The current posturing in Washington D.C. over the expiration of the "Bush Tax Cuts" is predictably reminiscent of what occurs when -- well, you fill in the blank. This latest lame duck congress has one option, extend the cuts, all the cuts, period. The time for discussing options has passed. Politically, it has been run out of town on the proverbial rail. The Democrats have nothing further relevant to add in the matter. That ship sailed with the Recovery Act and the Health Care bill. These moves were costly and created a vacuum for the opposition to piggyback the oldest protest in the books; taxation. Therefore, any further blather about whether this government will allow the entire shebang to go down is off the table.
Also off the table is the yammering about the national debt or the massive U.S. deficit. These are buzz words for campaign ads and canned speeches. No one, and we mean no one has the balls in this woeful economy to begin tightening strings and begging national sacrifice. It is as doomed a plan as it was when poor Jimmy Carter hatched it and any such notion would likely swing the electorate back to the president come 2012.
Debt mongering is suicide for the burgeoning Republican movement, which is half fabricated and a third hocus-pocus anyway. Republicans will have their own internal struggles come the inevitably necessary but ideologically embarrassing raising of the debt ceiling around springtime. That is when we'll learn all we need to know about the smoke and mirrors TEA Party movement, which by all accounts was really something Dick Army and Fox News dreamed up.
Now, lets deal in realities, albeit, limited realities.
The president and his recently eviscerated party has proposed raising the limit on whom would receive the benefits of a nada increase, from the originally proposed $250,000 a year to $1 million. Let that read from the merely affluent to the outright wealthy. It should be noted that the arbitrary $1 million mark ignores an interesting nugget; if one takes into to consideration the normal standard or living increases, $250,000 becomes over $350,000, and yet no one addresses this.
Erroneously repeated information is an American tradition. Just as we wink-wink still celebrate (and teach in schools by the way) Columbus, who actually crash landed in what is now the Bahamas, as some sort of discoverer of North America when the Vikings beat him by 400 years. The political voices keep repeating $250,000! $250.000! as if it's real. Anyone taking two seconds to check what the standard of living was in 1993 when the pre-Bush, Clinton tax code was in effect would rightly translate it to the aforementioned $350.000.
But what do you expect from people who vote for and against a bill they didn't read or understand (and still don't, by that way) and then actually run for re-election on this pitiable stand?
Certainly the $250,000 vs. $1 million is class warfare, but this, like accepting and passing down myth as historical record, is nothing new. This country was built on class warfare, even the blatantly ill-informed dunderheads on cable television who bray endlessly about founding fathers can attest to that. The idea that the rich make the most from the American capitalist system and should thus pay more, despite the obvious fact that they already pay more by percentage (and we conspicuously exclude corporate entities that according to a widely publicized 2008 Government Accountability office study determined that from 1998 to 2005 67 percent of American corporations paid no Federal Income taxes) is an abject failure.
The wealthy provide the jobs and investments needed to keep the country afloat, never mind moving in the direction of a recovery; this is agreed to by even those who moderately espouse more stringent government regulations on international trade, environmental issues and books cooking. The stabilization of the tax code is critical for this bracket, and although perhaps a roughly estimated eight percent of the national debt could begin to be slashed by a $1 million threshold effort, the damages could be severe in the short term.
And the short term is always the prime consideration in The District.
On the heels of an upheaval in the electorate last month and the very real continued national expenditures on the military occupation of two countries and a massive entitlement system that will never be broached by any politician interested in future employment, taxes cannot and will not be raised.
The political question is still out there; who benefits?
Right now Republicans have the popular talking points, despite the actual facts that middle class taxpayers had their greatest relief as part of the original stimulus package and the across-the-board marginal tax rate being generally lower under the Obama administration than at any time under anti-tax hero, Ronald Reagan, not to exclude the generally accepted fact among credible economists that the original Bush Tax Cuts sank job growth for the first two years of its existence.
Democrats, as is their wont, run scared. This time it is warranted. There is more than mere tax rates and class warfare on the docket. There are capitol gains, estate taxes, corporate taxes and certain marriage penalties and child deductions to consider; all of which are sticking points to the argument, which currently cannot be won by the party in power.
This is why at the time of this writing, Senate Minority Leader Mitch McConnell headed up a Republican vow to block any new bills in congress unless the tax issue is resolved, making it appear as if the GOP and not Obama is answering the call of the American electorate. It also sets up a nice challenge to the White House to keep a government shutdown in the offing, an ill-fated tactic of Newt Gingrich's "revolution" in 1994, which eventually ushered in Bill Clinton's comeback two years later.
Letting the Bush Tax Cuts, much of which was never budgeted and were badly planned and bared little fruit, to lapse at this point would be an economic disaster and certainly stem the tide of GOP support and further erode any kind of political traction the Democrats could hope for. With a few weeks to go before the deadline and the Christmas break approaching, there is little choice but to extend them all. The only question for Washington will be at what political gain?