Tax Cuts For Thee, Tax Cuts For Me
by Alan Bedenko (@BuffaloPundit) - posted 7:30 am, August 1, 2012
There is an impasse brewing in Washington over the Bush-era, post-9/11 stimulus made up entirely of income tax cuts.
This is the same stimulus plan that has been in effect throughout the current economic uncertainty, and the recent global economic meltdown that took place, and has done little to make sure wealth trickles down, or to create jobs.
It’s becoming part of the NY-27 race, in particular. Republican Chris Collins paints himself as the small business everyman, and called on Representative Kathy Hochul (D) to vote to extend tax cuts even to the wealthiest Americans. Collins claims millions of small businesses, who aren’t hiring now, would be forced to not hire people (what, like even worser?!) if the Bush tax cuts for the wealthy aren’t extended. Essentially all of the $1 million+ earners in the country are not “small business owners”; only about 2.5% of small businesses would be affected. It would also expend the deficit by another trillion dollars, so it’s what we call “fiscally not particularly conservative”.
In fact, since Reaganomics and trickle down/supply-side economics became de rigeur, wages haven’t stagnated for average Americans – they’e “plummeted”. Wealth hasn’t trickled down to anyone, unless maybe you own a Bentley or yacht dealership.
No, we shouldn’t begrudge the rich their wealth. However they got it, they’re quite entitled to it. By the same token, we need to stop the hagiography about them being “job creators” without whom our civilization would crumble. Ayn Rand isn’t the treasury secretary.
President Obama and the Democrats would like to put an end to the tax cuts to the wealthiest Americans. What does that mean?
What it means is that everyone gets to keep the Bush-era tax cut up to the first $250,000 of annual income – even notable job creators like Paris Hilton and Kim Kardashian. Here’s the average annual tax savings if the middle-income cuts are maintained, but the high-income cuts are abolished:
Still a pretty good deal, right? Anyone else getting the idea that Collins’ argument is more about self-interest than policy? The problem is that many genuine small businesses rely on the middle class to buy their goods and services – directly or indirectly. The best way for that to happen is for people to have money in their pockets and the confidence to spend it. Millionaires never, ever have a problem with either of those factors. As we see above, extending the middle-class tax cuts provide a significant benefit across the income spectrum.