Friday, December 10, 2010

The Tax Cuts

I know it’s sloppy journalism, but as I’m still coming out of my post-surgical funk, I thought I’d point people in the direction of Christopher Hayes’s article in the December 27 issue of The Nation, in his “Capitolism” column, entitled “The Bribery Model” (in print – online, the article is “Tax Cuts Forever”, and a little different). Hayes articulates perfectly many of my own concerns and frustrations with the extension of the Bush Tax Cuts. Below are some choice comments, with a small amount of my own input.

Firstly, on the subject of Republican anti-deficit activism/obsession:

“Republicans have spent two years — an entire election cycle and postelection victory lap — repeating with tourettic persistence dire warnings about the existential threat posed by large deficits and mounting government debt.”

So what? I hear you ask. Well…

“these same Republicans (and a few conservative Democrats), who love to offer lectures about the necessity of shared sacrifice, also spent the week demanding that all the Bush tax cuts be made permanent, a policy that would increase the debt over the next ten years by an astounding $3.3 trillion.”

And here is where it gets really reprehensible:

“the official Republican position, expressed in a letter signed by all forty-two GOP senators, was that they would not allow the Senate to vote on anything until the tax cuts were extended. With 2 million people set to lose their unemployment benefits in December, this meant that the GOP was ready to put 2 million Americans out on the streets the week before Christmas, unless millionaires got tax cuts!” (emphasis mine)

When you consider that many of these millionaires and billionaires are the Wall Street and Hedge Fund managers that had a considerable role in the collapse of 2008 and everything disastrous and ruinous that has come after it, this is doubly insulting. Why are they being rewarded? Just as calls for wage and bonus caps on bailed out firms was 100% logical and sensible (name one other instant when screwing up on this scale is allowed to go unpunished?), not extending the tax cuts to help out those who were screwed over by the rampant and flagrant gambling that took place on Wall Street would have been the right thing to do. Every time tax cuts have been given to ‘stimulate the economy’, the tax saving have never gone into stimulus spending. A billionaire saving a couple of million dollars in taxes is not about to spend a couple million dollars on American-made products, or invest more (if anything) in job growth. They are more likely to buy fancy, foreign-brand cars. And even then, probably not a couple millions dollars worth. On the other hand, give tax relief to the poor, and help the unemployed, and maybe some parents won’t have to be afraid of being unable to feed their families.

In this day, with the American and global economies in the state they are in, to favour the richest people in any society over those who desperately need help, who feel every drop in the economy, weather every bump in the road… that is cruel and unusual.

But, instead, President Obama rolled over.

Hayes writes about the stubbornness of the unemployment levels in the United States, and that any money back into the system was a good thing. Hm. Perhaps, but why not make the unemployment benefits contingent on public works? McCain wanted to expand civil service projects, so why doesn’t Obama suggest something like that? Republicans can’t complain about it being a ‘hand-out’ if they are in some way working for the money? Infrastructure in the US is slowly corroding due to lack of funds (if you don’t want to pay every time you use a road, taxes will be needed to keep the bridges from falling down…!), so why not get all the unemployed builders and labourers to help out with reconstruction and maintenance projects? Republicans are always saying how the average American would rather work to earn money than receive a hand-out (although, still no one ever seems to opt out of any form of ‘free’ money), so why not make unemployment benefits contingent on some form of community service?

Hayes finishes, describing the tax cut deal as

“the standard bribery model of legislating that has come to characterize Washington in the era of oligarchy: if you want to put food on the table of the unemployed, you must lavishly wine and dine the CEOs and bankers who laid them off. Obama didn’t create this system, but he is making it stronger before our very eyes.”