Does GOP Really Want To Increase Taxes On The Middle Class?
As the Senate considers an extension of the payroll tax holiday, the big question is: why in the world would Republicans in Congress consider raising middle class taxes by $1,000 to $1,500 per household in the midst of an economic downturn and an election year?
This is a particularly vexing question when you recall the ardor with which the GOP has campaigned against raising the taxes paid by millionaires and billionaires by even one dime.
At the beginning of the week it appeared that virtually every Republican in the Senate was prepared to vote no on a Democratic proposal to extend and broaden the current payroll tax holiday.
Now some are beginning to get cold feet. Senate Republican Leader Mitch McConnell has now reportedly “opened the door” to considering the possibility of a payroll tax cut extension.
But the real question is why Republicans would contemplate voting against extension of the payroll tax holiday in the first place?
Voting no would be like leaping off a political cliff — taking an iconic vote that would no doubt become emblematic of the fact that they are willing to sacrifice the interests of the 99% to protect the fortunes of the wealthiest people in America. John Paulsen — the Wall Street hedge fund manager who made $5 billion last year (that’s $2,400,000 per hour!) — might consider this a courageous stand. But the everyday worker — who will take 48 years to make as much as Paulsen makes in one hour — might not be so charitable.
Perhaps, you might say, it’s because Republicans are taking a strong principled stand against raising the deficit. But that would not be the case, since the Democratic proposal is entirely paid for by a small increase in the taxes of millionaires.
What on earth could drive Senate Republicans to consider taking such a stupid vote? Four possibilities jump to mind.
1). Possible Reason Number 1: They claim the extension of the payroll tax holiday will undermine Social Security and Medicare.
Republican Senator Jon Kyl made this argument on the weekend talk shows. We can dismiss this talk as a complete smoke screen.
First, Senator Kyl and the Republicans have never given a rat’s rear about Social Security and Medicare in the first place.
Second, the payroll tax holiday that was passed last year does not remove one dime from the Social Security or Medicare trust funds. In fact, the lost payroll tax is replaced dollar for dollar from the Federal general revenue fund.
The payroll tax holiday itself is simply a means of putting money directly into the pockets of working people that is then replaced with money from the much more progressive overall Federal tax structure.
2). Possible Reason Number 2: Some Republicans really don’t believe that taking $1,500 out of the paychecks of everyday consumers will hurt the economy.
There are apparently some Republican lawmakers who have drunk the “Keynesian Economics Doesn’t Work” Kool-Aide. They actually believe that the only way to stimulate economic growth is to shovel more and more income into the hands of the top 1% — the “job creators” — and watch that money “trickle down” on the rest of us.
The problem is that there is absolutely no evidence that “trickle down” economics works — or ever worked.
We had an actual experiment with “trickle down” economics during the Bush Administration. The Republicans cut tax rates for the wealthy. The rich got a lot richer, and the median income of everyday families actually dropped. In fact it was the first decade in modern history that the economy did not create one net private sector job.
But — the Republicans say — two and a half years ago Congress passed a huge stimulus bill, and we still don’t have enough jobs.
Of course, they forget to mention that at the time, the economy was shedding hundreds of thousands of jobs because the financial system had collapsed as a result of the very same policies they are now advocating once again. And there is the inconvenient fact that since the stimulus worked its way through the economy, we have had 20 straight months of private sector job growth — whereas during the last twelve months of the Bush Administration we lost massive numbers of private sector jobs.
Of course a good deal of that private sector growth has been offset by the Republican refusal to continue the stimulus bill’s aid to state and local governments. That resulted in layoffs of teachers, firefighters, police officers — and other public service workers who they must presume do not hold “real jobs.”
The problem with the stimulus bill was not that it didn’t work. The problem was that it wasn’t big enough. Republicans remind you of a guy who uses a hose to put out half of a house fire, turns off the water and then contends that water doesn’t put out fires because the entire fire hasn’t been extinguished. The obvious answer is to get more water. Not only do the Republicans want to stop pouring on the water of stimulus — they want to pour on the gasoline of austerity — just the opposite of what is needed to put out the bad economic flames.
When an economy is in recession the problem — by definition — is too little demand to absorb the goods and services that the economy can produce. The way to solve the problem is to generate more demand to jump-start the economy. This is not just a matter of opinion — it’s a matter of mathematics.
Republicans who run around claiming that economic stimulus — money in consumer pockets — isn’t what’s needed to stimulate economic growth are like people in the middle ages who refused to believe that the earth circles the sun. If the evidence doesn’t support their ideological frame, they throw out the evidence — not the ideological frame. They ignore the facts. It makes no more sense for them to vilify “Keynesians” than it did for an earlier generation to vilify “Copernicans.”
There is complete economic consensus that eliminating the payroll tax holiday today will be a disaster for the economy. In fact, economists like Mark Zandi — who advised John McCain’s campaign — argue that if the payroll tax holiday is not extended, it will shave 1.7% off the gross domestic product and throw the economy into a double dip recession.
