By Bill Press
Tribune Media Services
Something important happened this week: Republican leaders in Congress finally came out for something.
Don’t knock it. This is progress. We know what they’re against: anything President Obama is for. He’s for tax breaks for small business; they’re against ‘em. He’s for extending unemployment benefits; they’re against it. He’s for emergency funds to states for keeping cops, firemen, teachers, and nurses on the job; they vote no.
As Vice President Joe Biden observed, “I know what the Republicans are against. I have no notion of what they’re for.” Well, now we do. As articulated by Mitch McConnell and John Boehner, they are for extending George Bush’s tax cuts to the top 2 percent of American taxpayers. And that singular priority speaks volumes about the intellectual poverty of the Republican Party today.
After all, the wealthiest of the wealthy have already enjoyed an undeserved free ride for 10 years, gobbling up a huge tax break that could easily have paid for universal health care or the wars in Iraq and Afghanistan. Making those tax breaks permanent, or even extending them for another 10 years, is bad public policy.
As payback to major campaign donors, Bush forced his tax cuts through early in his presidency by means of “reconciliation” in the Senate — the same process Republicans ripped Democrats for using to pass health care reform legislation. He insisted they were only “temporary” — they expire at the end of 2010 — because it was the only way he could sell them politically and because he assumed Congress would automatically renew them 10 years later.
Not so fast. President Obama supports extending the Bush tax cuts for 98 percent of Americans, those making $200,000 or less ($250,000 for joint filers). But he opposes a continued tax holiday for the top 2 percent, the wealthiest of Americans. Reason? Because it would cost too much, we’d get too little in return, and only a handful of Americans would benefit.
According to the independent Tax Policy Center, extending tax cuts for the rich would cost an additional $700 billion over the next 10 years. Nearly all of it would go to the richest 1 percent of Americans, those with incomes of more than $500,000 a year. And, of that group, the majority of tax cuts would go to the wealthiest one-tenth of 1 percent. Which translates, over the next decade, into an average $3 million windfall each year for precisely 120,000 people.
Not only have Republicans made pimping tax cuts for the rich their number one issue, they do so with a set of lies that only George W. Bush could love: this is no time for raising taxes; there’s no need to worry about the deficit; letting Bush tax breaks expire will hurt small business; and extending tax breaks to the wealthy will actually create jobs. No, no, no, and no.
First, a reality check. No matter how many times Boehner and McConnell say the opposite, allowing the Bush cuts to expire does not amount to a tax increase. It simply means the 10-year tax privilege enjoyed by the privileged few will end, as the law states, and their tax rate will return from today’s top 35 percent (which few pay, anyway) to 39.6 percent — but only on income more than $250,000 a year.
And, no doubt, that’ll save taxpayers a lot of money. Most people don’t understand that a tax cut is actually a government expense, which we have to pay for somehow. Republicans would simply pile that $700 billion cost onto an already dangerously bloated federal deficit — even though, just last month, they opposed adding $34 billion to the deficit to extend unemployment benefits.
Equally hypocritical are Republican claims that ending tax cuts for the rich would hurt small business. As Vice President Joe Biden said this week, that’s “a bunch of malarkey.” Only 3 percent of small businesses make more than $500,000 a year in profits — and most of them are big law firms, not Mom and Pop storefronts.
Their final argument about creating new jobs is the most absurd of all. Just look around you. If tax cuts for the wealthy really create jobs, where are they? Instead, under George W. Bush, America lost 8 million jobs.
Forget their twisted logic. In the end, it boils down to this: middle-class Americans need a tax cut. The top 2 percent of Americans don’t.
© 2010 Tribune Media Services, Inc.