As this telling article from the Bangor Daily News points out, we are a society with striking differences between the rich and the poor. Minimum wage policy, tax policy, and changes in the demand and supply for skilled employees have exacerbated this income inquality to the point where in 2000, the top 1 percent of wage earners owned 10 percent of the nation's total income. The average income of American families has fallen from 2001 - 2004. The current administration's tax policies are adding to this problem. The article says:

Suppose that the administration's tax cuts, which began in 2001, remain in effect until 2015. Over these 15 years, more than half of the tax cuts - 53 percent - will go to people with incomes in the top 10 percent, according to studies commissioned by The New York Times. And 15 percent of the cuts will go to the top one-tenth of 1 percent of taxpayers. By 2015 the tax cuts, if retained, will provide average yearly tax savings of $23 to taxpayers in the bottom 20 percent. The wealthy will fare better. The top one-tenth of 1 percent of all taxpayers will save an average of $196,000 a year, or a total of $2.9 million over the 15 years. By 2015, the top 1 percent of taxpayers will pay a lower share of total taxes than they did in 2001.

It's time to leave this administration's failed tax policy in the past and develop new policies that will help to raise the quality of life of all Americans across the board.

The other day Vice President Cheney said before a group of conservatives:

"The evidence is in, it's time for everyone to admit that sensible tax cuts increase economic growth, and add to the federal treasury."

This Washington Post editorial reiterates what most analysts and economists know to be true: tax cuts do not magically pay for themselves, and they do not add revenue to the Tresasury. In fact, no economist has come up with the proof that the adminstration wants -- that tax cuts pay for themselves. In fact, as the Post says, "during the tenure of a fan of dynamic analysis, former White House economist Douglas Holtz-Eakin -- used a variety of different dynamic models and found only small economic effects from the president's tax cuts, a majority of them negative."

February 13 President Bush issued his 2006 Economic Report to Congress. The eleven chapters cover many issue areas including the workforce, retirement savings, the U.S. tax system, and the financial services sector. The chapter on taxation discussed the U.S. tax system's high corporate tax rate and double taxation of corporate profits. This attention reflects the Bush administration's dedication to extending low investment tax rates.

The report mentioned tax reforms that have taken place in other countries, including reducing corporate income rates, reducing taxation of capital income, and introducing flat taxes. It also mentioned two of the recommendations made by the President's Advisory Panel on Federal Tax Reform recommendations -- the Simplified Income Tax (SIT) and Growth and Investment Tax (GIT) -- but stated that each plan would require a large transition and that action on them will not happen any time soon.

OMB Watch has written an analysis debunking some of the statements made by President Bush in the 2006 State of the Union address. Be sure to check it out.

Last night President Bush delivered his annual State of the Union Address. Check back here later in the day for an analysis on the comments Bush made regarding taxes, the budget, and the economy last night.