Tax reform debate Essay Example | Topics and Well Written Essays - 750 words

Tax reform debate - Essay Example g all the economic woes that the Bush administration left have opted to extend the past administration’s tax cuts, in an effort to stimulate the economy and to fully recover from the effects of the great recession. This move is quite ironic as the 2 Presidents came from the opposing camps of Republicans and Democrats. Though they have pushed for the same tax agenda, Democrats positions are said to be Keynesian influenced, while Republicans are influenced by supply side theory, which they say is the complete opposite of Keynesians. Originally, it was the Democrats who were pushing for the tax cuts. Kennedy and Johnson’s administration in 1960’s pushed for tax cuts. However in recent history, the scenario was reversed Reagan and Bush both belonging to Republican have implemented tax cuts (Chuck). 1.On the positive note, the tax cut helped to stimulate the economy as people with low income were able to buy more than usual. Under Bush administration’s Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), the child tax credit was increased 100% ; estate and gift taxes were repealed and income tax rates were reduced. 2. On the negative side, critics argued that tax cuts have benefitted mostly the 5% of the US population who are paying about $470 Billion of the total income tax revenue, while the next 20% of the population pays about a total of $260 billion and the 3rd who comprised the 25% of the population pays about $120 billion and the bottom earners who comprised the majority 50% of the population pays a total amount of $35 billion collectively (David,2005) .By merely looking at the figures, its simple to see that tax cuts indeed benefitted the elite 5% of America’s population. 3. Consequently, tax cuts dramatically lessens government budget and increases public deficit and national government’s debt. Concretely the tax cuts under Bush administration have hurt badly the health sector. Americare reported that due to dwindling