December 8, 2010--Compromise? Capitulation!
The good news--as of yesterday when Barack Obama announced that he had reached a compromise with the Republicans and that he would support the extension of the Bush-era tax cuts for the wealthy for two more years we could all breathe a sigh of relief. By this act he demonstrated that he is not a socialist. If he were a socialist, he would never have agreed to tax polices that contribute to so much more economic inequality.
The bad news--as of yesterday we have a new Republican President: Barack Obama.
Republican President Barack Obama, in spite of what he said at his press conference, has not only embraced Bush tax policy (which now should more appropriately be call Obama-era tax policy) but he is now also presiding over the greatly expanded Obama war in Afghanistan.
He also continues to break his campaign promise by maintaining the Guantanamo prison in Cuba, still the "detention facility" for dozens of untried "enemy combatants."
Republican President Obama, former professor of constitutional law at the University of Chicago, has even expanded the Bush-era domestic surveillance program, which should now more appropriately be called . . .
You get the picture.
As reported widely, including in the New York Times (article linked below), a dispropotiante percentage of the tax deal will benefit the rich. More than one-quarter of the $900 billion cost of the tax cuts will flow to about 2 percent of the population.
He caved in on the centerpiece of his own tax program--to allow taxes to revert to Clinton-era rates for families having a taxable income of $250,000 or more a year (before deductions, incomes much higher than that) as well as allowing estates valued at up to $5.0 million to go totally untaxed (a higher level of tax exemption than when Bush left office), thereby providing another form of tax bounty for the idle rich.
Republican President Barack Obama, also undermined another of his pledges--through this deal he allowed capital gains to remain taxed at 15 rather than the 20 percent he had "fought" for during the campaign and even permitted hedge fund managers, some of whom make more than a billion (with a "b") dollars a year, to be taxed at the capital gains level rather than at the higher individual or corporate rate.
And yes, as another sop to the affluent, he agreed to a significant adjustment in the alternative minimum tax (AMT) so that 4 million taxpayers with incomes in the mid to high six figures will no longer be subject to it.
Then on the other side of the ledger, for the struggling middle class and the unemployed, though the deal does provide some relief (an extension of unemployment benefits for some for 13 months--those unemployed for fewer than 99 weeks), a two percentage point reduction in payroll taxes (which goes to support Social Security and thus the loss of this revenue puts SS in even greater jeapordy than at present), and a continuation, again for some, of the tax credit for college tuition.
But, and this is quite a but, the only people who will pay more in taxes as the result of this "compromise" will be individuals earning less than $20,000 a year or families with incomes of less than $40K.
At his heated news conference yesterday, former-socialist President Obama excoriated progressives for not giving him more credit for his accomplishments (calling us, among other things, "sanctimonious"), but he failed to explain why what he called a compromise extends the tax cuts for a full two years while the benefits for the middle class and unemployed continue only for a year (the payroll tax "suspension") or 13 months (the unemployment payments).
That is not anyone's idea of meeting the opposition half way.
As further evidence that Obama has morphed into a Republican, though he claims that what he agreed to is a form of economic stimulus (and thus will create more jobs) every part of this so-called stimulus is about tax breaks and tax cuts.
Isn't this the basic Republican approach--to fix the economy, cut taxes? And isn't the evidencve clear that this doesn't work? Haven't we had a version of this tax policy for the past 10 years? And isn't it true that during this decade when we have had a version of this trickle-down tax policy literally no new jobs were created? Isn't that why we have an almost 10 percent unemployment rate (with the true figure at at least 17 percent)?
No Democrat would have agreed to this.
Further, President Obama agreed to not pay for any of this almost-trillion dollars in new tax-cut spending. Every penny of it will be added to the deficit, the very same deficit that his Debt Commission this week said will contribute to our ultimate ruination.
Not paying for tax cuts is as Republican as it gets. I don't hear hypocrites John Boehner or Mitch McConnell squawking about how the deal they just struck with Obama will add to our children and grandchildren's burden. Their favorite insincere mantra. Rather, I hear them chuckling with glee about how they rolled him again.
