November 19, 2010
How did we get here?
When the Congress passed the Bush tax cuts in 2001 and 2003, they decided to include a sunset provision. Unless a future Congress renewed them, a Republican Congress and Republican President decided their tax cuts would expire December 31, 2010.
Now that time has come, and one of the more important action items on the agenda of the lame-duck 111th Congress is to decide which tax cuts should be extended and which should be allowed to expire.
Democrats, who, for now, still control both sides of Congress, and President Obama want to extend the tax cuts for everyone except those making more than $250,000 / year. People making more than that amount would still pay reduced taxes up to that amount, but on income above and beyond that amount, they would pay more.
Sounds reasonable, right? The vast majority (98%) of American tax payers get to keep their tax cut, and the millionaires and billionaires among us would pay what they were always going to pay since the Republicans, years ago, had decided the cuts wouldn’t last forever.
Republicans: Give us our millionaire cuts or nobody gets any!
When word of a compromise that would split the vote on extension into two votes – one on middle-class tax cuts and another on the millionaire tax cuts – the ranking Republican on the House Ways and Means Committee, which handles taxes, Rep. Dave Camp (R-MI), responded that “the GOP will block any proposal that extends tax cuts for the middle class for a longer period than those for the wealthy.”
The Republican plan to include an extension for the very wealthiest tax payers alone – the top two percent of earners – would cost $690 billion over ten years to borrow the money plus $140 in interest on the debt. That’s $830 billion for tax cuts that only benefit 2% of tax payers.
“Let millionaires fend for themselves for a change”
“The election is over and now it’s time for politicians to show courage and stand and fight on these issues for working families. Let millionaires fend for themselves for a change,” said Rich Trumka, AFL-CIO President in a statement on the AFL-CIO Blog:
AFL-CIO President Richard Trumka said it is “absolutely insane” that in these tough economic times some people want to continue the “tax give-aways to millionaires while working families are losing their jobs, their benefits and their homes.”
“We need to focus on creating jobs by giving tax breaks only to middle-class families and investing in rebuilding our crumbling infrastructure and green technologies. Millionaires and Wall Street already had their party, which tanked our economy and left Main Street stuck paying the bill.”
Even some millionaires are starting to speak out against Republican efforts to make their temporary tax cuts permanent. A group which describes itself as Patriotic Millionaires for Fiscal Strength has launched a website where millionaire tax payers can sign a petition urging President Obama to fight to let the Bush-era tax cuts for the rich enter the dust bin of history:
Dear Mr. President,
We are writing to urge you to stand firm against those who would put politics ahead of their country.
For the fiscal health of our nation and the well-being of our fellow citizens, we ask that you allow tax cuts on incomes over $1,000,000 to expire at the end of this year as scheduled.
We make this request as loyal citizens who now or in the past earned an income of $1,000,000 per year or more.
We have done very well over the last several years. Now, during our nation’s moment of need, we are eager to do our fair share. We don’t need more tax cuts, and we understand that cutting our taxes will increase the deficit and the debt burden carried by other taxpayers. The country needs to meet its financial obligations in a just and responsible way.
Letting tax cuts for incomes over $1,000,000 expire, is an important step in that direction.
Would that we had more economic patriots in the Congress, of which 44% of members are themselves millionaires, we could afford to make the investments we need in job creation and rebuilding our infrastructure that would ensure the strength of our nation for years to come.