What’s at Stake in Tax-Cut Deal

tax cuts for richMore than two weeks after President Barack Obama announced his decision to make a tax-cut deal with Republican leaders, the shock waves continue to buffet many Democrats and others who are stunned by the grim implications.

While the president used political muscle to push the measure through Congress, realization grew that the momentous impacts will span the realms of tax fairness, the social compact and American politics.

All year, the White House had maintained a solid case for insisting that extension of the Bush tax cuts should not reach top rungs of the economic ladder — individuals with annual incomes above $200,000 and couples bringing in more than $250,000 a year.

But as the winter solstice neared, the president tossed that solid case overboard. And he gave lots of booty to the GOP on capital-gains taxation and the estate tax.

Noting the estate-tax sweetheart deal, House Speaker Nancy Pelosi pointed out: “We have a proposal before us that gives 6,600 families in America $25 billion and holds the rest of the provisions in the bill, (such as) low-income tax cuts, hostage to that blackmail.”

In contrast to moldy stereotypes about wealthy Marin, strong belief in progressive taxation is widespread in the county.

The reasons include idealism and the understanding that it makes social sense for the rich to pay their fair share.

After all this time, trickle-down economics has little credibility outside of ideological claims that reducing taxes for the wealthy and corporations will create jobs.

Amy B. Dean, a former president of the South Bay AFL-CIO Labor Council, is correct when she calls such measures “handouts for the powerful given on blind faith.”

Yet Washington is now bent on providing more of such handouts — while corporate profits are at record highs, and huge income gaps between the rich and the rest of us are the widest in our lifetimes.

Less obvious is the grim fact that the cave-in on Bush tax cuts for the wealthy sets the stage for another pernicious agenda in the next two years — undermining Social Security.

A former longtime BusinessWeek columnist, Robert Kuttner, has it right when he warns: “The deal that Obama made with the Republicans just gave deficit hawks new ammunition by increasing the projected deficit by nearly $900 billion over a decade. Social Security will be in the crosshairs.”

The presidentially appointed deficit commission, Kuttner notes, has just laid out a “blueprint” that would do real harm to Social Security — while the Obama-GOP tax deal “increases the deficit, adding to the artificial hysteria that Social Security is going broke.”

I revere the New Deal legacy that gave our country Social Security and other key aspects of the social compact. President Franklin D. Roosevelt fought for economic fairness. Before the end of his first term, FDR denounced “the economic royalists.” He said: “They are unanimous in their hate for me — and I welcome their hatred.”

Norman SolomanHe did not say, “They hate me — and I want them to like me.”

But now, the bleak truth is painfully real in a comment from the California Democratic Party’s chairman John Burton: “What some might call … a ‘deal’ or ‘compromise,’ I would call capitulation to the Republicans.”

Tax fairness and Social Security are at stake.

Norman Solomon

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Comments

  1. Joshua says

    Firstly “wealth” is subjective, 200k a year in many places isn’t all that much.
    Secondly , many in that bracket made a considerable INVESTMENT (both time and money) in a highly specialized edjucation (Doctors, Lawyers, Engineers, ect).They deserve to make more than a guy who pushes a mop!
    Thirdly, there is already a “progressive” tax structure, that makes them pay more in both percent as well as amount.
    Fourthy , those same people also create jobs, unlike Union stooges, who create less jobs (albeit “better” jobs).
    Fifthly, a tax beak is NOT a “handout”, you are taking less of someone elses money, that YOU had no part in making. Unemployment for years on end is a Handout, Welfare is a handout, “Free” healthcare is a handout and those taking those handouts are , in fact, Charity cases.
    Sixthly, FDR, fought for “fairness”, How did that work out? Not so good as far as the History books are concerned. Why would you want to repeat a failed economic policy?

    Fairness would be every citizen pays the eact same amount, as , or so I’ve heard, We are all equals and each have ONE vote. I would even consider paying the same percentage as fair enough.

    Calling people who make 200k+ the “rich” is absurd, wanting to ruin them finacially is absurd,for “fairness”? They have more money than me, BUT they didn’t take it from me. Nor did they take it from you. Nor should they be resposible for picking up the cheak for your harebrained social engineering schemes that always cause more harm than good.

  2. Joe Weinstein says

    Now, more than ‘just’ tax fairness and social security are at stake!

    In 1968 Dems correctly perceived and acted to repudiate LBJ’s failures and to give the nation a better alternative. But for all his faults, even LBJ had offered the nation far more credible leadership than does Obama.

    At stake now is the very usefulness – and remnant shreds of integrity – of the Dem party. All will be lost if Dems simply renominate this DINO wimp president.

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