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Even for Middle Class, Tax Cuts Dig Deficit Deeper
That left a defensive Boehner telling CBS’s “Face the Nation’’ on Sunday, “If the only option I have is to vote for some of those tax reductions, I’ll vote for them . . . But I think that’s bad policy . . . we’ve got to cut spending.’’
But lest you think Obama is “winning’’ and Boehner is “losing,’’ the context of all this must not be forgotten. America will lose no matter what. Obama is still upholding one of the most regressive Republican fiscal policies in modern times. Boehner complained Sunday that the Democrats “haven’t reached out to us for the last 20 months.’’ But Obama more than reached out as a candidate. Looking for that sweet center of middle-class appeal, he promised, “If you make $250,000 or less, we will not raise your taxes. We will cut your taxes.’’
The cost of the 2001 and 2003 Bush tax cuts has been enormous and will continue to corrode the American economy.
In 2008, in the middle of the presidential campaign, the Center on Budget and Policy Priorities said that the Bush tax cuts “have been the single largest contributor to the emergence of substantial budget deficits in recent years.’’ The center said the tax cuts added about $3 trillion to deficits between 2001 and 2007.
Making them all permanent, as the likes of Boehner would prefer, would cost the Treasury $4.4 trillion over the decade, including interest on the federal debt, the center said. The Tax Policy Center of the Brookings Institution and the Urban Institute said that while Obama’s pledge to cut taxes was less than presidential rival John McCain’s, Obama’s plans would still boost the federal deficit by $3.6 trillion by 2018 (McCain’s would have increased the debt by $5.1 trillion).
While Obama is saying that repealing the tax cuts for the most wealthy Americans will add $700 billion back to the Treasury, that only begins to whittle away at the $4 trillion value of the cuts. Moreover, there is no evidence that tax cuts did anything to boost either the economy or personal wealth. According to the Center on Budget and Policy Priorities, median income in 2006 was $1,300 below its level before the 2001 cuts.
Yet, taxes are such a third rail in American politics that Obama felt he had no choice but to act Republican even as he was wooing liberals with his stances on Iraq and the environment. There has never been an honest discussion about what the tax cuts, even for the middle class, will cost us in the long run.
Last week, the new World Economic Forum’s global competitiveness index found the United States to be slipping in global competitiveness, with a major reason being our huge deficits. Ending the tax cuts for the wealthy now is only a first step. Ending the notion that tax cuts are good at all is the next.
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Show AllThe U.S. deficit is not a crisis, in comparison to many other major industrial nations it is still on the low side. This is a canard used to try and raid Social Security, and other nefarious goals. Certainly taxes should be raised on the rich: forget the piddly amount Obama-Biden propose -- let's got back to the 1970s, the economy did just fine with greater taxes on the filthy rich.
For more info. on the deficit, see the work at the Center for Economic and Policy Research: www.cepr.net
If Obama was serious about reducing the deficit his "deficit reduction commission" (DRC) would have already presented proposals for ending all the Bush tax cuts.
To date the DRC has been solely focussed on gutting Social Security and Medicare. Social Security is a stand alone program that has never contributed to the deficit, nor will its gutting contribute to reducing the deficit. The DRC therefore deserves its nickname...the catfood commission. Its goal is to gut Social Security to provide more corporate welfare money for banksters at the expense of working class Americans who will be dumpster diving for food and living under bridges.
Exactly. Repeal the REAGAN tax cuts!
Or back to the 1950s, when top marginal tax rates were over 90%, and CEO pay was not 500 times entry-level pay, but 20 times.
Which is still ridiculously distorted - why does one need 20 times as much money as another person?
Or a billion times as much! Even greed-drugged sociopaths should recognize the inevitable crash of such a gigantically distorted system.
They not only defend what they "have" but strive to expand their "ownership" of EVERYTHING and reduce everyone else to utter hopelessness. What fools!
WEBWALK: Taking your wise analogy a step further... a lot of these human shits take those mega-bonuses even when their companies are NOT showing any profit or prosperity. Others are only too willing to play the role of henchmen, cutting jobs so they can take a huge retainer for the "art of the deal."
My consolation in this phase of moral depravity in high places is the Law of Karma. When these individuals recognize the way they took advantage of others, thought little of consigning struggling families to fiscal misery (and worse), just so they could have a fancier home and car... the measure of what they traded in place of the sacred will take lifetimes of action and personal sacrifice to balance.