Tax cuts weren't paid for during Republican times. Not during the Reagan era (when the deficit more than doubled) and they weren't paid for during George Bush's two terms (when the deficit nearly tripled). And now they won't be paid for during Republican President Barack Obama's term.
Single term I suggest.
The bad news--as of yesterday we have a new Republican President: Barack Obama.
Republican President Barack Obama, in spite of what he said at his press conference, has not only embraced Bush tax policy (which now should more appropriately be call Obama-era tax policy) but he is now also presiding over the greatly expanded Obama war in Afghanistan.
He also continues to break his campaign promise by maintaining the Guantanamo prison in Cuba, still the "detention facility" for dozens of untried "enemy combatants."
Republican President Obama, former professor of constitutional law at the University of Chicago, has even expanded the Bush-era domestic surveillance program, which should now more appropriately be called . . .
You get the picture.
As reported widely, including in the New York Times (article linked below), a dispropotiante percentage of the tax deal will benefit the rich. More than one-quarter of the $900 billion cost of the tax cuts will flow to about 2 percent of the population.
He caved in on the centerpiece of his own tax program--to allow taxes to revert to Clinton-era rates for families having a taxable income of $250,000 or more a year (before deductions, incomes much higher than that) as well as allowing estates valued at up to $5.0 million to go totally untaxed (a higher level of tax exemption than when Bush left office), thereby providing another form of tax bounty for the idle rich.
Republican President Barack Obama, also undermined another of his pledges--through this deal he allowed capital gains to remain taxed at 15 rather than the 20 percent he had "fought" for during the campaign and even permitted hedge fund managers, some of whom make more than a billion (with a "b") dollars a year, to be taxed at the capital gains level rather than at the higher individual or corporate rate.
And yes, as another sop to the affluent, he agreed to a significant adjustment in the alternative minimum tax (AMT) so that 4 million taxpayers with incomes in the mid to high six figures will no longer be subject to it.
Then on the other side of the ledger, for the struggling middle class and the unemployed, though the deal does provide some relief (an extension of unemployment benefits for some for 13 months--those unemployed for fewer than 99 weeks), a two percentage point reduction in payroll taxes (which goes to support Social Security and thus the loss of this revenue puts SS in even greater jeapordy than at present), and a continuation, again for some, of the tax credit for college tuition.
But, and this is quite a but, the only people who will pay more in taxes as the result of this "compromise" will be individuals earning less than $20,000 a year or families with incomes of less than $40K.
At his heated news conference yesterday, former-socialist President Obama excoriated progressives for not giving him more credit for his accomplishments (calling us, among other things, "sanctimonious"), but he failed to explain why what he called a compromise extends the tax cuts for a full two years while the benefits for the middle class and unemployed continue only for a year (the payroll tax "suspension") or 13 months (the unemployment payments).
That is not anyone's idea of meeting the opposition half way.
As further evidence that Obama has morphed into a Republican, though he claims that what he agreed to is a form of economic stimulus (and thus will create more jobs) every part of this so-called stimulus is about tax breaks and tax cuts.
Isn't this the basic Republican approach--to fix the economy, cut taxes? And isn't the evidencve clear that this doesn't work? Haven't we had a version of this tax policy for the past 10 years? And isn't it true that during this decade when we have had a version of this trickle-down tax policy literally no new jobs were created? Isn't that why we have an almost 10 percent unemployment rate (with the true figure at at least 17 percent)?
No Democrat would have agreed to this.
Further, President Obama agreed to not pay for any of this almost-trillion dollars in new tax-cut spending. Every penny of it will be added to the deficit, the very same deficit that his Debt Commission this week said will contribute to our ultimate ruination.
Not paying for tax cuts is as Republican as it gets. I don't hear hypocrites John Boehner or Mitch McConnell squawking about how the deal they just struck with Obama will add to our children and grandchildren's burden. Their favorite insincere mantra. Rather, I hear them chuckling with glee about how they rolled him again.
Tax cuts weren't paid for during Republican times. Not during the Reagan era (when the deficit more than doubled) and they weren't paid for during George Bush's two terms (when the deficit nearly tripled). And now they won't be paid for during Republican President Barack Obama's term.
Single term I suggest.
posted by Steven Zwerling at
5:54 AM
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