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Obama’s Tax-Cut Fiasco in 200 Words or Less

December 12, 2010

Everyone knows what became of President Obama’s plan to end the Bush-era tax cuts for the rich. It was derailed by President Obama. Not cynically, mind you, but as a desperate attempt to compromise with the newly empowered right-wing partisans who have convinced everyone (including the president) that they already rule the roost.

Everyone also knows that the right-wing partisans want to cut the federal deficit. They spew fire when they think about their grandchildren paying off our gargantuan debt, probably as indentured servants of the Chinese, half a century from now.

So how do they respond when President Obama asks, “Who will help me cut the deficit?”

“NOT US! We’d really prefer to help our rich friends maintain their obscene wealth gap over the clueless masses who voted us into office.”

“OK… whatever,” said the president. And his own party commenced to feast on his bones.

Amid the countless thousands of words penned in response to the great tax-cut debate, this is all you really need to know: those who attempt to govern from the middle of the road too often become roadkill.

We moderates need to work on rewriting this sorry script.

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14 Comments leave one →
  1. December 12, 2010 3:21 am

    Now I dare you to write the same article in 140 characters or less. So I can tweet it.

    • December 13, 2010 12:19 am

      Obama: Who will help me cut the deficit?
      GOP: Not us!
      Obama: No prob.
      GOP: Damn straight, socialist!
      Democrats: Sellout!
      New Moderate: 😦

  2. December 12, 2010 9:39 pm

    I thought this was a moderate blog ? I am having a hard time distinguishing it from Daily Kos. There is much not to like in the compromise worked out between the president and the GOP, but it does actually represent compromise, and there is alot of good in it – mostly the things you are ranting about. Extenting unemployment is indistinguishable from turning it into a form of welfare or dole, and that has not worked out well for any nation. I am self employed trying to build a business – one that may someday hire others. Yet no matter how hard or long I work, no matter how much I pay in there is no safety net if I fail. Yet I could take a job paying far more than I am making right now and after a few months failure would entitle me to near infinite government support – why should I work to create jobs, when it is far easier to live off of others ?
    As to tax cuts for the rich – who do you think already pays for our government ? Within reason the lighter taxes on capitol have been the larger the percentage of government has been paid for by the “rich”. Beyond that this class warfare is both evil and misdirected. Why shouldn’t people who have taken risks, succeeded and created wealth and jobs for themselves and others – and do not be deluded if you wish to get rich doing so requires creating far more wealth for those lower on the pyramid, significantly benefit from that ?
    If you want jobs then quit punishing those that create jobs. If you want a robust economy quit punishing those who grow the economy. Further why do you confuse the victims of upper margin tax brackets with “the rich” ? People who have to work for a living – regardless of how much they are paid, are generally not “the rich” atleast not the ones most of us think of when we say “the rich”
    Finally, regardless of who we get it from – and we already get most of it from the so called “rich” there is pretty strong evidence (and it make sense) that there is an upper limit to how much revenue government can taken in. Historically in the US federal tax revenues have never exceeded 20% of GDP. With that as a starting point the deficit can only be solved by double digit economic growth (highly unlikely) or spending cuts.

    • December 13, 2010 12:59 am

      Dave: I appreciate your comments, and I’m moderate enough to admit that your concerns are valid. I’m not advocating “soaking the rich,” which is what we used to do in the 1950s when they made far less in comparison to the average American. You must know that the incomes of the “rich” have been rising steadily during the past decade, while everyone else’s income has been stagnant or shrinking relative to inflation.

      I know the rich contribute a healthy share of our tax revenue, but they enjoy an even healthier share of the nation’s wealth. They can afford to have their tax rates returned to the pre-Bush standard. Believe me, there were plenty of thriving capitalists and plutocrats during the late 20th century.

      I don’t see much evidence that the trickle-down effect is working during the current recession/depression. Tax rates have reached historic lows for the postwar era, and yet the capitalists — those indispensable job-creators — are sitting on their capital and hiring almost nobody. Most manufacturing jobs — and now even skilled middle class jobs — are being outsourced to India and elsewhere to boost the bottom line.

      Something has to be done to create decent jobs for Americans. If the capitalists won’t do it, I think the government has to step in and essentially revive the New Deal: we’ll need short-term federal projects that put people back to work at both the blue collar and white collar level. (I know: More federal spending! But at least we’ll get a return on our investment, and we won’t have an angry proletariat hankering for the heads of the plutocrats.)

