THE 2010 TAX DEAL


UNDER THE TAX DEAL, THE AVERAGE TOP 2% HOUSEHOLD GETS $41,000 PER YEAR

THE AVERAGE BOTTOM 98% HOUSEHOLD GETS $2600 PER YEAR


I did the rough calculations on the the concessions the Republicans insisted on to allow the nation's work (including ratification of an important nuclear arms control deal) to go forward: Those earning over one-quarter of a million dollars a year, the top 2%, got $163 billion in income and estate tax cuts - working out to $74,000 over two years for each average top 2% household.


Meanwhile, the bottom 98% got $600 billion in income tax cuts, social security tax cuts, and unemployment insurance - working out to $5200 for each average bottom 98% household.


In December 2010 42 Republicans in the Senate, "representing" only about 38% of the nation's population protected their ultrarich benefactors (2% of the nation's population) against the will of 73% of US citizens. That's right, 73% of citizens wanted to continue the Bush tax cuts ONLY for those making under $250,000. That plan passed by the House of Representatives and was endorsed by the President. It would cut the deficit as much as all the cuts to services recommended by the Deficit Commission put together. The truth is we needed this tax plan and some of the cuts to get ourselves out of this mess.


As the nonpartisan CBO has pointed out, extending unemployment would be six times more effective for economic growth than cutting income taxes and cutting taxes for the top 2% would have miniscule if any positive effect on the economy. http://www.cbo.gov/ftpdocs/119xx/doc11971/11-15-CBOPresentation-SGE.pdf


Perhaps the President and other Democrats had to swallow this compromise for the overall good of the nation. However, they should have better set the stage to show that Republicans really only represent ultrarich people and corporations and care little about the overall good of the country. For the past two years the President and Congressional Democrats should have called for sacrifice from those able to make it and gotten things going by making a symbolic show of returning their salaries to the Treasury. This December the Democrats should have run post-election televison ads pointing out just what the Republicans were doing.


It's not too late for the the Democrats to go populist and fight for the bottom 90%. They should be running ads from now until November 2012 showing what they are trying to do for common man and lengths the Republicans went over the past two years to thwart them in order to heap more money on the ultrawealthy. Many actions and statements made by Republicans over the last two years should be enough to convince the vast majority of Americans that it's in their own self-interest to reject the Republicans and embrace the Democrats.


See a related discussion after the 2010 Election


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The 2011 Debt-Ceiling Deal


Some additional facts showing the House GOP & Mr. Boehner are the villains here:

  1. 1.Over a year ago, the President asked Congress to set up a  commission to deal with the debt. They refused, so he set up his own commission

  2. 2.Six months ago the President's Bipartisan Commission agreed to spending cuts and tax increases at about a 3:1 ratio

  3. 3.70% of Americans favor spending cuts and tax increases at an approximately 3:1 ratio

  4. 4.About a week ago, bipartisan Gang of Six in the Senate agreed to spending cuts and tax increases at about a 3:1 ratio

  5. 5.At about the same time, the President was negotiating with Boehner on essentially the same plan to reduce the the debt by about 5 billion using spending cuts and tax increases at a 3:1 ratio.

  6. 6.Now 3 days before default, the House leader, in order to save his wealthy masters any tax increase, passed a bill that reduces the debt by less that .01%, sets up the commission the President wanted over a year ago, and puts us in the same position of potential default in 6 months

...so while the US was less than one week from default Mr.Boehner spent  half that time to ram through a bill that he knew the Senate would reject in few hours. All political theatre so he could have a meaningless victory at the expense of the good of the country. Because a corrupt, inept, & radical House GOP wants to save its millionaire masters from paying their fair share of taxes, the financial status of the US is irreparably damaged.


And all this is to support a tax system in which billionaire Warren Buffett paid 11% total (federal, state, local, corporate) taxes on $8billion annual investment gain while typical single minimum-wage workers pay 37% total taxes on a $14,500 annual salary (1yr aftertax salary:$9600).


The tax cuts for the wealthy the GOP is defending, started under Reagan:

  1. 1.Have increased the share of wealth owned by the top 1% from 22% to 40%

  2. 2.Have dropped GDP 25%, comparing 30 yrs before and after

  3. 3.Have dropped the return on the S&P 500 from 8% to 1%

  4. 4.Are changing our democracy into a plutocracy

  5. 5.Slashes infrastructure needed for future prosperity


KHM's BRILLIANT COMMENT IN A NY TIMES BLOG:

"I don't work in the financial sector, but anyone who has had Psych 101 in college would be able to tell you that Obama and the Democrats went about this in the wrong way. Had they taken a tone of 'we are asking for the benefit of the country that you share in the sacrifice for the greater good' instead of the usual 'you're a greedy rich person' schtick, they may have been able to pass keep the tax cut repeal. It would have been great for Obama to only ask to be paid $1 as a sign of sacrifice, and ask Wall Street hotshots to be match him in deed and donate their bonuses to charity. Sometimes honey catches more flies than vinegar?"

 


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