Tax Cut Lies: The Day The News Died

[FORD]

The President's Last Stand Is No Stand at All: Why the Tax Deal Is an Abomination

By Robert Reich

08 December 10




The deal the President struck with Republican leaders is an abomination.

It will cost $900 billion over the next two years - larger than the bailout of Wall Street, GM and Chrysler put together, larger than the stimulus package, larger than anything that's come out of Washington in years.

It makes a mockery of deficit reduction. Worse, the lion's share of that $900 billion will go to the very rich. Families with incomes of over $1 million will reap an average of about $70,000, while middle-class families earning $50,000 a year will get an average of around $1,500. In addition, the deal just about eviscerates the estate tax - yanking the exemption up to $5 million per person and a maximum rate of 35 percent.

And for what?

Wealthy families won't spend nearly as large a share of what they get out of this deal as will middle-class and working-class families, so it doesn't do much to stimulate the economy.

The deal further concentrates income and wealth in America - when it's already more concentrated than at any time in the last 80 years.

The bits and pieces the President got in return - extended unemployment benefits, a continuation of certain small tax benefits for the middle class - are peanuts. After last week's awful jobs report, Senate Republicans would have been forced to extend unemployment insurance anyway.

It's politically nuts. Polls showed most Americans are against extending the Bush tax cuts for the wealthy.

It would have been a defining issue for the President to use to show whose side he's on (the middle and working class) and whose side the Republicans are on (not the middle and working class). And given that the House turns over to Republicans in January, the President probably won't have another chance like this one.

It loses him even more of his "base" - by which I mean people who think of themselves as Democrats and are committed to the ideal of equal opportunity and don't want the nation to become even more of a plutocracy.

It makes him look weak - Republicans got everything they wanted. And when a President looks weak, he is weak.

House and Senate Democrats should reject this abomination.

The President should get himself new advisers.

Robert Reich is Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written twelve books, including "The Work of Nations," "Locked in the Cabinet," "Supercapitalism" and his latest book, "AFTERSHOCK: The Next Economy and America's Future." His 'Marketplace' commentaries can be found on publicradio.com and iTunes.

[Nitro Express]

We all know why Obama really went with the Republican tax breaks. The election. Obama has lost the swing vote and will not win a second term without it. If the economy doesn't pick up, he can blame the Republicans because it's their program and then claim to be the good guy who tried to bring the country together.

It's all politics.

[Nitro Express]

Research from (the University of California at Los Angeles) shows that it should have been over in 1936, but dragged on for seven years because of intervention in the labour market: "In an article in the August issue of the Journal of Political Economy, (Lee) Ohanian and (Harold) Cole blame specific anti-competition and pro-labor measures that Roosevelt promoted and signed into law on June 16, 1933. 'President Roosevelt believed that excessive competition was responsible for the Depression by reducing prices and wages, and by extension reducing employment and demand for goods and services,' said Cole, also a UCLA professor of economics. 'So he came up with a recovery package that would be unimaginable today, allowing businesses in every industry to collude without the threat of antitrust prosecution and workers to demand salaries about 25 per cent above where they ought to have been, given market forces. The economy was poised for a beautiful recovery, but that recovery was stalled by these misguided policies. High wages and high prices in an economic slump run contrary to everything we know about market forces in economic downturns, Ohanian said. By artificially inflating both, the New Deal policies short-circuited the market's self-correcting forces.' By 1939 the US unemployment rate was 17.2 per cent, down somewhat from its 1933 peak of 24.9 per cent but still remarkably high."

[BigBadBrian]

Tough times call for tough solutions and raising taxes is going to have to happen at some point to pay for all this shit!!!!!! No one wants to hear that or even talk about it but what other choice will we have? At some point we have to pay. Both the Demos and Repukes refuse to acknowledge this simple fact of life.

President Clinton's Council of Economic Advisers in 1994: "It is undeniable that the sharp reduction in taxes in the early 1980s was a strong impetus to economic growth."

[ZahZoo]

The point that most people are missing is that we are broke and owe Trillions of dollars to other countries...........2 failed occupations, spending like a drunken sailor on shore leave, and an infrastructure that's falling apart. People are staying on unemployment for 2 years with no end in sight! We're spending 60% + or - of our GDP on military spending and creating no new jobs for the 8 or 9 million people who can't or won't find work.

Tough times call for tough solutions and raising taxes is going to have to happen at some point to pay for all this shit!!!!!! No one wants to hear that or even talk about it but what other choice will we have? At some point we have to pay. Both the Demos and Repukes refuse to acknowledge this simple fact of life.

There's no denying the debt... but I don't see raising taxes as a viable solution. There has to be some real serious spending cuts and controls in place long before I'd advocate giving anyone currently in Washington another dime to mismanage. Throwing more money to be wasted isn't going to bring down the debt at all.

Look at the fucking "sweetened" deal Obama and Clinton are now pushing... extending only the Bush era tax cuts by themselves would at least not hurt the economy any worse than it is... but no, these idiots want even more crap!!!

And you want to consider raising taxes to give the government more to play with..?

[Dr. Love]

return on investment for various programs

[FORD]

Ain't it funny that, out of the top three items on that graph above, food stamps and unemployment have been cut, and infrastructure (i.e. an FDR-style public works program) is what they have as of yet refused to do. And two of the biggest losses on that graph - corporate tax cuts and tax "cuts" for tax dodging billionaires, are the things that continue to get all the attention.

Of course the one thing not listed at all is "useless wars in shitholes on the other side of the planet". That has been a negative return on investment from day one.