      How do we reduce the deficit, then? Less foreign aid, fewer military adventures, fewer subsidies, lower public-sector pensions, tax penalties on companies that outsource their jobs, and (ahem!) higher taxes for those who earn outsized incomes. Just to show how fair I am, I don’t think lower-income people should be excused from paying income tax, either. Everyone who works needs to contribute.

  3. Priscilla permalink
    December 13, 2010 1:01 am

    I have to agree with Dave. Rick, I think that your generally moderate point of view takes a decidedly left turn when it comes to fiscal policy. Obama has shown not an iota of interest in cutting the deficit – spending has exploded under his administration. Bush increased the deficit by $7B, but the Obama administration has quadrupled that – and with no end in sight. That the fact that he has agreed to keep tax rates the same as they have been for the last 7 years is seen as selling out is pretty sad. Why should taxes go up in this weak and fragile economy? Why should those who have succeeded in achieving the American dream be punished? When do government safety nets become vehicles for the confiscation and redistribution of income?

  4. December 13, 2010 1:08 am

    Looks like we simulposted, Priscilla. I have to get to bed (big day coming up). Let me just say that I tend to be a boat-balancer: when one faction tilts the boat too far in one direction, I want to tilt it in the other direction — just so that we stay upright.

    Over the last 20 years, the economy has tilted to the right while culture has favored the left. This is why I tend to skew a little left of center on fiscal issues and a little right of center on cultural and social issues.

  5. December 14, 2010 9:30 pm

    On this particular issue, I disagree with Mr. Bayan, but let me first address Dave Lynch/Priscilla.

    Since when is a right wing stance the default for moderation? Bush-era tax cuts did little if anything at all to help our ailing economy. Liberal Democratic legislation from 30 years ago (Carter’s CRA) is indeed INITIALLY responsible for this mess, but the right wing is just as complicit in that 3 Republican presidents and 2 Republican congresses since then lifted not a finger to address it. As for “punishing those who create jobs,” as Mr. Bayan pointed out, how many American jobs were actually created by these altruistic saviors? Easily as much as the the left wing, right wing politicians routinely appoint associates or former associates of the bodies who participate in unscrupulous business practices, thereby turning this state into a plutocracy.

    Where I perhaps differ with Mr. Bayan is that this plutocracy happened without the American people’s consent. I assert that it did not. Democracy is still alive. The only reason these unscrupulous corporations continue unabated is that a) we keep buying their product because it provides a convenience so rosy that our ignorance about the product seems a minor vice and b) we keep electing politicians who feed these corporations, no matter which ideology these politicians claim to follow. In any case, we’re all responsible.

    Our new righties in Washington held unemployment benefits, an IMMEDIATE dire need, hostage to extend tax cuts. Despicable to say the least? Definitely. Have lefties done the same in the past? Of course, though this doesn’t excuse the behavior. But this decision was a no-brainer. People need unemployment NOW. And frankly, I’d like to see Paul Krugman, who, in his excoriation of Obama on This Week, said that he was willing to sacrifice those benefits to keep those “dastardly Republicans” at bay, approach someone with rent to pay and kids to feed and convince them that such a moral liberal victory would have been worth it.

  6. Kent Garshwiler permalink
    December 15, 2010 4:52 am

    I like all your comments (SicklyGreyfoot, Priscilla, Rick and Dave). I find truth and bias in each comment. I don’t like bias as it is emotions viewed thru perception of subject matter via experience.

    What I know is the Bush Tax Cuts were around 2001 and the economy picked up every month from Oct. 2003 to Nov. 2007 (Bureau of Labor Statistics) (except Katrina month where we lost 35k jobs) carrying more than 200,o00 jobs per month….to a total of over 7.2 million jobs. It takes at least 200.000 jobs to account for keeping up with new employees being added to the workforce per month. From Dec. 2007 ( the time Obama started campaigning for Pres.) we have lost well over 8-9 million jobs. 7 million around the time the “stimulus” was supposed to start working….around mid-late 2009?? I think it was ’09. Anyway, we have lost more since then as it is obvious the first “stimulus” did not work because we now have more lost jobs.

    Greyfoot,
    the Bush Tax Cuts are doing something right now in this ailing economy. They are helping families like my own who have set our lives according to the taxes that the government has set since 2001. Any higher taxes and my family will start rationing what foods not to buy. It is bad enough we don’t go out to eat. If the taxes go up for a middle class family they suffer. Also, we have a Plutocracy and your right …more population means more people under each representative. You can’t expect everyone to be happy as the population swells and the representatives stay at 535 congress members for 307 million people? Therefore, the few make the choices for the many and the many have money.

