Democrats and Republicans in Congress are pretending to argue about tax cuts. With the federal government deeper in the red than ever before, it might seem like a strange time to cut taxes, but because so many Americans are struggling, the Democrats say they’d like to extend the Bush tax cuts for everybody who makes less than $250,000 a year. Everybody who makes more than $250,000 would start paying the normal tax rate again. Republicans say that’s intolerable. Everybody should get a tax cut, including people who make more than $250,000 a year. They’re so angry about it that they’ve gone out on strike.
All forty-two Republican senators have signed a letter vowing not to allow the Senate to vote on any other bill unless and until tax cuts for the wealthy have been secured. That is, they want the Bush tax cuts — all of them — and they’re holding the country hostage until they get them. Please read their letter; you can see it as a PDF file or as a page on this blog.
Let’s take a closer look at the snake oil the Republicans are selling. Not trying to sell, but selling. You can bet your hat, ass, and overcoat that the Republicans will win this sham battle. Neither Obama nor Reid will stand up to the Republicans and point out what they’re doing. Neither will deal with this by taking the argument to the American people in any serious way. Reid will not force a real filibuster on any bill. Obama and Reid will cave. They will blame their failure on the Republicans. Count on it. Never forget that both parties have the same corporate masters. So let’s see the argument our elected leaders are about to buy on our behalf.
They claim to be concerned about the “increase” in taxes for “all Americans.” There’s no real increase; we’re talking about an end to what were supposed to have been temporary tax cuts. And the “increase” doesn’t affect all Americans, since both parties agree on extending the tax cuts for taxpayers making less than $250,000 a year — in other words, 97 to 98 percent of the population. We’re not talking about increasing taxes for all Americans. We’re talking about allowing a temporary tax cut to expire for the richest two or three percent of Americans only. That’s why the Republican senators are on strike. Further, they openly — even proudly — declare that there is nothing more important to them than extending these tax cuts for the richest two or three percent of Americans.
They thought this would go down a little easier if they could come up with some high-sounding motive for making it their very highest priority. The one they came up with: Extending tax cuts for the rich will create jobs. This is the same old Republican trickle-down economics they’ve always advocated, with results that have been disastrous for the country. Trickle-down economics doesn’t work. All it does is make the rich richer, and the poor poorer. Does it create jobs? Yes, but very few, and not enough to make up for the lost revenue. Certainly not enough to have any impact on our current unemployment problem. Trickle-down economics is just a way of using your government to transfer money from you to the wealthy. That’s what the Republicans are insisting on right now, during the worst economic crisis since the Great Depression: They want to rob the middle class and give to the rich.
It’s not even a new policy. Their solution to rampant unemployment, and their highest priority, is to keep doing what we were doing when we got into this mess. Has it been working up to now? Of course not. But they could argue that employment is down because all these “small businesses” know their taxes will be going up. If we could make their tax cuts permanent, or at least extend them for a few more years, they’d feel more secure and start hiring. After all, the small business owner has to fight to keep her head above water, especially in times like these. Can we really afford to increase taxes on more than 750,000 small businesses at a time like this?
Gee, that does sound kind of bad. If that’s really the issue, though, wouldn’t it make sense to make some kind of exception for small business owners? Say, for businesses with fewer than fifteen employees? Or fifty — just pick a number, so we know what we’re talking about. Or we could say businesses with incomes below a certain dollar amount. If we’re worried about small businesses, let’s address the problems of small businesses. There’s absolutely no reason to hand out tax cuts to everybody, even the very richest people in the country, because we’re worried about small businesses.
Silly taxpayer, that wouldn’t work at all. When you think of small businesses, you probably mean local, family-owned businesses — restaurants, small stores, small factories, and so on. That’s not what our 42 Republican senators mean by small businesses. Their definition of “small businesses” — and I’m not even kidding, hard as it is to believe — includes businesses that, in the words of a Washington Post staff writer, “can be extremely large.” The “small businesses” the Republicans are so worried about include
[t]he management team at Wall Street buyout firm Kohlberg, Kravis and Roberts (KKR), which recently reported more than $54 billion in assets managed by 14 offices around the world. Auditing firm PricewaterhouseCoopers, a household name with operations in more than 150 countries. And the Tribune Corp., which owns the Chicago Tribune, the Los Angeles Times and the Baltimore Sun.1
They also include Bechtel Corporation,2 which as of 2009 had 40,000 employees in 50 countries and $31.4 billion in revenue.3
Those are the kinds of businesses the Republicans are calling “small” in a transparent bid to get you to offer free money to all of the richest and most powerful people in the United States. And you, in the persons of your elected representatives, are about to do exactly that. Your members of Congress, both Democrats and Republicans, are about to kick you when you’re down. Again. Your President will call it a bipartisan agreement. For once, he’ll be telling the truth.
1 Lori Montgomery, “House Dems: Many businesses that face Obama tax hike are too big to be labeled ‘small'” (Washington Post, 17 September 2010).
2 Pat Garofalo, “Facts vs. Fiction: Conservatives Claims About Small Business Taxes Are Bogus” (Center for American Progress). See also Brian Beutler, “GOP: Bechtel, PricewaterhouseCoopers And Other ‘Small Businesses’ Will See Tax Hike” (Talking Points Memo).
3 Wikipedia, “Bechtel.” I have a lot more to say about Bechtel, but it’s not relevant to this particular topic.