[sadaist]

Wealthy families won't spend nearly as large a share of what they get out of this deal as will middle-class and working-class families, so it doesn't do much to stimulate the economy.

So? What will these wealthy families do? Convert it to gold and bury it in the back yard? Stuff it under their mattress?

I hate the argument that they won't spend it. Even if they put it in the bank, that's a form of spending. Now that bank has more money, for more loans, more employees, more branches, offices, etc.

Maybe they'll buy a new mansion. Well that adds construction jobs, maintenance jobs, plumbing, cable, electrician, pool builder, landscaper, painters, furniture makers, carpet makers, glass window makers, lumberyards, concrete layer, and yes....more property taxes and income taxes from all those jobs they are helping to support.

How about a yacht. Someone has to build it, make all the great stuff that goes inside, run it, keep it in good condition at the harbor, etc.

Maybe an investment portfolio. Well that money goes to buy stocks of businesses that hire people and typically provide a service or make a product.

Lowering tax rates doesn't give anyone money that just magically gets taken out of circulation because they sit on it secretly. The same amount of money will still be flowing through the economy. Just that people will decide where & how to spend it rather than the government.

So whats better? The millionaire using his money and allowing all these little guys to earn enough money for a sandwich? Or the government taking the millionaires money so they can give the guy a card thats good for 1-free sandwich? Either way he gets a sandwich, but if it's the government one, they will tell you what kind of sandwich it has to be, how healthy it has to be, and when & where you can eat it.

[Nickdfresh]

President Clinton's Council of Economic Advisers in 1994: "It is undeniable that the sharp reduction in taxes in the early 1980s was a strong impetus to economic growth."

What about the increase in taxes in the early 1980s?

And what about the "Great Recession" early 2000s tax cuts failed to prevent?

[Nickdfresh]

But the manufactured war was not a democrat.

....

We argue in spades about that if you take Vietnam into account. But then, it was Ike who actually got us involved...

[Seshmeister]

Render unto Caesar the things that are Caesar's, and unto God the things that are God's.

I think that's a key line in the New Testament.

It's one of the clearest examples and absolute proof of the man made use of the religion as a means to exercise power and why it was invented.

Emperor Constantine was a clever cookie...

[Seshmeister]

We all know why Obama really went with the Republican tax breaks. The election. Obama has lost the swing vote and will not win a second term without it. If the economy doesn't pick up, he can blame the Republicans because it's their program and then claim to be the good guy who tried to bring the country together.

It's all politics.

To an outsider it also demonstrates the power of the 'American dream' bullshit.

A lot of Americans seem to think that they too could one day be one of the 1% at the top who have 80% of the cash when every bit of evidence shows that there isn't a flying fuck of a chance short of a lottery win that they ever will be.

Brainwashed by the rich media owners or just plain idiotic dreaming the end result is you get a huge amount of people that vote against their own self interest.

It happens in other countries too but the US is much more extreme.

[Seshmeister]

So? What will these wealthy families do? Convert it to gold and bury it in the back yard? Stuff it under their mattress?

I hate the argument that they won't spend it. Even if they put it in the bank, that's a form of spending. Now that bank has more money, for more loans, more employees, more branches, offices, etc.

Maybe they'll buy a new mansion. Well that adds construction jobs, maintenance jobs, plumbing, cable, electrician, pool builder, landscaper, painters, furniture makers, carpet makers, glass window makers, lumberyards, concrete layer, and yes....more property taxes and income taxes from all those jobs they are helping to support.

How about a yacht. Someone has to build it, make all the great stuff that goes inside, run it, keep it in good condition at the harbor, etc.

Maybe an investment portfolio. Well that money goes to buy stocks of businesses that hire people and typically provide a service or make a product.

Lowering tax rates doesn't give anyone money that just magically gets taken out of circulation because they sit on it secretly. The same amount of money will still be flowing through the economy. Just that people will decide where & how to spend it rather than the government.

So whats better? The millionaire using his money and allowing all these little guys to earn enough money for a sandwich? Or the government taking the millionaires money so they can give the guy a card thats good for 1-free sandwich? Either way he gets a sandwich, but if it's the government one, they will tell you what kind of sandwich it has to be, how healthy it has to be, and when & where you can eat it.

Middle and lower class people spend a much higher proportion of their income it's really that simple.

Also why are you so desperate to help fund these people's lifestyle?

You're not one of them and never will be.

[sadaist]

Middle and lower class people spend a much higher proportion of their income it's really that simple.

I just would like an explanation of how these wealthy people don't spend their money. What exactly do you think they do with it? They spend 100% of their income. It's really THAT simple.

[Dr. Love]

To an outsider it also demonstrates the power of the 'American dream' bullshit.

A lot of Americans seem to think that they too could one day be one of the 1% at the top who have 80% of the cash when every bit of evidence shows that there isn't a flying fuck of a chance short of a lottery win that they ever will be.

Brainwashed by the rich media owners or just plain idiotic dreaming the end result is you get a huge amount of people that vote against their own self interest.

It happens in other countries too but the US is much more extreme.

I don't believe I'll necessarily be in the top 1% one day but I have been very successful in pulling myself from a family well below the poverty line to put myself through college and navigate my industry to make enough that my income is close to being considered by the President as an amount that doesn't deserve an extension of the tax rates. Anyone in this country could do the same if they dropped the victim mentality, used their brains instead of their hearts to guide their decisions, wanted it badly enough and remained determined in the face of adversity. My parents were very helpful and supportive emotionally, and that made it easier on me when times were hard, but I did the work myself.

There's no reason for the poor to remain poor. They are just as capable as me or anyone else to work hard and get ahead.