The Democratic caucus just voted to oppose the President’s deal with Republicans. According to Politico, they are upset over the tax rates for the wealthy and the estate tax deal. Are they nuts?
Earlier in a letter to Speaker Pelosi, a group of House members said in part:
“This proposal will hurt, not help, the majority of Americans in the middle class and those working hard to get there,” the letter states. “Even as Republicans seek to add billions more to our national debt in tax cuts to the wealthy, they oppose extending unemployment benefits to workers and resist COLA increases to seniors.”
Suddenly these spenders got religion. Even as they debate this deal, more spending is being added to make it more attractive to those on the left. More attractive mind you and how about this “resist COLA increases to seniors” nonsense. The law is the law and the law does not call for an increase in Social Security benefits (or the Medicare Part B premium for most). Apparently, even in light of the state of Social Security, Medicare and the deficit it is ok to ignore the law and spend more on seniors, the one group of Americans already consuming a disproportionate amount of the federal budget.
However, this attitude is not confined to politicians. Consider this comment appearing on Paul Krugman’s NYT blog:
“What Obama should be doing is raising taxes on the wealthy above what they were before the Bush taxes and using it to fund some significant stimulus in the form of infrastructure building. Building up our electricity grid and our broadband. Replacing and renovating schools, hospitals and other public institutions.
It would be nice if our kids were learning in buildings that were actually heated to 70 degrees, air-conditioned in the summer and didn’t have furniture falling apart into sharp pieces… and that’s in a good district.”
Scary stuff is it not? It would seem that some Americans would like to eliminate the “wealthy” altogether, but yikes who would pay for everyone else if they are successful. As Margaret Thatcher said, “The problem with Socialism is that sooner or later you run out of other people’s money.”
In addition to extending the current tax rates for the “wealthy” many Democrats are beside themselves over the two-year deal on the estate tax. Imagine, confiscating 35% of an estate over $5 million is insufficient. It would appear that the new goal of a fair society is to get you on the way up and on the way down. Interestingly I read in the paper today that fifteen more of the super wealthy have pledged to give away most of their wealth through philanthropy. This effort is led by Bill Gate and Warren Buffet and rather than give their wealth to the government, these billionaires give it to worthy causes. That must jam up the shorts of the progressive left.
So, are you one of the wealthy, let us see.
Assume you make $125,000 a year, an amount by the way earned by many NYC police officers and union workers when including their overtime (what, you think a millionaire works only 40 hours a week?) . If you want to stretch it a bit, $125,000 is also an amount earned by many government workers when you include pensions and other benefits not available to the average American. However, no, $125,000 a year is not rich or wealthy. Nevertheless, what happens if a person making $125,000 a year marries a person making $125,000; voila, they are a wealthy American family, at least according to most Democrats in Congress and the President. Ok, I know, I know, both $125,000 and $250,000 are considerably higher than the average family income in the US, but high income alone does not mean wealthy, many of these “wealthy” Americans are the ones losing their homes after all. More important, Americans in this category are not going to fund the deficit created in the last several years. Hey, I don’t want you to feel sorry for these folks, but neither do I want you to demonize them. They have not taken anything from you and maybe, just maybe they have worked harder, obtained a better education, took chances, started a business or managed their careers.
Nevertheless, progressives seem only to focus on this group of Americans as somehow not paying their fair share, and at the same time feel the rest of America deserves more, more of everything. Affordability never seems to get in the way of more programs and more spending while fairness is defined as giving the government 50% or more of your income and 55% of your estate. The rich may have gotten richer and the middle class stayed in the middle or even lost ground, but is that because the government spent too little or the rich were not taxed enough?
The answer is no. There are many factors in all this but two are the policies set by past Congresses and the life choices made by millions of Americans. The high school graduation rate in the US is just over 70% with some states as low as 50%. Minorities have graduations rates near 60%. In the United States, out-of-wedlock births increased by 26 percent between 2002 and 2007, according to the report. In 1980, the rate of out-of-wedlock births was 18 percent. Though the reasons for the increase are not clear, one factor might be that having a child when you are not married is no longer stigmatized. Forget the moral issues, what about the economic consequences of this for many children and many of these families?
One final overriding point, the idea that a higher tax on anyone is somehow connected to dealing with the deficit is bogus. As we are already seeing in this deal, the additional revenue is spent before it is even in the door. Congress always spends more than any tax increase generates. So if you want to blame someone for the state of the economy or the state of working families (sorry, middle class families), look to Capitol Hill.
Related Articles
- Dem letter: Tax deal ‘grossly unfair’ (politico.com)
- Robert Reich: Why the Obama Tax Deal Confirms the Republican Worldview (huffingtonpost.com)
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