GOP ‘Jobs Agenda’ Revives Ineffective Business Tax Giveaway
This week, House Majority Leader Eric Cantor (R-VA) released a memo outlining the House GOP’s supposed “jobs agenda.” In addition to being an assault on organized labor and recommending the elimination of environmental regulations that save tens of thousands of lives every year, the document proposes reviving some of the GOP’s favorite tax cuts, including the so-called “20% Small Business Tax Deduction.”
This particular idea made an appearance in both an “economic plan” that Cantor and House Speaker John Boehner (R-OH) presented to President Obama in 2009 and the GOP’s 2010 Pledge to America. The policy would allow businesses to deduct 20 percent of their income from their taxes, and in Cantor’s words, “immediately free up funds for small business people to retain and hire new employees, and reinvest in and grow their businesses.”
However, as Citizens for Tax Justice pointed out in 2009, there is little reason to think this tax break would be anything but a boondoggle:
The Republican plan proposes to allow a “small business” to take a tax deduction of 20 percent of its pretax income, whether the small business is a corporation or a sole proprietor. The plan defines a “small business” as one with 500 or fewer employees. It makes no distinction based on income. A “small business” making $100 million would get to deduct $20 million of its income right off the top. (Apparently, a company with slightly more than 500 employees would have an incentive to lay off staff to qualify for the tax break!) […]
A business tax cut is just about the least effective stimulus measure Congress could possibly enact. The tax cuts put more money in the hands of business. But there is very little correlation between a corporation’s cash position and its plans for investment—whether expanding capacity or hiring new employees. Businesses invest in expansion when they believe there will be an increase in the demand for the goods and services they provide. If they don’t anticipate a sales increase, they won’t expand no matter how many tax breaks the federal government gives them.
And the Center for American Progress’ Christian Weller noted in 2010 that, while the credit is restricted to business with fewer than 500 employees, it’s still “an ‘upside-down’ tax break that gives the largest benefits to those who already have the highest incomes” because the amount of the deduction is contingent on which tax bracket a business files in (the higher the tax bracket, the more the deduction is worth):
A deduction reduces the taxable income and thus the taxes that somebody has to pay. A business owner with lots of business and other income will thus get a government subsidy of 35 cents for each dollar in deduction, while a small business owner in the 15 percent tax bracket will get 15 cents for each dollar in deductions…Larger businesses could easily use this windfall to outcompete smaller businesses. A larger business owner with a 35 percent marginal tax rate will get a benefit that is 133 percent greater than the benefit that a smaller business owner with a 15 percent marginal tax rate gets for each dollar in tax deduction.
But for the GOP, this idea is so good that it’s worth bringing up over and over again.
By: Pat Garofalo, ThinkProgress, September 3, 2011
Out Of The Shadows: Bush And Cheney Remind Us How We Got Into This Mess
Thank you, George W. Bush and Dick Cheney, for emerging from your secure, undisclosed locations to remind us how we got into this mess: It didn’t happen by accident.
The important thing isn’t what Bush says in his interview with National Geographic or what scores Cheney tries to settle in his memoir. What matters is that as they return to the public eye, they highlight their record of wrongheaded policy choices that helped bring the nation to a sour, penurious state.
Questions about whether President Obama has been combative enough in dealing with the Republican opposition — or sufficiently ambitious in framing his progressive agenda — seem trivial when viewed in this larger context. Obama is tackling enormous problems that took many years to create. His presidential style is important insofar as it boosts or lessens his effectiveness, but its importance pales beside the generally righteous substance of what he’s trying to accomplish.
It was the Bush administration, you will recall, that sent the national debt into the stratosphere and choked off federal revenue to the point of asphyxiation. Bush and Cheney decided to fight two wars without even accounting — let alone paying — for them. Rather than raise taxes to cover the cost of military campaigns in Afghanistan and Iraq, Bush opted to maintain unreasonable and unnecessary tax cuts.
So far, the wars and the tax cuts have cost the Treasury between $4 trillion and $5 trillion. If Bush had just left income tax rates alone, nobody except Ron Paul would be talking about the debt.
My aim isn’t to attack Bush but to attack his philosophy. When he was campaigning for the White House in 2000, the government was anticipating a projected surplus of roughly $6 trillion over the following decade. Bush said repeatedly that he thought this was too much and wanted to bring the surplus down — hence, in 2001, the first of his two big tax cuts.
Bush was hewing to what had already become Republican dogma and by now has become something akin to scripture: Taxes must always be cut because government must always be starved.
The party ascribes this golden rule to Ronald Reagan — conveniently forgetting that Reagan, in his eight years as president, raised taxes 11 times. Reagan may have believed in small government, but he did believe in government itself. Today’s Republicans have perverted Reagan’s philosophy into a kind of anti-government nihilism — an irresponsible, almost childish insistence that the basic laws of arithmetic can be suspended at their will.
