Congress and the White House to the Middle Class, “It’s for your own good”

In Current Events, Economics, Election Politics on December 28, 2010 at 01:14

The Democratic and Republican plutocrats have once again called on the spirit of the middle class in order to grant largess on the richest Americans while further abandoning the lower classes.

To “defend the middle class tax cuts”, Obama and Congress have increased the deficit by about $900 billion dollars.  Only $53 billion goes to extending unemployment (less than 6%), $75 billion goes to upper bracket tax cuts.

The estate tax will be capped at 35% with a $5 million dollar exemption, meaning only families with estates larger than $5 million will pay anything. http://abovethelaw.com/2010/12/estate-tax-compromise-could-save-thousands-of-lives-of-millionaires/ The exemption was $1 million and would have returned in January if not for the compromise. Remember, these benefits for the wealthy were to protect the middle class and their tax cuts.

Republicans demanded “liberalization” of the estate tax on inherited wealth as the second part of the payback to the rich in exchange for letting workers and the unemployed keep their benefits and income for the coming year. Why not? After all, corporations and the rich lavished hundreds of millions on their Republican rubber-stamps through anonymous campaign contributions  in the November midterm elections.  Now they want theirs!! Along with extension of the billions in Bush era tax cuts on income, the rich certainly got a huge return on their investment: $139 Billion for just the top 2% of the population, according to the Center on Budget and Policy Priorities! The campaign contributions were enabled by the outrageous Supreme Court decision which permits “corporate fronts” to contribute unlimited funds to candidates without ever revealing the names of the  real donors.

In order to defend the middle class, the social security tax will be reduced from 6.20% to 4.20% in 2011 (Ibid). That extra $20 dollars for every thousand you earn will boost the economy, I’m sure. These cuts could lead to further reductions in the Social Security payments, in defense of the middle class, in the future and be used as a reason to privatize the program.

The middle class protection act also allows U.S. citizens to assist large businesses as they make products to sell to you. The R&D tax credits will be continued, so the middle classes and others that pay taxes can pay for companies to do research and make a profit. Hey, it’s not socialism if it’s government money for corporations. As long as government money doesn’t go to people to get jobs or unemployment insurance or health care, it’s well spent. Now that would be socialism. And besides, paying for the R&D of companies helps the middle classes by ensuring the development of new products to buy. Who doesn’t like new consumer products? Only commies!

In addition, the middles classes will help businesses with that 100% write off of their purchases in equipment in 2011 and 50% in 2012. Well, it’s not like we haven’t giving deductions for capital purchases already. What I like about this deduction is that is screwed toward larger and more well financed companies, for they will be able to buy more equipment and get larger deductions.

Sure, unemployment payments were extended 13 months and the middle classes had their tax cuts continued. But that wouldn’t matter if this didn’t help the business and upper classes, right?

Perhaps our Congress should work like tradition Chinese medical practitioners who didn’t get paid by a patient if they were sick. They would only be paid by healthy patients. Perhaps Congress could forgo their pay as long as unemployment was over 5%.

The super rich wins!


Tax cut compromise misdirection

Joe Biden, from the LA Times:

This bipartisan effort was prompted by the fact that tax rates for every American were poised to automatically increase on January 1st. If that had come to pass, the average middle-class family would have had to pay an extra $3,000 in taxes next year. That wouldn’t have just been a blow to them — it would have been a blow to our economy just as we’re climbing out of a devastating recession.

That would amount to $250 a month, which can be a lot for many people. But what is the average middle class family? How much do you earn to receive this discount? According to the conservative Tax Foundation website, the middle-income bracket was 37,000-60,000 in 2007. http://www.taxfoundation.org/research/show/22600.html And their tables show the various brackets various rates going up if the tax rates expires. http://www.taxfoundation.org/publications/show/151.html

The President, wholeheartedly — wholeheartedly committed to serving the middle class. And that’s what happens when you have a President who knows in his gut that the middle class is the backbone of the American people, and that a full economic recovery will only happen if we have — if they, the middle class, have the support they need in order to succeed. Ladies and gentlemen, the President of the United States, Barack Obama.  (Applause.)

Applause indeed. And to help the middle class slop their kidney pie, the wealthy had to be served their Beef Wellington first.

What about the swelling poor, hungry, homeless and unemployed in America? The tax cuts don’t create jobs in the amount we need. In fact, the job growth from tax cuts is near zero. The wealthy don’t spend it. At best, the tax cuts were a give away so the President could get a few scraps. Unemployment was extended, and that is a kind of stimulus that does create jobs and spending.

The President says, “Middle class tax cuts not a game” (link). In his speech, he said “middle class” eleven times in his call to vote for the middle class tax cuts.

The Democrats didn’t even force a vote against middle class tax cuts by the Democrats before caving. It’s another indications of poor leadership and a loss of the political message, what sociologists call framing.