3). Possible Reason Number 3: The Republicans oppose extending the payroll tax holiday, because President Obama is for it.
That’s certainly their knee-jerk response. They believe that anything that makes Obama look effective hurts Republican chances in 2012.
But they have some big problems here. First, many Republicans supported a payroll tax holiday in the past — and many voted for the original holiday last year. If they form a solid wall of opposition, they will look like hypocrites who changed their position simply to hurt their political opponents.
And, second, the entire issue puts them in political box canyon — with no escape. If they oppose extension they look like they are obstructing something that is good for the economy — and very palpable to everyday voters. If they support an extension, they give the President a victory.
4). Possible Reason Number 4: Republicans actually understand that ending the payroll tax holiday will hurt the economy — and that’s exactly what they want to do.
There are clearly some Republicans in Congress who actually believe that ending the payroll tax holiday won’t hurt the economy. But there are a lot of Republicans who know exactly what will happen and would be perfectly happy to hurt the economy.
In fact, the Republican leadership has laid a bet that if the economy continues to stagnate they are that much more likely to defeat Democrats next fall. They know that no President in a hundred years has been re-elected when the economy was not materially improving. And they are certainly right that a major issue in next year’s election will be who is responsible for the lousy economy.
Their problem is that by supporting an increase in the payroll tax that takes $1,500 out of the pockets of every middle class family, they create an iconic example of why the real problem is the “do-nothing Republican Congress.”
Sixty-seven percent of Americans believe that Congress is completely controlled by Republicans. And even though the Senate leadership is Democratic, the Republican willingness to stop action using the filibuster means that they are, in fact, entirely responsible for preventing action to create jobs.
That’s good news for Democrats, since in some polls only 9% of Americans have a positive view of Congress and overwhelming numbers believe the country is on the wrong track.
That means that Democrats in Congress can run as outsiders who want to break the log jam in Congress and take action on jobs — take action to defend the middle class. It means that the President can lay the blame for the lousy economy directly at the doorstep of the Republican Party – and its nominee.
The battle over the extension of the payroll tax holiday plays right into that narrative. It is a huge problem for the Republicans in Congress. Bad enough that the “do-nothing Republican Congress” is doing everything it can to oppose President Obama’s agenda to create jobs. Taking $1,500 out of the pockets of everyday Americans gets downright personal.
That’s why, when the chips are down, the odds are good that the Republican leadership will fold its hand and support extension of the payroll tax holiday.
By: Robert Creamer, The Huffington Post, November 30, 2011
Economic Inequality And Tax Fairness: What Newt Gingrich Doesn’t Want Us To Talk About
Over the last three decades, wealth has become increasingly concentrated at the top. The middle class is struggling with stagnant wages and a growing class gap; poverty rates are soaring; the jobs crisis seems never-ending; and a growing number of Americans are suggesting it’s time for a larger conversation about economic inequalities and tax fairness.
Newt Gingrich believes that conversation must not occur. In fact, the Republican presidential candidate questions the patriotism of those who choose to draw attention to the problem.
“I repudiate, and I call on the President to repudiate, the concept of the 99 and the 1. It is un-American, it is divisive, it is historically false…. You are not going to get job creation when you engage in class warfare because you have to attack the very people you hope will create jobs.”
Even for a candidate who says truly ridiculous things on a daily basis, this is extraordinary.
Let me get this straight. A disgraced multi-millionaire, who’s run an ethically-sketchy “business conglomerate” while spending vast amounts of money on high-priced jewelry for this third wife, feels comfortable lecturing struggling Americans about even noticing the growing class gap.
And no one finds this disqualifying for national office?
When Republicans demand the middle- and lower-classes sacrifice, while shielding millionaires and billionaires from any concessions at all, the American mainstream isn’t even supposed to talk about it? When GOP policies impose a new Gilded Age on society, it’s “un-American” to even debate the propriety of the regressive agenda?
Since when is it consistent with the American tradition to try to shut down a debate over fairness and economic justice? For that matter, since when is it an “attack” on the extremely wealthy to ask them to pay Clinton/Gingrich-era tax rates that allowed the rich to thrive in the 1990s?
What’s more, let’s also not overlook Gingrich’s selective approach to unity. Today in South Carolina, Gingrich said it’s un-American and divisive to pit a majority against a minority. But as my friend Kyle Mantyla noted today, Gingrich said the opposite at the recent “One Nation Under God” event where he told religious right activists “that they are the majority in the country who must stand up and take this nation back from the ‘minority elite’ who are ruining it.”
So to recap, when it comes to the economy, Gingrich believes we’re all one people, and we must pay no attention to the wealth that divides us. When it comes to the culture war, we’re not one people, and those who believe as Gingrich does should target and defeat those Americans who disagree.
If a right-wing voice rails against the “minority elite,” he’s speaking the truth. If an Occupy activist rails against the “minority elite,” he’s an un-American radical.
Got it.
By: Steve Benen, Contributing Writer, Washington Monthly Political Animal, November 29, 2011
Are Evangelicals A National Security Threat?
