Politics Plus

Republicans are going hog wild supporting No Millionaire Left Behind.  They’re fighting to heep the Bush tax cuts for America’s richest two percent.  The most common lie they are using is that it is an Obama tax increase.  It is not.  The expiration was part of the original bill.  Robert Reich explained why we should let the tax cut for rich expier, but let it continue for the poor and middle classes.

The economy is slouching backward because consumers can’t and won’t spend enough to revive it. Congress is about to recess for the summer without doing anything to fill the gap. And it looks like the only issue it will be debating when it returns is who, if anyone, should pay more taxes next year — just the very rich, everyone, or no one? The cuts enacted by George W. Bush will expire in January, and with midterm election pending in November we’re about to be treated to months of tax demagoguery.

Here’s a guide to the perplexed.

From a strictly economic standpoint — as if economics had anything to do with this — it makes sense to preserve the Bush tax cuts at least through 2011 for the middle class. There’s no way consumers — who comprise 70 percent of the economy — will start buying again if their federal income taxes rise while they’re still struggling to repay their debts, they can’t borrow more, can no longer use their homes as ATMs, and they’re worried about keeping their jobs.

But the same logic doesn’t apply to people at the top, earning over $250K, who represent roughly 2 percent of tax filers. Restoring their marginal tax rates to what they were during the Clinton administration (36 and 39 percent) won’t inhibit their spending. That’s because they already save a large portion of what they earn, and already spend what they want to spend. (During the Clinton years the economy created 22 million net new jobs and unemployment dropped to 4 percent.)

But restoring those top marginal tax rates will help bring down the long-term debt, pulling in almost a trillion dollars of revenues over next ten years. That’s not nearly enough to make a major dent in the nation’s projected deficits, but it’s not chicken feed either. It would at least signal to financial markets we’re serious about cutting that long-term deficit — and the rest of us will chip in when the economy strengthens.

So-called supply-side economists don’t like raising taxes on anyone, of course, and argue that raising them on the well-off will slow economic growth. They say people at the top will have less incentive to work hard, invest, and invent.

Unfortunately for supply-siders, history has proven them wrong again and again. During almost three decades spanning 1951 to 1980, when America’s top marginal tax rate was between 70 and 92 percent, the nation’s average annual growth was 3.7 percent. But between 1983 and start of the Great Recession, when the top rate was far lower — ranging between 35 and 39 percent — the economy grew an average of just 3 percent per year. Supply-siders are fond of claiming that Ronald Reagan’s 1981 cuts caused the 1980s economic boom. In fact, that boom followed Reagan’s 1982 tax increase. The 1990s boom likewise was not the result of a tax cut; it came in the wake of Bill Clinton’s 1993 tax increase.

A final reason for allowing the Bush tax cut to expire for people at the top is the most basic of all. Although Wall Street’s excesses were the proximate cause of the Great Recession, its fundamental cause lay in the nation’s widening inequality. For many years, most of the gains of economic growth in America have been going to the top — leaving the nation’s vast middle class with a shrinking portion of total income. (In the 1970s, the top 1 percent received 8 to 9 percent of total income, but thereafter income concentrated so rapidly that by 2007 the top received 23.5 percent of the total.) The only way most Americans could continue to buy most of what they produced was by borrowing. But now that the debt bubble has burst — as it inevitably would — the underlying problem has reemerged… [emphasis added]

Inserted from <Huffington Post>

Robert also appeared with Keith Olbermann.

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As I see it, Republicans with threaten Democrats that, unless Democrats extend the tax cuts for everyone, they will filibuster extending the tax cuts for anyone.  My greatest fear is that Democrats will cave in again.  If they do, Republicans will continue to blame them for the Bush/GOP deficit, so they will gain nothing.  If they fight, they will either win or Republicans will have to face the voters about why their taxes are going up.  It’s a fight we’d rather win, but one we can afford to lose.  But we cannot afford not th have this fight.

Sarah Palin has been writing on her hand again.  But when what she writes is a lie, she only echoes her Republican colleagues.

Since he was on the campaign trail, President Obama has proposed renewing the 2001 and 2003 Bush tax cuts for the lower- and middle-class, while allowing them to expire on schedule at the end of the year for the richest two percent of Americans. Republicans, however, have begun to obfuscate the issue by saying that the end of the year will bring history’s largest tax increase, deliberately leaving out that Democrats have proposed extending most of the cuts.

Rep. Mike Pence (R-IN) pulled this rhetorical trick last week, saying “Democrats are poised to allow the largest tax increase in American history to take effect,” and on Fox News Sunday today former half-term governor Sarah Palin went down the same road. Fox’s Chris Wallace rightly pointed out that “the Republicans keep talking about being deficit hawks. This is $678 billion you are not going to pay for.” Palin responded “no, this is going to result in the largest tax increase in U.S. history. Again, it’s idiotic.”

Wallace proceeded to let Palin spend the next minute reading from notes on paper that she had written down. He interrupted her just for a moment to ask if she had anything written down on her hand, to which she responded that she did:

PALIN: My palm isn’t large enough to have written all my notes down on what this tax increase, what it will result in.… Democrats are poised to cause the largest tax increase in U.S. history, it’s a tax increase of $3.8 trillion in the next ten years and it will have an effect on every single American who pays an income tax. Small businesses, especially, will be hit hardest. Small businesses account for roughly 70 percent of our job creation in this country. So raising taxes on these employers is the worst thing that can happen.

WALLACE: Can I ask you, what do you have written on your hand?

PALIN: $3.8 trillion in the next ten years, so I have didn’t say $3.7 trillion and get dinged by the liberals saying I didn’t know what I was talking about.

Watch it:

 

Despite the preparation of her “cheat sheet,” she still doesn’t know what she is talking about.

For one thing, according to the Pew Economic Policy Group, an extension of all of the Bush tax cuts will cost $3.1 trillion over ten years, once the costs of servicing the debt are factored in. But no one has proposed allowing them all expire, and it’s incredibly disingenuous of Republicans to claim otherwise, especially since it was a budget gimmick by former President George W. Bush to include the ten-year sunset at all.

Extending just the cuts for the wealthiest two percent of Americans will cost $830 billion over ten years. As Center for American Progress Associate Director for Tax Policy Michael Linden wrote, “to put that figure in perspective, $830 billion is enough to pay for all veterans’ hospitals, doctors, and the rest of the Veteran’s Affairs health system, plus the United States Coast Guard, plus the Food and Drug Administration, plus the operation and maintenance of every single national park for the entire 10-year period — with more than $100 billion left over.”… [emphasis original]

Inserted from <Think Progress>

Wallace was better that the standard for Faux Noise.  He did call her on some things.  But during the piece neither he or Palin ever mentioned that Obama plans to extend the tax cut for everyone except the riches 2%. So people who watch this Fox have no way to know that this will not effect their taxes.  They have every reason to believe it will, because of Palin’s inflammatory language and her lie about the amount.

So what have we learned?  Mooseolini is still an idiot and Faux Noise is still the Republican Reichsministry of Propaganda.