The difference, say truth-impaired asshats like Lamar Alexander (I’m so old I can remember when he was sane) and Eric Cantor (he was never sane), is partially that the Bush tax cuts were intended to last for 10 years. Uh huh, and that decade was about to run out, and… Also, of course, Cantor “has never believed that this type of temporary tax relief is the best way to grow the economy.” Cantor is loony, lying or an idiot. My choice is D, all of the above, but you’re free to differ. Anyone not rendered brain-dead by adherence to the silly, demonstrably-failed, regressive policy known as supply-side (a.k.a. “voodoo”) economics realizes that the way to stimulate the economy is to put more money in the hands of people who will spend it. Logically, that means if we’re going to do tax cuts, they should go primarily to poorer people, who will purchase things they otherwise couldn’t afford, rather than banking the difference.
The Republicans, whose rhetoric, even more than Democrats’, concentrates on manifestations of the Puritan work ethic, don’t really value work. Thanks to them, for example, capital gains and most dividends are taxed at a significantly lower rate than earned income. (This is why the “hedge fund exemption” is so outrageous.) And FICA taxes are ultimately regressive, since they apply only to the first $106,800 of income.
A DINK (dual income, no kids) family making $50,000 a year will pay $5961 a year (11.9%) in taxes, between federal income tax and FICA. (In all three hypothetical families, we’re assuming they don’t itemize, although of course the wealthiest family would be far more likely to do so, since the percentage of income necessary to make itemization work to their advantage would be negligible.) A second family, making $100,000, would pay $16,894 (16.9%) in those combined taxes. But what of a third family, making, say, $1,000,000 in earned income and another $19,000,000 in capital gains? Their total tax would be $3,202,479 (16.0%). Yes, that’s a lower rate than the middle-class family.
Allow the payroll tax cut to expire, and the $50K family will see a $1000 increase in their taxes. It would be $2000 for the $100K family, and $4272 for the $20M family (assuming both spouses made at least $108K; otherwise, the increase would be smaller). That already tells you something: that the increase is barely over twice as high for the last family as for the middle one, even though their total income is 200 times as much. But let’s look at those numbers another way: allowing those cuts to expire would raise the first family’s total federal income-related tax burden by close to 16.7%, the second family’s by 11.8%, and the third family’s by about .1%. The tax increase as a percentage of income would be 2% for the working class and middle class families, .04%, or 1/50 as much, for the wealthy one.
And this, ladies and gentlemen, is the kind of revenue enhancement the Republicans can get behind. I posted the AP article linked above on the Curmudgeon Central Facebook page earlier today. The first comment read, “If the GOP are for it, it must be a tax on the poor.” Well, actually, yeah. It’s a big increase on the poor, a fairly substantial one on the middle class, and an almost imperceptible one on the wealthy.
A caveat: I’m not convinced in policy terms that extending this cut is actually a good idea. I do think revenues need to be raised, and I don’t think allowing this short-term cut to actually expire ought to be off the table. Then again, I wasn’t the one yammering into every available microphone that raising taxes in any way would be the moral equivalent of allowing the Four Horsemen of the Apocalypse to gang-rape your sister. No, that was the guys now nattering about fiscal responsibility and fighting to raise taxes on the poor and middle class.
Here’s the deal. I’m willing to pay a little more in taxes if it’s part of a comprehensive approach to raise revenue and decrease the deficit/debt. Such a policy initiative would necessarily include closing loopholes, ending or drastically reducing subsidies of corporations making literally billions of dollars in profits, increasing the rates on capital gains, and returning the top marginal rate to at least near Clinton-era levels. But until and unless I hear something that sounds like genuine willingness to negotiate in good faith (and actually to compromise) coming from Boehner, Cantor, McConnell, et al., then I’m going to fight these disingenuous and venal corporate water-carriers for every penny.
More to the point, one of my most significant disappointments with the Obama administration is in how inept they seem to be in political as opposed to policy terms. The President’s use of the bully pulpit has been sporadic, truncated, and diffident. Here is a gold-plated, gift-wrapped, all-expenses-paid donation from the GOP. If Plouffe, Axelrod, Messina, Carney, and indeed Mr. Obama himself aren’t bellowing from the rooftops at every opportunity for the next 15 months that the GOP was perfectly willing to let the country default in order to save tax breaks for billionaires, but want to raise your taxes, Mr. and Mrs. America, they truly deserve to lose the next election. Unfortunately, the rest of us don’t deserve the inevitable result of their cravenness, timidity, and overall political ineptness.