Posts Tagged ‘tax cuts for the rich’

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Obama’s Wealth Redistribution-Based Fiscal Policy: Rob From Poor to Give to Rich

02.13.11

Already looking ahead to 2012’s fiscal budget, President Obama is proposing a major cut to heating subsidies for the poor to help aid them against rising energy costs.

This is just infuriating. It’s hard to argue against the fact that our country is further becoming a plutocracy when the top one percent of earners control nearly 34 percent of our nation’s wealth and when even the Democrats cut programs that help the poor while continuing to extend tax breaks to the one group of Americans who were hit the softest by the economic recession.

I still don’t get how anyone can swallow the rhetoric that the rich needed a tax break while we have a surging debt and deficit in the trillions. Sure, everyone would love to pay less in taxes; but it was passed off as if it would be un-American to do otherwise under the guise that if you give more money to the rich, they in turn create new jobs for everyone else. It’s a wonderful thought that many of the rich love to taut, but there is plenty of evidence to the contrary.

And now here we are.

Why isn’t it un-American to let families freeze in the winter because they have to choose between food and heat? Why are both parties so quick to throw the poor under the bus while ensuring that the rich keep even more of their money? Is $2.5 billion – which amounts to merely 0.21 percent of this year’s federal deficit – going to make us more fiscally solvent to the point that it’s worth affecting millions of lower-income families? And that’s more important for our economy – and our people – than raising taxes on the richest two percent of Americans by under five percent?

While the Obama Administration points out that these cuts reduce the budget back to 2008 levels; which sounds respectable and all but with average gas prices higher for the month of February 2011 than they were in February of 2008, energy costs are on their way up while unemployment stays above nine percent. Not a great climate to justify cutting assistance for rising energy prices.

I’m sure there are also plenty of other costs that will be added to our bottom line by cutting this $2.5 billion. The added stress on families coupled with either going without heat or going without food for some who simply cannot afford both could add to health care costs as the toll on their bodies makes them more susceptible to illness or injury. And with less assistance for their necessities (which just goes to the energy companies anyway, not directly out into the backbone of our economy that is supposedly built by small business) that’s less money going into the economy for local businesses and vendors. I’m sure that’s always the case when people have less assistance; however, it’s worth looking at to determine just how financially prudent this cut is when it only affects poor Americans in the midst of a deep recession that disproportionately affects poor Americans.

Not to say that the rich always have to foot the bill for all things. Don’t misunderstand this as me being in favor of taxing the rich every time the rest of the population wants something. This is about fairness. And when the rich enjoy billions of dollars in tax relief while basic necessities like providing adequate heat are taken away from the poor, that’s wrong. That’s un-American.

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Who Won in the Political Battle over Tax Cuts; and the Nature of Compromise

12.07.10

After scoping out the vast spectrum of reactions to the tax cut package that just passed through government, I’m left wondering where I stand on things.  I am still relatively new to this whole politics business and I find myself going “yeah, but” to both sides of the arguments (on the factual stuff, not the value-based ideology that gets tossed around a lot these days).

From what I can see, these are the major elements of the legislation:

  • 13 months of unemployment extension
  • 1 year of lower payroll taxes
  • EITC expansion
  • College tax credits
  • Estate tax reinstated but only affects the.25 percent of estates – those inheritances that are worth over $5 million
  • Tax rebates for the middle and lower classes

All of it adds up to about $700 billion added to the deficit.  For those keeping score at home, that’s roughly the size of the Recovery Act (aka, the stimulus).

So, where do I stand on this?

Good question.  Clearly there was compromise on the side of the Democrats in that they were against extending the tax cuts for the rich (who still would feel some of the effects of those proposed tax cuts, regardless, since all of their income under $250,000 would’ve continued to be taxed at the lower rate) and yet the tax cuts across the board is what got passed. Also the estate tax being reinstated but at a lower rate than before and only for a small amount of inheritances. Mark a couple in the win column for the GOP.

But there was compromise on the other side, too.  13 months of unemployment extension is a big deal, especially considering that it was paid for by the deficit, which is precisely what the Republicans did not want.  Throw in the college tax credit and the rebates to the middle- and lower-classes, and those are some wins for Democrats.

For those truly worried about the debt, well, it seems like those are the ones without any real silver lining other than perhaps the Bush-era tax cuts were extended temporarily instead of permanently, so there’s still a chance that the deficit-funded cuts could expire in two years.

There will be Democrats angry about this.  There will be Republicans angry about this.  It seems like from what I’ve read, the Democrats feel the most shafted.  Part of me agrees with that group; but, then part of me wonders: what exactly is compromise? You give up something and the other party gives up something, so you each get something but not everything you want.  Does it have to be an even split to be a successful compromise? Do you still have to feel like you “won” for it to be a negotiation you can live with?  And when it comes down to things like tax cuts versus unemployment benefits, are these exactly apples to apples?  Meaning: can you really trade one for the other and have it even be something you can weigh as one being equal enough to the other for their trade-offs to feel fair?

You can also define compromise as everyone being equally as disappointed.  It’s the cynic’s view of everyone getting something: everyone didn’t get something.  Which is fine so long as you also note that you’re not the only one who didn’t get something rather than just focusing on the items that you wanted but didn’t receive.

Either way: what’s done is done.  Some see a long-term strategy at play that, when spelled out, does make sense. But, is it a planned method to the madness, or is it just an attempt to find a pattern in the chaos?  I guess we’ll find out in a couple years, won’t we?

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Obama and Republicans Compromise on Tax Cuts to Keep Everything at Status Quo

12.03.10

With Obama essentially conceding the tax cut extensions for everyone including the richest Americans, he’s given into the situation that the Republicans set up into where he’s damned if he does, damned if he doesn’t.

If he pushed for the tax hikes against the rich, then he’s the socialist that they claim he is; but, if he extends the tax cuts and adds $700 billion to the national deficit, then he’s the spend-happy left-winger who has no regard for the massive debt that they claim he is.

Let’s just look at the facts of the story:

QUICK RECAP:

Republicans are all for fiscal austerity when it’s for a $56.4 billion tab that affects the middle class but not when it’s a $700 billion bill for the top one-percent, wealthiest Americans.

I still don’t get how anyone can say that the GOP is the fiscally responsible party doing the bidding for the average American based on these positions they’ve taken.

Now, there will be negotiations in the final bills that are passed.  The one thing different about the tax cut extensions that will most likely end up passing would be that the GOP wants them to be permanent while the current plan would have them be temporary — probably two to three years long, at which point I’m sure we have this same argument to look forward to (unless it’s a Republican president at that point, which could be what the GOP is planning on so that they can then make them permanent at that time).  Dems are also looking to add in help for people paying back tuition and for small businesses who hire the unemployed.

These concessions by Obama haven’t gone over well with his fellow Democrats in Congress:

Sen. Tom Harkin, D-Iowa, said he would oppose legislation that cuts taxes for upper-income taxpayers, even if it includes an extension of unemployment benefits and the accompanying tax cuts for the poor that the administration is seeking.

I get Harkin’s frustration, but he’s doing nobody any favors by digging his feet in to combat the Republicans digging theirs in.

So after all of this political theater, I predict:

  • Tax cuts extended for everyone

  • Unemployment benefits extended for another year

  • GOP continues to blame Democrats for being spend-happy liberals

  • Debt and deficit keeps ballooning out of control because no one in either party will take the political heat associated with the anger and negativity that will come from all sides when the drastic cuts and tax hikes that are necessary to balance the budget need to be made

Pretty much status quo.

Photo courtesy of snty-tact via Wikipedia Creative Commons.