, that’s who.
As before the costly election of 2012, the Republicans are firm on “no new taxes.” The Democrats are equally firm in saying, “the rich must pay their fair share.” It has been reported 80 percent of the wealthy feel they should pay their fair share.
A majority of small business investors are not opposed to a reasonable increase in taxes. Increasing the investment tax from Bush’s 15 percent level to 18 percent is not something investors would be upset over. What they are upset over is “uncertainty.”
Uncertainty today is being caused by the President and the Congress.
It’s time to eliminate uncertainty. It’s time to compromise. And it’s time to bring our financial sector back under solid and sound regulation. Congress, Mr. President, you both need to act. And, act now.
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