Even if a plurality of the American public favored reinstating tax rates for those families making over $250,000 dollars a year as well as being in favor of a middle class tax cut, Obama and the Democrats didn’t fight for that position. They didn’t want to make the Republicans face the consequences of one vote against middle class tax cuts. Do you really think the Republicans wouldn’t have taken the current deal after having block a return to the Clinton area rates for their wealthy patrons? Here’s how it works Mr. President and Congressional Democrats:


1. Pass a middle class tax cut and bring it to the Senate.

2. Use reconciliation to avoid the Republican filibuster and get a debate on it. Get the Republicans on record lying about how the tax cuts for the top brackets create jobs. Get your VP or other mouthpiece to point out the lies on the nightly news. By the way, the reconciliation process was used to get the tax cuts passed in the first place, so that justifies it’s use to get rid of the cuts.

3. If the Republicans succeed, The President can go to them and act contrite. He could say, “You got me, now here’s the deal”.

4. Then you offer the deal you ended up with. You don’t give up on the deal before even putting up a fight. And if you are going to “compromise” you make the Republicans look as much like the plutocrats they are.

If the White House and Democrats tried this, it didn’t get a lot of press. Why all the behind the scenes negotiating? Why not make the votes embarrassing for the Republicans? Is it that Democrats and Republicans are feeding from the same trough and in the end, they are on the same team?

I don’t see much effort to get a better deal for the lower classes and be more fiscally sound. In the meantime, the gap between rich and poor is wider than ever. The appearance that Obama didn’t really try is clouding his image. The same is true for Democratic Senators. They could have pushed the issue with the Republicans, but they didn’t.

The question remains as to why the Democrats didn’t address the issue of taxes the last two years. Part of the problem was the time spent on the health care bill. More and more, I see that bill as a waste of time and political capital even if there are some positive changes in the bill regarding pre-existing conditions.

This compromise appears to be the best Congress and the White House can do because they can’t upset their benefactors, the wealthy classes. That shows just how far out of touch with reality politics has become. And when the budget comes up for cuts, you can bet that Republicans and what’s left of the decimated Blue Dog Democrats will got after Social Security, Medicaid, Medicare, and the new health care bill, few of the only laws in the U.S. that help make our society more equitable.

While the middle class get their tax cuts, who is going to employ all the teachers, nurses, police officers, and others that have been laid off due to tightening state budgets? Is this “stimulus” as pundits have called this tax bill going to bring back their jobs? And what of the rising credit costs, the rising tuition in universities, the weakened infrastructure, the lack of health inspectors? Is the middle class prepared to pay more so the wealthy can get their tax cut?

Who’s going defend the public when more police are laid off because no one is working? Who is going to pay for the road maintenance? Who is going to pay your increased property taxes, the increased sales taxes, the increased car registration fees that will ensue because the billionaires got a tax cuts and states can no longer afford to pay for services? The middle class, the lower classes, everyone. But the billionaires will have enough to pay them. Be careful of Trojan Horses.

Do we really want to borrow billions from China to give the wealthiest 6,600 estates a tax break averaging more than $1.5 million?

The fact is, that when you give the wealthiest Americans a tax cut history shows that they will save the money rather than spend it. (link)

And yet the Bush tax cuts of 2001 and 2003, which conferred almost all their benefits on the rich, continue.

Democrats have decided to delay voting on whether to extend them for the top 2 percent of Americans or for the bottom 98 percent until after the mid-term elections.

Democrats have thereby given up a defining issue that could have enabled them to show the big story of the last three decades — the accumulation of almost all the gain from economic growth at the top — and to make a start at reversing it. When will they ever learn?

From: http://sensen-no-sen.blogspot.com/2010/07/land-of-greatly-diminished-opportunity.html

In “Introducing the Great Divergence”, Timothy Noah writes,
“That was when (1920s) the richest 1 percent accounted for 18 percent of the nation’s income. Today, the richest 1 percent account for 24 percent of the nation’s income.”

Let’s look at it this way:

1% of the population

Controls about this much of the national income.

In what types of government is this gap considered righteous? I guess if you were a monarchy, this makes sense. And in a dictatorship where the top 1% would be the leader and his family this would be normal. Czarist Russia was much like this. And the plutocratic United States has this distribution. I am so glad our national government has passed another bill to increase this discrepancy.

The Income Gap

Happy New Year Everyone!

Tex Shelters

  1. Phenomenal work, Tex. An American hero, you.

  2. Leeza,

    Ha ha and thanks!

    Tex Shelters

  3. You’ve said everything I wanted to say on the subject and then some. If the Bush tax cuts were so great, then why did the economy tank? If the Bush tax cuts created jobs, those saying that need to complete the sentence accurately, the Bush tax cuts created jobs in Asia, Latin America, other places other thant he good ole USA.

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