Thursday, September 16, 2010

The Party Of Tax Cuts For Millionaires

So now the Democratic Party is the party of tax cuts for millionaires and billionaires? When the hell did that happen?
Washington (CNN) – Thirty-one House Democrats, most of whom face tough re-election bids this fall, have signed a letter to House Speaker Nancy Pelosi and House Majority Leader Steny Hoyer urging them to extend expiring tax breaks for all income levels, including the wealthy.
Apparently this happened when a few Democrats started to wet their pants over the prospect of losing re-election. These 31 House Democrats want to give millionaires and billionaires tax cuts that will add $700 billion to the deficit that they claim to care so much about. Apparently the conventional wisdom is that a Bush Tax Hike® (hey, he’s the one who designed them to expire this year, remember?) is not a good idea during a down economy.

I just have one question for you people: if giving the nation’s upper 2% of income earners a tax cut was such a brilliant economic stimulus, why the fuck are we in this mess to begin with?

Paul Krugman did a nice piece explaining why high end tax cuts don’t deliver enough “bang for the buck.” If Krugman is too much of a Dirty Fucking Hippie for you, let me direct you to Moody’s:
Tax cuts in 2001 and 2003 under President George W. Bush were followed by increases in the saving rate among the rich, according to data from Moody’s Analytics Inc. When taxes were raised under Bill Clinton, the saving rate fell.

So if the goal is economic stimulus, giving rich people a tax cut won’t do the trick.

But it doesn’t matter if this is good policy or not, because this isn’t about policy. This is about politics. This is about 30+ Democrats in the House who are scared they are going to lose re-election. That’s all these things are ever about: the politics, not the policy. And this is why the Democrats are in trouble. Because if we had people in Washington worried more about governing, not getting re-elected, then maybe we’d have some actual workable policies in place, not more Republican-lite crap. Maybe our economic stimulus would have been stronger and maybe our recession would have been over and maybe people would be back at work and maybe we wouldn’t be talking about letting “Bush-era tax cuts expire” but instead talking about the coming Bush Tax Hike® and maybe those 30+ Democrats wetting themselves over losing re-election might actually be in a stronger position today because the economy is stronger.

But that’s my alternate hippie liberal fantasyland. In the real world we have Democrats who think governing like Republicans is the surest way to success. Despite the fact that time and time again they are proved wrong, they keep doing it.

What a strange world we live in.

[REMINDER]: The tax cuts were set to expire so Congress could pretend they won't add to the deficit:

One of the most notable characteristics of EGTRRA is that its provisions are designed to sunset, or revert to the provisions that were in effect before it was passed. EGTRRA will sunset on January 1, 2011 unless further legislation is enacted to make its changes permanent. The sunset provision sidesteps the Byrd Rule, a Senate rule that amends the Congressional Budget Act to allow Senators to block a piece of legislation if it purports to significantly increase the federal deficit beyond a ten-year term. The sunset allowed the bill to stay within the letter of the PAYGO law while removing nearly $700 billion from amounts that would have triggered PAYGO sequestration.

It was a dodge, plain and simple. So does the deficit matter or doesn't it? Who among the Teanuts wants to take that one?