    Did you know there is no law against insider trading among Senators and Supreme Court Justices? They have been making over 12% interest in there investments on average for many years.

    Rick,
    Do you actually believe the “higher taxed” working family isn’t suffering at their own level of wealth as well? Do you realize that the “high paid” employees pay more taxes than the ones who don’t work for a paycheck like: Warren Buffett, Bill Gates, George Soros, etc…. Only Capital Gains Tax is paid by these individuals. I’d like to show up and speak for a few million dollars.

    If you tax a person making $250,000 at 40%… you bring home $150,000. That’s a lot of money lost. Why work that hard? The system is rigged to keep you from being the next Bill Gates based on the “Progressive” income tax code. There is a ceiling which you may never get above unless you can live off the interest in a bank account. That’s why I support eliminating the 25% income tax for the 23% Fair Tax. Everyone gets all their pay first and buys the items that they are willing to pay 23% tax on to the Federal Government.

    Rick,
    To separate higher paid employees from middle and lower paid employees is unfair. There is no centrist ideology in this thought because it is “class warfare”. Which is Marxism. Yea, I would like to have more money, but my happiness is more important. Something Karl Marx didn’t focus on (happiness)more than his precious “wealth envy”. I will not let the “wealth envy” get to me. Karl Marx spent his time in a museum writing books about evil Capitalism while his wife died and his friends paid for his rent and food. Great guy…if hate yourself and individualism.

    The sad thing about all this is we as “Centrists” work! Some get good, high paychecks…others middle or low pay. While the two extremes…High (Non working Philanthropists) and Low (Non working “skid row”) get breaks thru Capital Gains or Unemployment/Welfare. Yea, there may be some “Centrists” on the high and low, but they are subject to the powers in Washington or in other terms “money from the outside”. This is why we…”The middle” (workers) are being given the responsibility to make things right with common sense and use voting as our weapon.

    We struggle daily to meet needs we make important in our lives. We pay attention to details that we think important. Some details may be politics, but we must also pay attention to what the politician is speaking about as he/she has bias for their own political gain (power). Politicians can manipulate the poor (Democrats) into believing that the people with money owe something. It is also true for the rich (Republicans) into believing that the people can survive without help. It is our responsibility to balance these two and inspire both the rich to give freely and the poor to be inspired to do somethings that promote their own creativity.

    This is the Centrist stance that no other Party can stand on. Centrists cater to common sense, responsibility (fiscally and politically), balance, giving, creativity and all through inspiration.

    Rick,
    I balance center-right fiscal responsibility and center-left Social. Reasoning is you have to conserve your money for economic downturns… Which we had no federal money saved for this one ’07-’10 recession. Instead we borrowed from China with Interest.

    If you take more taxes from the “rich” as you say. The “rich” will hoard their money…while the poorer people continue to spend their money. This will widen the gap between “rich” and “poor”. This is the Democrat/Progressive Socialist mentality.

    If you just let the “poor” stay spending their money at “whatever”and don’t help them invest wisely while the rich invest exclusively then you are in the Republican/Libertarian Capitalist mentality. This also widens the gap between rich and poor.

    Trickle Down Economics was a well placed term from the Democrat/Progressive Socialists to confuse people. Money does flow down from the top of the companies you work for….not from the guy working under your position. When they (Dems) say it doesn’t work…. then try getting your paycheck and bonuses from the guy who works for you. I call this “Trickle Up Poverty” as you are only going to get pennies from the guy working for you.

    Money does Trickle down and it does work. The question is whether yo want a job that gives you money that trickles or comes down like a waterfall?

    We have the highest Corporate taxes in the industrialized world. No wonder Corporations outsource!

    Here’s some bias:
    Another thing, If the Government steps in to fix things with money. The Government is making an “investment”or “Stimulus”. It is counting on something to produce more money or results. This is called “Capitalism”. How anyone can say they are Socialist/Progressive and then “invest” as a money lender is just plain ignorant. A Socialist/Progressive gives money away freely without concern just to be “fair” to a “Social Justice” mentality and expects no rewards other than the person receiving the money benefits.

    Just a thought from a radical Centrist
    Long live the National Centrist Party…to inspire and prosper!

    • December 16, 2010 11:42 pm

      Some challenging and astute observations here, Kent, though I won’t be able to address them all without taking an economics course.

      I’ll have to think some more about the difference between high earners (who pay high taxes) and high net-worth individuals (who don’t)… and how they should be treated in a fair centrist system.