The Bush administration also pushed forward Reagan’s policy of deregulation — ignoring, for example, critics who said the ballooning market in mortgage-backed securities needed more oversight. When the 2008 financial crisis hit, Bush did regain his faith in government long enough to throw together the $800 billion TARP bailout for the banks. But he failed to use the leverage of an aid package to exact reforms that would ensure that the financial system served the economy, rather than the other way around.
Faced with similar circumstances, would today’s Republican leadership react at all? Or is it the party’s view that the proper role of government would be to stand aside and watch the world’s financial system crash and burn?
This is a serious question. Just a few weeks ago, the Republican majority in the House threatened to force the United States government to default on its debt obligations — a previously unthinkable act of brinkmanship. Everything is thinkable now.
The Bush administration took Reagan’s tax-cutting, government-starving philosophy much too far. Today’s Republican Party takes it well beyond, into a rigid absolutism that would be comical if it were not so consequential.
We face devastating unemployment. Many conservative economists have joined the chorus calling for more short-term spending by the federal government as a way to boost growth. But the radical Republicans don’t pay attention to conservative economists anymore. The Republicans’ idea of a cure for cancer would be to cut spending and cut taxes.
Perhaps they’re just cynically trying to keep the economy in the doldrums through next year to hurt Obama’s chances of reelection. I worry that their fanaticism is sincere — that one of our major parties has gone completely off the rails. If so, things will get worse before they get better.
Having Bush and Cheney reappear is a reminder to step back and look at what Obama is up against. You might want to cut him a little slack.
Yes, Perry And Bachmann Are Religious Radicals
While few in either the mainstream media or the conservative commentariat have been so bold as to deny that the Republican Party is a lot more ideologically rigid than it was four or twelve or thirty years ago, there has been some regular pushback against attaching such terms as “radical” and “extremist” to the party’s views. Some conservatives like to claim that they just look extreme when compared to a Democratic Party dominated by a radical socialist president. Others admit their party is in an ideological grip unlike anything seen since Barry Goldwater’s 1964 campaign, but argue the whole country’s moved with them. (Just observe Michele Bachmann’s recent statement that the Tea Party represents the views of 90 percent of the U.S. population). But more common is the effort, which extends deep into the media, to push back against charges of Republican extremism on grounds that, well, a party that won over half the ballots of 2010 voters cannot, by definition, be anything other than solidly in the mainstream. And so it becomes habitual to denigrate even the most specific text-proofs that something odd is going on in the GOP as “liberal hysteria” or mere agitprop.
This 45-million-Americans-can’t-be-wrong meme has been deployed most recently to scoff at those progressive writers who have drawn attention to the rather peculiar associations of presidential candidates Michele Bachmann and Rick Perry. The most typical retort came from Washington Post religion columnist Lisa Miller, who deplored those scrutinizing Bachmann’s legal training at Oral Roberts University or the “dominionist” beliefs common among many key organizers of Perry’s recent “day of prayer and fasting” as “raising fears on the left about ‘crazy Christians.’” New York Times columnist Ross Douthat offered a more sophisticated but functionally equivalent rebuke, suggesting that Bachmann and Perry were representing a long Republican tradition of co-opting religious extremists with absolutely no intention of giving them genuine influence.
But the recent resurgence of militant Christian Right activism, alongside its close cousin, “constitutional conservatism,” is genuinely troubling to people who don’t share the belief that the Bible or the Constitution tell you exactly what to do on a vast array of political issues. From both perspectives, conservative policy views are advanced not because they make sense empirically, or are highly relevant to the contemporary challenges facing the country, or because they may from time to time reflect public opinion. They are, instead, rooted in a concept of the eternal order of the universe, or in the unique (and, for many, divinely ordained) character of the United States. As such, they suggest a fundamentally undemocratic strain in American politics and one that can quite justifiably be labeled extreme.
Consider the language of the Mount Vernon Statement, the 2010 manifesto signed by a glittering array of conservative opinion-leaders, from Grover Norquist to Ed Fulner to Tony Perkins:
We recommit ourselves to the ideas of the American Founding. Through the Constitution, the Founders created an enduring framework of limited government based on the rule of law. They sought to secure national independence, provide for economic opportunity, establish true religious liberty and maintain a flourishing society of republican self-government. …
The conservatism of the Declaration asserts self-evident truths based on the laws of nature and nature’s God.
An agenda speaking with the authority of “self-evident truths based on the laws of nature and nature’s God” and advancing the “enduring framework” of the Founders is, by definition, immutable. And in turn, that means that liberals (or, for that matter, their RINO enablers) are not simply misguided, but are objectively seeking to thwart God and/or betray America. Think that might have an impact on the tone of politics, or the willingness of conservatives to negotiate over the key tenets of their agenda?