The moral depravity is a feature of the system, and permeates everything at all levels. The Wall Street people and CEOs taking huge salaries and bonuses are not doing anything any different than bosses and owners at all levels of society are doing. It is the system, not a "few bad apples" nor "greedy elites."
Yet even though the social arrangement of control or be controlled, dominate or be dominated, with wealth, capital, as the method for controlling others, still that does not make it "human nature" and therefore inevitable.
There is something very wrong with the way we are organizing society right here and right now. It has not always been this way, and cannot last.
(I am expanding on your remarks, not contradicting you.)
I have a lot of respect for Mark Weisbrot and Dean Baker at CEPR, I read them regularly. And, while I think the deficit IS BEING EXPLOITED to cut Social Security (which has been looted to, among other things, subsidize tax cuts), I do think the deficit (and more specifically the DEBT) IS a problem. You can't continue spending more than you take in.
But the major point here is the idea that TAXES ARE **NOT** INHERENTLY EVIL. But that's what Luntzian language and people with little critical thinking leads to. All a politician has to say is "tax cuts" and he gets votes. (Never mind that they are only alluding to INCOME tax - a progressive system, where cuts disproportionately favor the wealthy - and not things like PAYROLL taxes - a regressive tax which disproportionately burdens the poor.)
But some progressive politician has to have some balls and stand up and say, you want lower taxes? Fine - let's ELIMINATE taxes. That should make you happy ... unless of course you want your garbage collected, your streets protected, your fires extinguished, your kids taught, etc. We have to retrain voters to understand taxes are necessary - and it's even more necessary that they be apportioned fairly. What good is lower taxes if the result is a weaker economy and YOU HAVE NO JOB.
Economics 101 suggests gov't RAISE taxes when the economy is booming, and LOWER taxes when it is struggling. But all our politicians argue is, when the economy is good - it's "your money" the gov't snhould't keep your hard earned money; and when the economy is bad, "we need to stimulate the economy."
So someone with balls needs to stand up say, okay - why don't we just ELIMINATE TAXES ... and play out the end. TAXES ARE NOT EVIL, and any politician who tells us otherwise, is just a scam artist trolling for votes (and suckers).
MARIUS: There are fundamental inequities affecting tax scales and pay scales, and THAT is the key HUGE issue that is not being adequately addressed.
When the rich have seen enormous gains over the past 30 years, profits that only trickled down as raw sewage, and when social security taxes stop at $106,000 a year (where there is a cap), then obviously these metrics are NOT working.
Furthermore, estimates that well over 2 trillion dollars were just HANDED to bankers who then went off on a "spread the wealth" around feeding frenzy that was to finance what sharks are to fish-kill. And then, too, there's that awful fact that the MIC cannibalizes HALF of the income taken in.
These factors explain why THE MONEY has gone missing!
So it's all about PRIORITIES. However, given that candidates require air time, and the deregulation of media meant that genuine public service announcements would become rare... candidates must purchase TV, print, & Radio advertising. It remains a statitical near-certainty that the candidate with the most face time in media, generally wins. And the price of primetime exposure is HIGH!
Therefore candidates enter into a quid pro quo relationship, not with the public, but rather their paying sponsors. And therein lies the rub.
Money has corrupted the system ENTIRELY. The present Supreme Court sees no problem with this, and has in fact, made it easier for greater corruption to ensue.
It's an AWFUL state of events... yet other factors promise that collapse that will soon make "business as usual" (amoral as it's become) impossible.
What earthly good is a tax cut going to do people who are out of work? I have only been able to find part-time work and, trust me, the amount of money from a 'tax cut' won't get me anywhere near the professional salary I once had.
One of my neighbors who's a dyed-in-the wool Republican told me he loves Bush. Why? Because that ridiculous inheritance tax "holiday" that operates this year has provided him with an embarassment of riches. The family's rich Aunt died and he told me her estate is valued at $5 million. He will not be paying a PENNY of estate taxes on it. Meanwhile his son has been collecting food stamps and unemployment due to limited work conditions in the state.
My wealthy sister (corporate) who resides in La Jolla told me she loves Obama because due to one of his policies, a bank called her and offered a lower interest rate. She and her husband did not solicit this, but told me it's based on one of Obama's programs (involving the banks). So it is not some poor family struggling to hold onto its home that is getting the benefit, but my wealthy sister who will save $600 a month on her mortgage payment.
