Want to Spur Economic Growth? Invest in Low and Moderate Income Communities
Who deserves help in this troubled economy -- the rich or everyone else? That's the question at the center of debate around the proposed extension of George W. Bush's tax breaks for America's wealthiest few.
Over on the National Women's Law Center blog, there's an excellent entry into this discussion from Regina L. Oldak, Senior Counsel at NWLC, who argues convincingly that tax cuts for the wealthy indicate that America's got its priorities all wrong. Instead, she suggests, Congress should be doing more to strengthen our economy by helping the families who are actually struggling -- most notably, women headed families, for whom unemployment rates now stand at a 25 year high of 13.4 percent.
In an economic climate where twenty-five percent of men and thirty-five percent of women say they have $500 or less in savings (as a major national poll [pdf] from the Ms. Foundation and the Center for Community Change recently found), offering tax cuts to the wealthy really gets it backwards, notes Oldak. Low and middle income communities own the spending habits that will eventually help jump-start this economy; therefore, our economic policies should aim to provide these communities with the influx of cash they need to keep themselves, and our economy, afloat. Oldak writes,
Extending tax cuts for low- and moderate-income people can boost the economy because hard-pressed families spend nearly every additional dollar to make ends meet—which, in turn, creates demand for goods and services and thus encourages businesses to hire more workers. However, the very wealthy save more of the money they get from tax cuts because they already have what they need (and much of what they want). For that reason, the Congressional Budget Office ranks tax cuts for the very wealthy as the least effective option for promoting economic growth.
Instead of revitalizing these Bush era tax cuts for the rich, Oldak suggests, Congress needs to act now to pass "substantial measures that would create jobs and provide emergency assistance to families including the Jobs for America Act, additional funding for child care, restored funding for child support enforcement, and an extension of the Temporary Assistance for Needy Families (TANF) Emergency Fund." Those are measures that would provided much needed, tangible support to families who are increasingly finding themselves on the margins of society, unable to make ends meet -- and help stimulate an economy that arguably cannot recover without them.
Americans, whatever their income level, are eager to find stability and security in this roller coaster ride of an economy. But those who are struggling to put bread on the table clearly deserve greater levels of support from their government in times like these. It's time for Congress to get serious about taking a stronger role in making this economy work by investing in programs that benefit low and moderate income communities. The wealthy, as they always have, will find their way.