      I’m still concerned about the widening income gap (see my latest response to Priscilla about the ratio of top earners to average earners). It’s not just “wealth envy”… it’s my internal justice meter telling me that nobody who works full time deserves to make less than, say, 5% of what the top earners make. The overinflated and increasingly outlandish incomes of our top earners make a mockery out of honest work.

      As for the trickle-down system, how many employees do investment bankers, hedge fund managers, top law partners and professional athletes hire? Only a fraction of our tycoons are capitalists who are in a position to create wealth for those on the lower slopes of the economy… unless you count their purchases from small businesses. (Again, only a fraction of middle-class earners are entrepreneurs who would benefit from their spending.)

      Yes, some wealth manages to trickle down, but when 10% or more of the work-age population is jobless, we can’t wait for the trickle effect. I really think we need to revive a New Deal system of federal job programs at this point, at least until American companies start rehiring in significant numbers. Somebody go and wake FDR. (Our first zombie president?)

  7. Anonymous permalink
    December 16, 2010 9:05 am

    As an example of how the “class warfare” concept is played out these days, take college costs, which are now upwards of $250,000 a year at the top private universities. Only kids from families falling below a certain income level are eligible for financial aid…..the rest, many from these so-called “rich” middle class families, must have their college expenses funded through their families or through loans (which are now available ONLY through the government) which saddle them with considerable debt as soon as they graduate, many with no prospect of employment. They are told that they can go to state colleges and universities, which, ironically, were established to help working class students, while at the same time being told to work hard in school to get into the “top” colleges, such as the grossly overrated and overpriced Ivy League schools (from which all of our recent presidents came). Not to mention that in many states, even state college tuition is now upwards of $35-40,000 p/yr.

    My husband and I saved to put 3 kids (2 of them straight A students) through college, but without using every cent we inherited from our hardworking and frugal parents (money that will not be available to future generations if the Democrats estate tax plans are implemented), as well as taking out thousands in loans, both in our names and our kids’, it would not have been possible. We are not rich – we would not qualify as rich even under Obama’s definition – but we are too “wealthy” to get meaningful financial aid……

    I won’t even get into the aid available to preferred minorities and foreign students that is not offered to white middle-class kids – that is a whole other story.

    So, I would disagree that our economy has tilted right recently….redistributionism continues unabated, under both parties, just vastly accelerated under the Democrats.

  8. Priscilla permalink
    December 16, 2010 9:06 am

    ^ Anonymous up there is me ^ 🙂

  9. Priscilla permalink
    December 16, 2010 9:07 am

    Double oops, I meant $250,000 total not per year – yikes!

  10. December 16, 2010 11:16 pm

    Priscilla: I knew it was you! I’m in total agreement with you about the injustice of our college tuition & scholarship machine. Yes, the way it’s currently set up, only the rich and the poor can comfortably attend top private colleges; as usual, the middle class (and I mean the middle-middle class, not the upper-middle) is squeezed out.

    But I don’t see this injustice as a reflection of the economy tilting leftward. The scholarships for poor nonwhite students are an outgrowth of our left-leaning social agenda. (I’m convinced that lower-class whites — AKA “trailer trash” — are our single most neglected socioeconomic group.)

    No, the pricing of college tuition above the means of the middle class is a prime symptom of our new Gilded Age economic structure. I can remember when top executives and professional athletes made about 10 times as much as the average American. Now the ratio is 100-1 or more.

    We’re evolving into a winner-take-all casino, and we’re going to have a lot of angry losers on our hands. This is the “right-leaning” economy that I rail against. I don’t want socialism; I simply want to tip the scale back to the middle.

  11. Priscilla permalink
    December 17, 2010 1:13 am

    I have to disagree….I think that it is the middle/upper middle class that gets ultra-screwed by the college tuition structure. God forbid you make $200,000 a year and own a home valued at over $500, 000 ( even though it was only $200,000 whe you bought it)…..that FAFSA will turn you into a “rich family,” even if you have 2 or 3 kids in college at the same time.

    Not to mention that families move in and out of that upper income bracket, especially now that many upper middle class professionals are un- or under- employed.

    I agree with you that the super rich get off waaay too easy, but I think that the not-so-super rich, but kinda-sorta-working- rich get totally raked over the coals: rich enough to be the targets of the class warriors, but not rich enough to buy them off.

    I don’t begrudge anyone their wealth…not even elitist prigs like John Kerry, who was born rich and then married into billions (and still avoids taxes, btw) It’s when guys like him – almost always liberals – start pontificating how upper middle class professionals and business owners making more than $250,000 a year should have their taxes raised that the steam starts coming out of my ears.

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