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GOP Plans To Raise Middle Class Taxes By Eliminating Itemized Deductions

GOP Plans To Raise Middle Class Taxes By Eliminating Itemized Deductions > Personal Opinion > DLU Articles > Democratic Liberal Umbrella

GOP Plans To Raise Middle Class Taxes By Eliminating Itemized Deductions

Thursday, November 17, 2011 |Democratic Blog News | IF YOU LIKE THIS ARTICLE, PRESS LIKE, COMMENT AND SHARE!

Pat Toomey, R-Pa., who serves on the 12-member debt super congress committee described a $290 billion Republican super congress committee debt reduction plan that limit deductions for mortgage interest, charitable donations and state and local taxes while taxing for the first employer-provided health benefits. The Republican plan would also cut the top income tax rate for the wealthiest people from 35 percent to 28 percent, and drop the bottom tax rate from 10 percent to 8 percent. Progressive Democrats point out that such big reductions in top tax rates would result in large tax cuts for the rich, which would be paid for by eliminating tax breaks that primarily benefit the middle class.

The Occupy movement is a protest of policies that have given the wealthiest 1 percent of Americans 42 percent of the nation’s wealth and tremendous political power over the last three decades, while the remaining 99 percent of American workers have seen their incomes decline and political power wane.

When the Supreme Court ruled in its “Citizens United v. Federal Election Commission” decision that the government may not ban political spending by corporations, it equated corporate money to personal free speech. The 1% who control corporations are now combining the “free speech” power of their corporation’s treasuries with their personal wealth to buy media Ads, hire lobbyists and fund their choice of political candidates.

The only free speech option left to the other 99% of American citizens is to exercise their first amendment right to petition government by coming together in such places in such numbers that they demand the political voice the other 1% can simply buy with a stroke of a pen in their checkbook.

Meanwhile, the Congressional super congress committee only has one week left to come up with a plan that will cut more than $1 trillion from the federal deficit. A deficit created largely by massive millionaire tax cuts President Bush pushed through congress during the eight years he held the White House.

Republicans are opposed to raising revenues by raising taxes, even on the wealthiest Americans, who have seen their taxes dramatically cut over the past 14 years.

“Almost without exception, every proposal put forth by GOP lawmakers and presidential candidates is intended to preserve or expand tax privileges for the wealthiest Americans,” writes Rolling Stone political correspondent Tim Dickinson. “Most of their plans, which are presented as commonsense measures that will aid all Americans, would actually result in higher taxes for middle-class taxpayers and the poor.”

Listen to Wednesday’s edition of NPR’s Fresh Air where Dickinson explains how the tax policies pursued by the Republican Party have changed in the past 14 years — and says those changes have led to greater economic inequality in our country.

On Wednesday’s edition of Fresh Air, Dickinson explains how the tax policies pursued by the Republican Party have changed in the past 14 years — and says those changes have led to greater economic inequality in our country.

Dickinson explains that the top 400 taxpayers in the United States have seen their incomes increase threefold since 1997. In that same period, their tax rate has fallen by 40 percent. “Today, a billionaire in the top 400 pays an effective tax rate of about 17 percent,” he says. “That’s about 5 percentage points less than your average worker.”

The income of the wealthiest Americans has also increased. Dickinson writes that “since Republicans began their tax-cut binge in 1997, they have succeeded in making the rich much richer. While the average income for the bottom 90 percent of taxpayers has remained basically flat over the past 15 years, those in the top 0.01 percent have seen their incomes more than double, to $36 million a year.”

Dickinson tells Terry Gross that the revenue going to the wealthiest Americans is increasing.

“This isn’t just about the broadest sweep of American society — this 90 percent — if it’s getting ahead, it’s getting ahead just at the margins,” he says. “The people at the very top of the income period are taking off like a rocket — $10,000 an hour raise for the people in the top .01 percent.”

NPR Interview Highlights

On the neoconservative “starve the beast” strategy that was designed to create a fiscal problem by cutting taxes

 

“[They thought] if it bankrupts the country, that’s OK because it’s going to lead to greater spending cuts later on. So if you don’t like the nature of what government does — you don’t like that it funds a social safety net, you don’t like Medicare, you don’t like Social Security — it’s actually a good strategy to leave the government in a perilous fiscal situation, because energies will be directed into cutting spending and paring back these programs.”

[Rendering the federal government insolvent is, in fact, the stated goal of hardline conservatives who want to eliminate elected government and turn society over to private corporate control. "Starving the beast" is a fiscal-political strategy adopted by American conservatives in the 1970's to create or increase existing budget deficits via tax cuts to force future cuts and eventual privatization of Medicare, Social Security, Public Education and every other public service.

In the famous words of the activist Grover Norquist, conservatives want to get the government "down to the size where we can drown it in the bathtub." But there has always been a political problem with this agenda. Voters may say that they oppose big government, but the programs that actually dominate federal spending -- Medicare, Medicaid and Social Security -- are very popular. So how can the public be persuaded to accept large spending cuts?

The conservative answer, which evolved in the late 1970s, would be dubbed "starving the beast" during the Reagan years. The idea -- propounded by many members of the conservative intelligentsia, from Alan Greenspan to Irving Kristol -- was basically that sympathetic politicians should engage in a game of bait-and-switch. Rather than proposing unpopular spending cuts, Republicans would push through popular tax cuts, with the deliberate intention of worsening the government's fiscal position. Spending cuts could then be sold as a necessity rather than a choice, the only way to eliminate an unsustainable budget deficit. (see Forbes) ]

On Grover Norquist’s Americans for Tax Reform“In Grover’s hand’s, the anti-tax pledge has taken on a life of its own. He has taken this pledge — I believe it’s now been signed by 98 percent of Republicans in the House — to the state Legislatures. I think there’s something like 1,300 Republican state legislators who have signed the pledge. And you have politicians who are coming up through the farm systems in the states before they reach Washington — a very good example of that is Eric Cantor, who’s, as a member of the Virginia House of Delegates, signed this pledge. He, of course, today is the House Majority Leader.”

On the emphasis on tax cuts during the Bush administration vs. the Obama administration

 

“During the Bush administration, there was an argument …[from] Dick Cheney that ‘deficits don’t matter,’ that you can run up these tax cuts on essentially the national credit card, that you can pay for these tax cuts to the wealthiest by borrowing money from China if you need to. But today there’s this argument with Obama as president that deficits do matter — in fact, they’re the most important thing of all. But there’s this strange caveat to this. You can still push through new tax cuts for the wealthy even if those are paid for with deficit spending. It’s a very puzzling line of argument that doesn’t get challenged very often. But you look at the lame duck deal in December of last year that extended the Bush tax cuts for the wealthiest — and this was a deficit finance package that had other components to it — but the net effect was to raise the national debt by a greater amount than the stimulus package that the Republicans fought so bitterly against as wasteful deficit spending.”

Posted by DemBlogNews at 9:07 AM

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