Out of Touch, Out of MindPosted: April 20, 2011
The deficit burble in the beltway appears to be happening without the consent or input of the governed. If polls are any indication, the congress and the White House are moving the exact opposite direction of public will. First, it’s been clear for some time that the majority of people think raising taxes on the rich and letting the Bush Tax Cuts for Billionaires go away is the correct prescription. They thought that when Obama joined the Tax Cuts for Billionaires club and their opinions still haven’t changed.
Alarmed by rising national debt, Americans are clear about how they want to attack the federal government’s runaway budget deficits: raise taxes on the wealthy and keep hands off Medicare and Medicaid.
At the same time, the new McClatchy-Marist poll of the nation found that voters don’t want the debt ceiling raised, despite warnings that failing to do so would force the government into default and the economy into a tailspin.
By a 2-1 ratio, voters support raising taxes on yearly incomes above $250,000.
It’s even more clear what voters think about the slashing and hacking of Medicare, Social Security, and Medicaid. It’s a big ol’ resounding Hell NO!!
The Post-ABC poll finds that 78 percent oppose cutting spending on Medicare as a way to chip away at the debt. On Medicaid — the government insurance program for the poor — 69 percent disapprove of cuts.
There is also broad opposition to cuts in military spending to reduce the debt, but at somewhat lower levels (56 percent).
In his speech last week, the president renewed his call to raise tax rates on family income over $250,000, and he appears to hold the high ground politically, according to the poll. At this point, 72 percent support raising taxes along those lines, with 54 percent strongly backing this approach. The proposal enjoys the support of majorities of Democrats (91 percent), independents (68 percent) and Republicans (54 percent). Only among people with annual incomes greater than $100,000 does less than a majority “strongly support” such tax increases.
Let me first suggest a few things. First, remove deductions on second mortgages, boats, and overpriced McMansions. If it’s not an average family home, it doesn’t need a tax subsidy. Second, equally tax investment and labor income. There should be no tax privileges given to rich people that inherit wealth and then spend their days sitting around reaping profits from speculation. I agree with Katrina Vanden Heuvel of The Nation that calls this policy “Tinkle Down” economics. It’s really bad policy and it’s supremely unfair.
Then in December, the Obama-GOP deal extended the Bush tax cuts for the wealthy at a two-year cost of about $70 billion a year. Now Congress is making $40 billion in painful budget cuts this year. Meanwhile, President Obama, Representative Paul Ryan and others are battling over budgets and tax plans for the next decade and beyond. For the most part, what’s been missing from these suffocatingly narrow discussions is an easy source of income: taxing investments like ordinary income.
The folks over at Responsible Wealth believe not only that the Bush tax cuts on upper-income folks should be ended but also that money made from money (i.e., capital gains and dividends) should be taxed like money made from work, not at the preferential 15 percent rate. They have a simple calculator that calculates your tax savings using just three numbers from your tax form (or from your head), and an interactive graph with videos of people talking about their taxes. It’s worth checking out at responsiblewealth.org.
Taxing capital gains and dividends at regular income rates would save $84.2 billion in 2011 alone, twice the amount we’re cutting from this year’s budget.
I guess Congress thinks we’re all dumb Americans who can’t do math. However, people must be getting tired of the media meme on how brave and courageous Paul Ryan is by suggesting we throw grandma from the train. Even his own district isn’t buying it. About time.
During a town hall meeting in Milton, a constituent who described himself as a “lifelong conservative” asked Ryan about the effects of growing income inequality in our nation. The constituent noted that huge income disparities contributed to the Great Depression and the Great Recession, and thus wanted to know why the congressman was “fighting to not let the tax breaks for the wealthy expire.”
Ryan argued against “redistribut[ing]” in this manner. After the constituent noted that “there’s nothing wrong with taxing the top because it does not trickle down,” Ryan argued that “we do tax the top.” This response earned a chorus of boos from constituents:
CONSTITUENT: The middle class is disappearing right now. During this time of prosperity, the top 1 percent was taking about 10 percent of the total annual income, but yet today we are fighting to not let the tax breaks for the wealthy expire? And we’re fighting to not raise the Social Security cap from $87,000? I think we’re wrong.
RYAN: A couple things. I don’t disagree with the premise of what you’re saying. The question is what’s the best way to do this. Is it to redistribute… (Crosstalk)
CONSTITUENT: You have to lower spending. But it’s a matter of there’s nothing wrong with taxing the top because it does not trickle down.
RYAN: We do tax the top. (Audience boos). Let’s remember, most of our jobs come from successful small businesses. Two-thirds of our jobs do. You got to remember, businesses pay taxes individually. So when you raise their tax rates to 44.8 percent, which is what the president is proposing, I would just fundamentally disagree. That is going to hurt job creation.
This does not hurt job creation. It didn’t hurt job creation in the Eisenhower years. It didn’t hurt job creation in the Clinton Years. Also, remember Reagan presided over the biggest tax increase in history, do they argue that job creation was rotten by the end of the Reagan years? This is a ridiculous argument based in that old Laffer Curve and Supply Side, VooDoo economics that they just keep resurrecting. Even two of Reagan’s advisers–Bruce Bartlett and David Stockman–are out decrying that fairy tale. It’s simply not backed by history, disproved by past economic performance, and insane.
The Democratic Party and the White House should be reading these poll numbers and discussing the facts RIGHT now. They should–at the very least–end the Bush/Obama preferential tax treatment for the rich. Paul Ryan and his ilk need to be outed for the charlatans they are on every talk show. I have no idea why this isn’t being done unless there’s a huge beltway conspiracy between the media, the Republicans, and the Democrats to carry on with no regard to voter’s wishes or interests.