From this point of view, all the recent carping about liberal alarm over the religious underpinnings of contemporary conservatism seems to miss the big picture rather dramatically. Both Michele Bachmann and Rick Perry have conspicuously offered themselves as leaders to religio-political activists who, whatever their theological differences, largely share a belief that God’s Will on Earth requires the repeal of abortion rights and same-sex relationship rights, radical curtailment of government involvement in education or welfare, assertion of Christian nationhood in both domestic and international relations, and a host of other controversial initiatives. Does it ultimately matter, then, whether these activists consider themselves “dominionists” or “reconstructionists,” or subscribe to Bill Bright’s Seven Mountains theory of Christian influence over civic and cultural life? I don’t think so.
Similarly, the frequent mainstream media and conservative recasting of the Tea Party as just a spontaneous salt-of-the-earth expression of common-sense attitudes towards fiscal profligacy is hard to sustain in light of the almost-constant espousal of “constitutional conservative” ideology by Tea Party leaders and the politicians most closely associated with them. Perhaps Rick Perry, just like his Tea Party fans, really is personally angry about the stimulus legislation of 2009 or the Affordable Care Act of 2010, and that’s fine. But no mainstream conservative leader since Goldwater has published a book challenging the constitutionality and morality of the entire policy legacy of the New Deal and (with the marginal exception of the Civil Rights Act of 1964) the Great Society. Ronald Reagan, to cite just one prominent example, justified his own conservative ideology as the reaction of a pure-bred New Deal Democrat to the later excesses of liberalism. Reagan also largely refrained from promoting his policy ideas as reflecting a mandate from God or the Founders, and he treated Democrats with at least minimal respect.
In that sense, major presidential candidates like Perry and Bachmann really are something new under the sun. They embody a newly ascendant strain of conservatism that is indeed radical or extremist in its claims to represent not just good economics or good governance, but eternal verities that popular majorities can help implement but can never overturn. They deserve all the scrutiny they have attracted, and more.
By: Ed Kilgore, Special Correspondent, The New Republic, August 31, 2011
“Just Say It”: For Michele Bachmann, Ignorance Is Bliss
What a wonderful world! My daughter brought me a satellite radio for my birthday and I have been listening to the classic hits of the’50s. I call the station “50s on the Five for 50-Somethings.” Unfortunately every time I hear the classic 1950s song “What a Wonderful World” by the great Sam Cooke, I think of Michele Bachmann. Why? Because of the opening words, “Don’t’ know much about history. Don’t know much biology.”
Earlier this year, Bachmann said that the Battles of Lexington and Concord, which started the Revolutionary War, were fought in New Hampshire when every school kid knows the battles were fought in Massachusetts. Any day, I expect her to say that Kaiser Willy should have been tried for war crimes for starting World War II.
Earlier this year, the conservative congresswoman described homosexuality as “sexual dysfunction.” She may be surprised to know that the American Medical Association doesn’t list homosexuality as a sexual dysfunction. Representative Bachmann has promised to release her healthcare proposal to the public shortly. Her husband tries to convince gays that they are straight and my guess is her solution to the healthcare crisis will be to convince the sick and injured that they’re felling just fine.
I would add meteorology to biology and history on the list of things she doesn’t know much about. She said that hurricane Irene was a warning to politicians to reduce government spending. Her spokesperson said the candidate made the statement “in jest”. The congresswoman has a sick sense of humor. I don’t think a joke about a disaster that killed dozens of people and caused billion of dollars in damage is very funny. I wonder what other kinds of disasters Representative Bachmann thinks are funny.
The congresswoman from Minnesota is chair of the Tea Party Caucus in the U.S. House of Representatives and her statements make her perfect for the job. The Tea Party has a new motto, “Just Say It,” which is why a recent New York Times/CBS News national survey shows the group’s negative has doubled from 18 percent to 40 percent in the last year. The nominee of the Party of Tea, the party formerly known as the GOP will drown with the weight of the Tea Party brand wrapped around him or her like an anchor.
Ever wonder why Americans dislike the Tea Party? Wonder no more. At a recent presidential campaign rally last week in Iowa, Robin Murphy of West Des Moines, Iowa, told Representative Bachmann. “I don’t like what I see in Obama—him being born in Kenya and trying to cover up the birth certificate thing. And him being Muslim and trying to pretend he’s a Christian.”
As she held Ms. Murphy’s hand, Representative Bachmann made no effort to correct the misstatements that the Iowan made about the president. The Minnesotan could have responded to her supporter with a criticism of the president for his economic policies but also reminded her that the president was born in Hawaii and is a Christian. But Representative Bachmann didn’t. If ignorance is bliss, Tea Partyers must be ecstatic.
I lost electricity, Internet, and phones for a day and a half in the aftermath of Irene. It was actually pleasant to be out of touch with the rest of the world for awhile. I knew what it was like being a member of the Tea Party.
