Democratic Party Beliefs on Taxes
Tax reforms have seen numerous heated arguments and battles between political parties in the United States Congress. The two major opposing parties has voiced out their differing take on taxation and tax filing. The Democrat Tax Platform, deeply rooted to the Keynesian economic or aggregate demand, has always been for the consumers and advocated raising federal tax and/or state tax to fund the government in spending for good jobs that will help the American people. the Democrat’s tax reform gears more on the pro-working class and pro-consumers, centering on the needs of middle class citizens with their federal tax and/or state tax reform proposals.
The democrats believe that when the government funds a program, that program will generate revenue that will in turn help the economy. Any kind of spending, whether it is done by taxpayers or the government, will eventually revert back to aid in the economy’s growth. They propose to cut federal tax and/or state tax on working class and middle class Americans, but not the wealthy.
They oppose the Bush tax cuts that let the wealthy people become wealthier. The middle class citizens were given their priority as well as helping families face the economic challenges on their day-to-day living. They are greatly against increasing federal tax and/or state tax rates for middle class families including those working abroad. During the Clinton Administration, The Taxpayer Relief Act of 1997 gave way for lower income families to get the Per-Child Tax Credit. This is refundable and had paved way to more refundable tax breaks afterwards. They wanted to give middle class people tax breaks (tax deductions, tax credits, tax write offs or tax exemptions) that will not hurt the economy.
Other proposals from the Democrat Tax Platforms includes an expanded EITC (Earned Income Tax Credit), tax breaks for small business capital gains, tax breaks for senior citizens or the elderly who are earning less that $50,000 annually, tax credits for health insurance and tax breaks for college students in the service. With these proposed tax breaks, it only follows that the others not mentioned will have an increase to balance things out.
There are a few similarities on both political parties’ tax policies. Both believe that changing the marginal federal tax and/or state tax rates can yield favorable results. As opposed to the Republicans wanting to lower the marginal rates or tax brackets, wherein people grumble that the wealthy people will greatly benefit from that than the others, the Democrats propose to increase the marginal federal tax and/or state tax rates to have more budget for government project involving infrastructure, national security, transportation, communication and so on. This was met with a lot of grumblings as people believe that increasing federal tax and/or state tax rates will in turn burden taxpayers.
Just like the Republicans, the Democrats believe that the government should subsidize or give away essential services to keep the whole country running. However, many view subsidies as unfair and would often be used for corruption. Proposals by lobbyist for subsidies are always with vested interest.
Democrats believe that big companies and the rich are cheating their way from paying their taxes by employing tax shelters and corporate loopholes involving numerous ways to manipulate tax breaks for their own benefit. Even when supplied with guidelines on acceptable standard tax breaks before tax filing by the Internal Revenue Service (or IRS), there are still those who will abuse tax breaks.
Like most companies during financial economic crisis as what is being experienced globally, the only way to recoup considerable amounts of loses is through tax shelters. The Democrats, seeing a trend on the job sector, sees that because of certain tax breaks, more and more jobs are being shipped overseas. Outsourcing and investing on offshore companies are taking its toll on American people because the potential accumulated federal tax and/or state tax are lost. So, they stated that they will shut down the corporate loopholes as well as the tax shelters in order for the money generated from federal tax and/or state tax are utilized and will be able to provide a tax cut that will offer the needed relief for workers and families.
With their concentration on the middle class citizens, conservative feel that the Democrat Tax Platform is specific to just one class instead of taking all classes into consideration even if Democrats feel that the middle class citizens are getting less out of what was due them. Many have criticized the Democrat’s tax policies as wasteful and will not garner long-term revenue. Some has praised these same policies as selfless and humanitarian.
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