If the federal debt is such an important problem, why are we extending temporary tax cuts to the wealthy?

Most of what we hear out of Washington, from Republicans especially but also from Democrats, is that the federal deficit has grown so much that if we don’t address it now, our economy will enter rapid and permanent decline.  And yet our elected officials are negotiating to extend temporary tax cuts, not just to the middle and working classes who at least would pump most of the money from an extended tax cut into the ailing economy, but for the wealthy, who judging from the past, will invest it in ways that do not create additional wealth, e.g., into hedge funds, the stock of existing companies and art created by deceased artists.  To get this new tax cut, Republicans and some Democrats are holding hostage an extension of unemployment benefits, a necessary expense in a moral nation that wants to keep large numbers of its citizens from losing their homes.

The biggest farce of all is the National Commission on Fiscal Responsibility and Reform, which officially announced its plan to “lower the deficit” last Wednesday.  Funny, the commission calls its report, “The Moment of Truth,” when in fact it is full of distortions in its overall strategy and the rationale for its specific proposals, especially regarding our only financially strong program, Social Security.

Most commentators and politicians are giving the co-commishes a large “attaboy” or three for taking on the onerous task of addressing the deficit, but then wring their hands that Congress won’t pass the plan because of political gridlock and short-term thinking and isn’t that too bad. 

For example, in the “Week in Review” section of the Sunday New York Times, Matt Bai postulates that the report will go nowhere and then asks why Americans who long ago sacrificed to win wars don’t want to sacrifice to eradicate the deficit.  His answer: “What makes this case for sacrifice so much harder to embrace, perhaps, is that it goes to our national psyche, threatening our self-image as a land with limitless potential. While past generations have readily sacrificed for national greatness, debt reduction — at least in the gloomy way its advocates argue for it — feels like a call to sacrifice in the name of our national decline.”

Bai’s article explores this hypothesis with broad-stroke history and standard ideological assumptions about the free market and lifestyle expectations.  He proposes that the problem is merely that advocates of deficit cutting must repackage their proposals by focusing on the assumed positive outcomes.

But that dog won’t hunt, it won’t bark and it won’t even roll over to scratch its back against the carpet, because anyone who reads the plan will see its not-too-hidden agenda is not to address the deficit but rather to reduce taxes on the wealthy.

A brief look at the plan should be enough to convince most that the commission should change its name to “National Commission to Lower Taxes for the Wealthy.”  Throughout the document it calls for sacrifice, and yet it proposes to give a bonus to the wealthiest of Americans.  Why don’t rich folk have to tighten their rather large belts with everyone else?

In the latest Nation, Professor Leon Friedman of Hofstra Law School estimates that if the National Commission on Fiscal Responsibility and Reform’s plan becomes law, the top income group will get a reduction of 12% off their taxes.  Friedman, by the way, proposes a one percent annual tax on the wealth of anyone with $5.0 million or more in assets, something they do in France.  That sounds like a reasonable way to reduce the deficit and invest in our infrastructure and economic future without hurting anyone, since $50,000 a year is not a lot of money if you have five million tucked away.

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One comment on “If the federal debt is such an important problem, why are we extending temporary tax cuts to the wealthy?
  1. Winghunter says:

    I’m sick of seeing treason passed off as a psychotic’s ‘common sense’. I’m exhausted from watching the stone ignorant collect what they think are supporting facts and then pushing their agenda. I’m enraged by calls for ‘compassion’ when all they do is enable. All of these suicidal dysfunctions have the 200 year old instructions to avoid them which were discussed at length by our Founding Fathers and provided for their posterity.

    The IRS reports for any idiot or patriot, Bush’s tax cuts collected $1.8 Trillion more in revenue than Clinton’s higher tax rates. If anyone needs to ask the question how less could bring more then, they need to return to high school level economics for that answer in their feigned quest to become capable for their own governance. See the Laffer Curve theory proven by the above listed fact of history.

    “To take from one, because it is thought his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to everyone the free exercise of his industry and the fruits acquired by it.” —Thomas Jefferson

    “I am for doing good to the poor, but I differ in opinion of the means. I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it. In my youth I travelled much, and I observed in different countries, that the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.” — Benjamin Franklin, On the Price of Corn and Management of the Poor, 1766

    “The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.” – Thomas Jefferson

    “If we can prevent the government from wasting the labors of the people, under the pretense of taking care of them, they must become happy.” –Thomas Jefferson

    “With respect to the two words ‘general welfare,’ I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators.” — James Madison in a letter to James Robertson

    What we obtain too cheap, we esteem too lightly: it is dearness only that gives every thing its value. – Thomas Paine, The American Crisis, No. 1, December 19, 1776

    “Liberalism is an essentially feminine, submissive world view. Perhaps a better adjective than feminine is infantile. It is the world view of men who do not have the moral toughness, the spiritual strength to stand up and do single combat with life, who cannot adjust to the reality that the world is not a huge, pink-and-blue, padded nursery in which the lions lie down with the lambs and everyone lives happily ever after.” ~ Dr. William Pierce

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