Robin Murphy’s statements sound sweet to Tea Partyers and religious conservatives but they taste sour to the independent suburban voters who are sick of right wing rhetoric. As long as Congresswoman Bachmann and her supporters lie about the president’s background, they won’t get any play from the moderate swing voters who will choose the next president in November of 2012. I doubt Tea Partyers will change their rhetoric though because they live in a wonderful world all their own.
By: Brad Bannon, U. S. News and World Report, September 1, 2011
Austerity Versus Salvation: What Price Life?
So the big, bad storm huffed and puffed and didn’t blow all the houses in.
Reversing Katrina, on the sixth anniversary of that shameful episode in American history, the response to Irene was more powerful than Irene.
And that made some solipsistic Gothamites who missed their subways and restaurants grouchy. There is no greater abuse to New Yorkers than inconvenience.
Once the storm became “Apocalypse Not,” as The New York Post called it, there were those who accused Mayor Michael Bloomberg and Gov. Chris Christie of New Jersey of overreacting to make up for their infamous underreactions to last year’s Christmas blizzard, when Hizzoner was baking in Bermuda and the Guv was playing at Disney World in Florida with his family.
In a Wall Street Journal column, Bret Stephens suggested “a new edition of the Three Little Pigs, this one for the CYA age.”
Ordered to evacuate from his Manhattan home near the Hudson River, Stephens took his family to his parents’ wood-framed house in Connecticut, where a 50-foot elm crashed in the yard. So he went hard on the Chicken Little mayor. “What’s the wisdom of the ages,” Stephens asked, “when a mayor wants to erase the stain of mishandling last winter’s snowstorms by forcibly relocating people from his zone of responsibility to places that are somebody else’s zone of responsibility?”
Should those whose job it is to prepare for the worst be punished because the worst didn’t happen?
What determines your judgment of politicians’ reaction is what happens to you. Those washed out from North Carolina to New Jersey to Vermont don’t think government overreacted. As Mel Brooks once said, “Tragedy is when I cut my finger. Comedy is when you walk into an open sewer and die.”
Asked at a Saturday hurricane briefing about the response in relation to the debate about the role of government, Christie made it clear that saving lives was the most important thing. The Republican said he didn’t think that Democrats and Republicans were debating this: “Protecting the safety of our citizens is one of the bedrock roles of government.”
Not so bedrock for some of the Flintstones types in Washington who are now hotly debating austerity versus salvation. The impressively hands-on performances of Christie, Bloomberg and Gov. Andrew Cuomo of New York were not enough to make Tea Partiers, Republican presidential candidate Ron Paul and Republican House Majority Leader Eric Cantor root for big government against rampaging nature.
Paul, a libertarian whose scorn of government is so great that he doesn’t even want it to coordinate in natural disasters, insisted that FEMA, which he calls “a giant contributor to deficit financing,” should be shut down.
Though his state of Virginia was the epicenter of an earthquake before being hit by Irene, Cantor has insisted that additional money for cash-strapped FEMA must be offset by spending cuts, echoing his remarks in May that money sent to traumatized tornado victims in Joplin, Mo., would mean cuts somewhere else.
The callous comments about disaster relief in recent days by Cantor, Paul and, believe it or not, the disgraced former FEMA Chief Michael “Heck of a job, Brownie” Brown infuriated Bernie Sanders, the independent Vermont senator touring his inundated state. He told Carl Hulse of The Times that coming together to help on disasters “is what being a nation is about.”
In a briefing at the White House Monday, FEMA Director Craig Fugate said that the lesson of Katrina is for the federal government to “get things going earlier” and not wait until an overwhelmed state “says we’re going to need help.”
Too bad that didn’t occur to W. in 2005. He met with Gov. Kathleen Blanco of Louisiana and New Orleans Mayor Ray Nagin on Air Force One and correctly assessed that they were not up to the job but then retreated behind clinical states’ rights arguments as a great American city drowned.
In his new memoir, Dick Cheney faults Blanco for dithering and not requesting that the president federalize the response to Katrina. It’s a variation on Rummy shrugging that “You go to war with the army you have.”
Always the hard-liner, Cheney notes: “President Bush has written that he should have sent in U.S. troops earlier, which may be true, but which to my mind lets state authorities off the hook too easily.” Why save lives if you can slap bumbling Democrats around? Proving once more that he is truly delusional, Vice praised President Bush in the wake of Katrina for “reaching out to people who needed to know that their government cared about them.”
The awful hypocrisy is this: As we saw when they spent trillions trying to impose democracy on Iraq and Afghanistan, W. and Cheney believe in big government, in a strong, centralized executive power. But with Katrina, they chose not to use it.
By: Maureen Dowd, Op-Ed Columnist, The New York Times, August 30, 2011
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