My point here is that I see in these two instances, persons who do not NEED help getting more than their share, while those in dire need of real government assistance get nothing.
It's a paradigm that is designed to reward those who have at the expense of those who have not.
Shades of the tune, "God Bless The Chile That's Got His Own." Calvinism is what's being served on the U.S. fiscal policy menu...
Just as all the poor were sent to that stadium as the New Orleans flood waters rose, I'd like to see every congress person locked inside, intense fumes of marijuana circulating, and nothing but re-runs of "A Christmas Carol" playing. The doors don't open until some SANE and JUST policies come out of that "stadium." Fantasy, perhaps... but it sure would make for an improvement over the insanity that passes for viable policy these morally corrupt days!
Here's another joke.
Tax cuts for 'small businesses' will create more jobs.
According to the Bureau of Labor, nearly the exact same number of small businesses that start-up each year go belly-up each year.
Hence, zero job growth.
Not to mention we're already up to our necks in 'small businesses,' and that the average 'small business' loses money for the first 2 years, and that the average 'small business' non-management wage is $9/hour.
I mean - 'The future of the American economy is bright!' says Warren Buffett. 'Of course there's a Class War - and my Class, the Upper Class, is winning!' says Warren Buffett...
Oh no, it's those "terrible deficits again!" Is this a right wing cheer leading article? Give it a rest. We need a bigger deficit, and the sooner the better, and it should be spent on those of us who actually earn a living and those not having any opportunity to do s not the parasites in the Pentagon and on Wall Street.
"From each according to his ability and to each according to his need" says it all. If this be Marxism, then make the most of it.
AD
Confiscation is the answer, not taxes.
I am not claiming that to be "practical" or "realistic" but it is morally and socially the right thing to do, and we could certainly be advocating it.
You should never start negotiations by offering the bare minimum you would settle for. Yet progressives and liberals chronically do exactly that, under the ruse that we are being "practical" and "realistic."
How about the wealthy, the ruling class, be "practical" and "realistic" for a change? Why must we always be? "Practical" and "realistic" means we lose, we surrender before the battle begins, that is all that means.
The only reason that anything is not practical or realistic is because we do not have the power to make those things practical and realistic, and because the people who do have power, and their apologists and defenders among us, are working night and day to make sure those things we need will never be practical or realistic.
I say confiscation of the ill-gotten billions is the answer, and returning it to the working class people who created it in the first place.
TWO: Great post! You've got a mind big enough to wrap itself around a great many factors and coalesce them into a unified analysis. Bravo!
I agree with what everyone has said, with a few trivial exceptions. What troubles me is the expression of moral outrage (which is entirely justified) at the expense of practical solutions: How do we counter this madness?
Arguing that the system is immoral (unfair to the less fortunate, etc.) may have done some good, but it doesn't seem capable of really changing the system. My view is that liberals need to make a comprehensive, objective argument based on existing evidence presented in the simplest, clearest way (Common Dreams articles are way too short). This should not be that hard to do, as the evidence already exists in abundance. I'm no economist, but I've seen others (e.g., Krugman) make simple illuminating points based on relatively simple data and graphs. Still, articles such as Krugman's remain too short, though this is a problem that might be circumvented given the lack of space limitations on the internet. If we were to actually point out that Reaganomics didn't really work, that the disparity between rich and poor has increased ever since, that Clinton's tax increases facilitated the economy, while Bush's were the largest contributor to the current deficit, that reducing taxes on the super rich doesn't often lead to more jobs, and so on. Most important, we need to put this information together in a single, statistically tight manuscript, while explaining it in simple enough terms that people can understand it. It needs to be aimed at everyday people, explaining how and when tax cuts have damaged their lives.
Jackson does a fairly good job of this, as when he documents estimates based on Obama's, McCain's, and Boehner's plans. But he states that "there is no evidence that tax cuts did anything to boost either the economy or personal wealth. According to the Center on Budget and Policy Priorities, median income in 2006 was $1,300 below its level before the 2001 cuts." This is a good piece of evidence, but not nearly good enough -- we need multiple pieces of evidence contradicting the efficacy tax cuts, because it's too easy for people to dismiss a single example.
Also, we need to put intense pressure on the media, which has spread and facilitated all the myths noted above (e.g.,http://www.fair.org/index.php?page=4153)
not true
middle class spend their money, this would stimulate economy
tax the rich
not true
middle class spend their money, this would stimulate economy
tax the rich