If you have the stomach to listen to enough right-wing talk radio, or troll enough right-wing websites, you inevitably come upon fear-mongering about the Unassimilated Muslim. Essentially, this caricature suggests that Muslims in America are more loyal to their religion than to the United States, that such allegedly traitorous loyalties prove that Muslims refuse to assimilate into our nation and that Muslims are therefore a national security threat.
Earlier this year, a Gallup poll illustrated just how apocryphal this story really is. It found that Muslim Americans are one of the most — if not the single most — loyal religious group to the United States. Now, comes the flip side from the Pew Research Center’s stunning findings about other religious groups in America (emphasis mine):
American Christians are more likely than their Western European counterparts to think of themselves first in terms of their religion rather than their nationality; 46 percent of Christians in the U.S. see themselves primarily as Christians and the same number consider themselves Americans first. In contrast, majorities of Christians in France (90 percent), Germany (70 percent), Britain (63 percent) and Spain (53 percent) identify primarily with their nationality rather than their religion. Among Christians in the U.S., white evangelicals are especially inclined to identify first with their faith; 70 percent in this group see themselves first as Christians rather than as Americans, while 22 percent say they are primarily American.
If, as Islamophobes argue, refusing to assimilate is defined as expressing loyalty to a religion before loyalty to country, then this data suggests it is evangelical Christians who are very resistant to assimilation. And yet, few would cite these findings to argue that Christians pose a serious threat to America’s national security. Why the double standard?
Because Christianity is seen as the dominant culture in America — indeed, Christianity and America are often portrayed as being nearly synonymous, meaning expressing loyalty to the former is seen as the equivalent to expressing loyalty to the latter. In this view, there is no such thing as separation between the Christian church and the American state — and every other culture and religion is expected to assimilate to Christianity. To do otherwise is to be accused of waging a “War on Christmas” — or worse, to be accused of being disloyal to America and therefore a national security threat.
Of course, a genuinely pluralistic America is one where — regardless of the religion in question — we see no conflict between loyalties to a religion and loyalties to country. In this ideal America, those who identify as Muslims first are no more or less “un-American” than Christians who do the same (personally, this is the way I see things).
But if our politics and culture are going to continue to make extrapolative judgments about citizens’ patriotic loyalties based on their religious affiliations, then such judgments should at least be universal — and not so obviously selective or brazenly xenophobic.
By: David Sirota, Salon, November 29, 2011
Is Mitt Romney The Candidate Of The “One Percent”?
A number of people are pointing to this scorching quote from Joe McQuaid, the publisher of the New Hampshire Union Leader, explaining the paper’s decision to endorse Newt Gingrich over Mitt Romney:
“I think — and this is crazy, but so are we — that Gingrich is going to have a better time in the general election than Mitt Romney,” publisher Joe McQuaid told FOX News. “I think it’s going to be Obama’s 99% versus the 1%, and Romney sort of represents the 1%.”
Aside from the obvious humor value here, this actually gets at something serious: The possibility that Mitt Romney’s tax rates, and not just his corporate past and support for cutting taxes on the wealthy and corporations, amount to an unexplored vulnerability in a general election. Because he gets income from investments, Romney would have paid roughly 14 percent of his income in taxes in 2010, according to the Citizens for Tax Justice — lower than the rate paid by many middle class taxpayers.
Wait, there’s more. According to Bloomberg News, Romney is now benefitting from the fundraising of Stephen Schwarzman, the chairman of the world’s largest private equity firm, who is also soliciting help for Romney from colleagues. Bloomberg presents this as a sign that Romney is “closing the sale with Wall Street’s wealthiest donors.”
But there’s more to it than this. As Pat Garofalo notes, Schwarzman is also well known as a warrior against efforts to close loopholes that benefit private equity firms. Indeed, this new Romney supporter has even compared his battle against such efforts to World War Two:
“It’s a war,” Schwarzman said of the struggle with the administration over increasing taxes on private-equity firms. “It’s like when Hitler invaded Poland in 1939.”
Obviously, people like Schwarzman will back the GOP nominee, whoever he is, and Dems will likely highlight this kind of thing to paint the eventual GOP nominee, whoever he is, as in the pocket of Wall Street. But the fact that Romney himself personally benefits from aspects of the tax code that Obama wants to change makes him a less-than-ideal messenger to deliver criticism of Obama’s push for tax fairness, and will likely make Dem attacks along these lines more potent. After all, Dems can argue that not only do the Schwarzmans of the world prefer Romney’s policies, but on top of that, Romney himself is actually one of them. You can’t say that about Newt.
This general election vulnerability is being obscured right now, because for obvious reasons, it isn’t an issue in the GOP primary. But the Obama team has taken note of this weakness — and Obama surrogates are likely going to work very hard to exploit it — even if it isn’t getting much attention right now. It seems like Republicans who are evaluating Romney’s strengths and weaknesses as a general election candidate might want to consider how this will play next year, particularly if resurgent populism continues to help shape the political environment, as many expect it to do.
By: Greg Sargent, The Washington Post, The Plum Line, November 28, 2011
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