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- Subscribe - Contact Us - Rate Card - Place an Ad Valley&State Backpage O&E Sports Archives Classifieds Faith&Beliefs Obituaries Revels September 22, 2004 A vote for the economics of Bush By Stanley Jones Ashland An important consideration in deciding if our president is worthy of a second term is whether his economic policy has enabled effective job creation. George Bush claims his tax cuts have helped the economy rebound and that making those cuts permanent will spur the production of more jobs. His opponent, John Kerry contends Bush's policy benefits only the wealthy, squeezes the middle class and is not producing significant job growth. Serious job production requires tax-cut money stimulate the business of goods and services that involve significant U.S. manufacturing content. This means stimulating owners of the 900,000 or so small to medium-sized businesses that generate most jobs, to expand production and invest in new equipment. This is likely only if a marked rise in demand is detected and the longer term looks strong and sustainable. If extra cash were available, as it would be if less tax were paid, it provides the added incentive to tip them into doing this. The danger of tilting tax-cuts overly toward buying is a short-term binge. To some degree, this happened in 2003. Such a surge can be detrimental to job production since owners will not hire if they think the future unsustainable. It follows they will be more inclined to invest for the longer term if they themselves are in control of more of the stimulus money. The Bush administration addressed this issue in 2002 by giving everyone a tax reduction and/or an increase in tier threshold. The wealthiest, those with taxable income over $312,000, had their tier cut from 38.6 percent to 35 percent, a reduction of 9.3 percent. The next most moneyed, with income up to $175,000, were cut 35 percent to 33 percent, a drop of 5.7 percent. The 30 percent tier, affecting those with income up to $115,000, was cut to 28 percent, a drop of 6.7 percent. The 27 percent tier for those with income up to $57K was cut to 25 percent, down 7.5 percent. The 15 percent & 10 percent tiers did not change, but had their thresholds increased to 22 percent & 17 percent respectively. Kerry says he would increase tax on the top tiers in exchange for more relief in the middle. One can tilt stimulus toward investment or toward buying. The Bush administration obviously thinks the existing balance about right. Current national debt is a massive number. Yet is largely unavoidable under the circumstances. And is not anywhere near historic level in terms of percent GNP. Neither is it as great as was targeted for the period. Business growth accounts for this - the steepest in 40 years analysts say. Unemployment has declined, and according to Greenspan will continue to do so, albeit more slowly that many would like. Consumer confidence has risen. Inflation is low. House ownership is at an all time high. As are home resale values. Moreover, despite unprecedented calamity, 9/11, terrorist war, the dot-com collapse, corporate corruption and record oil price, our country enjoys a rate of growth the envy of the world. What then does this contentious job issue boil down to? It is this: Would the Kerry plan that proposes asking Congress to raise taxes on a sector of the job production community in favor of a middleclass rollback, create more jobs than the Bush plan that stays with a structure already producing positive results? DailyTidings.com Home Page Valley&State | Backpage | O&E | Sports | Archives | Weather | Classifieds Columnists | Faith&Beliefs | Obituaries | Revels | Subscribe | Contact Us Copyright 2004 Ashland Daily Tidings and Ottaway Newspapers All Rights Reserved Click Here Site Search: .:Advertisements:. RESOURCES - Mail Tribune News - ODOT Road Cams