The average Bucknellian will lose thousands of dollars because Congress has voted against renewing President Bush’s first-term tax cuts. Bucknell graduates earning the average income will lose about $780 the year after they graduate if the Bush tax cuts are not made permanent. In Bucknell terms that’s 1,701 cans of Natty Light, 65 handles of Banker’s vodka, or 659 shots of José Cuervo tequila.
The Bush tax cuts are set to expire in 2010, which means taxes will increase to their 2001 level. When this occurs, the present and future incomes of Bucknell graduates will decrease by thousands of dollars. The tax increase will affect graduates of all income levels and professions and continue to cost graduates throughout their careers.
The Bush tax cuts are essential to helping Bucknell graduates pay for the expenses they will face once they leave the Bubble. After graduation, they must pay student loans, rent, utilities, and other basic living expenses. The money the Bush tax cuts keep in graduates’ pockets helps cover these costs and assists them in their attempt to move up the economic ladder.
Engineers will be hit particularly hard by a return to the old tax rates. An engineer earning the average income after graduation should expect to lose about $980 per year when the tax cuts expire. Chemical engineers will be the hardest hit, suffering an annual loss of roughly $1,150.
In addition to allowing workers to keep more of their incomes, the Bush tax cuts repeal the onerous death tax. The death tax would levy a crushing 55 percent tax on inheritance over $1,000,000 after 2010. This would place many family farms and small businesses at risk. Often farms and businesses are broken up and sold to pay the tax. This is particularly unjust because these assets have already been taxed.
Moreover, the Bush tax cuts provide many other benefits in addition to allowing Americans to keep more of their hard-earned money. When Bucknell graduates and other citizen spend their tax savings, they create jobs for the people who provide the goods and services that are purchased. Since the passage of Bush’s 2003 tax cut more than 7.8 million jobs have been created. The US economy has greatly improved because of the Bush tax cuts, and Bucknell graduates and other citizens have reaped the benefits.
Lower taxes also provide workers with greater incentive to work harder because they are able to benefit from their efforts. The entrepreneurial spirit is unleashed by these incentives: more businesses are started, more money is available for investment, and more jobs are created. This economic boom leads to an increase in tax revenues. This phenomenon is a result of the increase in spending and investments that occurs when people are allowed to keep more of their money.
The Bush tax cuts have been the foundation of the strong economic growth that our country has enjoyed during the past few years. During this period our economy has grown faster than that of any other industrialized nation, and our unemployment is at a historic low, falling to 4.4 percent this month.
The health of the US economy stands in sharp contrast to other industrialized nations with much higher tax rates than those of the United States. With close to nine percent unemployment, the economies of France and Germany exemplify the stagnating effects of high taxes.
While the Bush tax cuts have benefited the US economy by fostering growth and innovation, their most important contribution is that they recognize that Americans are more capable than government bureaucrats of spending their own money. Americans can use their savings to donate to charitable causes, invest in the stock market, or buy cases of Natty Light. They create economic growth much more effectively than any government agency.
The Bush tax cuts have been a key engine driving our nation’s economy. They have ensured low unemployment and higher prosperity for everyone in America, rich and poor, and from all backgrounds. These are not merely abstract ideas, but a concrete reality that will directly affect students as soon as they leave Bucknell. Congress must act soon to make the Bush tax cuts permanent. It is essential to maintaining the economic prosperity that our country has enjoyed over the past few years.