Robert Reich begins: "The deal the President struck with Republican leaders is an abomination. It will cost $900 billion over the next two years - larger than the bailout of Wall Street, GM and Chrysler put together, larger than the stimulus package, larger than anything that's come out of Washington in years."
Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)
Why the Tax Deal Is an Abomination
08 December 10
The President's Last Stand Is No Stand at All: Why the Tax Deal Is an Abomination
he deal the President struck with Republican leaders is an abomination.
It will cost $900 billion over the next two years - larger than the bailout of Wall Street, GM and Chrysler put together, larger than the stimulus package, larger than anything that's come out of Washington in years.
It makes a mockery of deficit reduction. Worse, the lion's share of that $900 billion will go to the very rich. Families with incomes of over $1 million will reap an average of about $70,000, while middle-class families earning $50,000 a year will get an average of around $1,500. In addition, the deal just about eviscerates the estate tax - yanking the exemption up to $5 million per person and a maximum rate of 35 percent.
And for what?
Wealthy families won't spend nearly as large a share of what they get out of this deal as will middle-class and working-class families, so it doesn't do much to stimulate the economy.
The deal further concentrates income and wealth in America - when it's already more concentrated than at any time in the last 80 years.
The bits and pieces the President got in return - extended unemployment benefits, a continuation of certain small tax benefits for the middle class - are peanuts. After last week's awful jobs report, Senate Republicans would have been forced to extend unemployment insurance anyway.
It's politically nuts. Polls showed most Americans are against extending the Bush tax cuts for the wealthy.
It would have been a defining issue for the President to use to show whose side he's on (the middle and working class) and whose side the Republicans are on (not the middle and working class). And given that the House turns over to Republicans in January, the President probably won't have another chance like this one.
It loses him even more of his "base" - by which I mean people who think of themselves as Democrats and are committed to the ideal of equal opportunity and don't want the nation to become even more of a plutocracy.
It makes him look weak - Republicans got everything they wanted. And when a President looks weak, he is weak.
House and Senate Democrats should reject this abomination.
The President should get himself new advisers.
Robert Reich is Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written twelve books, including "The Work of Nations," "Locked in the Cabinet," "Supercapitalism" and his latest book, "AFTERSHOCK: The Next Economy and America's Future." His 'Marketplace' commentaries can be found on publicradio.com and iTunes.
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Comments
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I thought the same. They are out to get him and will insist on a permanent extension for the rich.
They play hardball and are out to win. Compromise is not a part of their vocabulary and Obama needs to draw a line in the sand..NOW!
They will attempt to make the Bush tax cuts permanent in either January or February. Then, they will try to make the SS reduction permanent as well.
Finally they will pass Omore tax benefits to Corporations that "help" other countries by sending our jobs there, and lastly phase out unemployment benefits permanently.
I hope Obama and the Dems have the stomach to fight back hard, and will scream from the rooftops that the GOP are destroying America.
You can run and hide, but you will be found. Revenge will find you. It is called Karma. What goes around comes around. And compared to what you will be forced to eat, rice and beans will be a delicacy that you will wish you had. Your own contemptable words have condemned you.
Anything else is just redistribution!
So you don't believe we should try to improve the life of everyone in the country but instead let the rich grab more and more of the assets of this country? Back to Rome.
After all, the Republicans have spent the past thirty years pushing (and actually implementing, whenever possible) redistribution in the opposite direction, so it's long since time that the trend was reversed.
The status quo ante 1981, baby!
Meaningless drivel...your "account" ignores the moral dimension of Reich's argument. It furthermore merely and reflexively just asserts unconsciously "derived" narratives that are asserteded as self-evident and inelluctable truths. In other words the repubicans are blind to social morality...this includes such notions as justice.
Where is the standard, flat, deduction? And, since we are taxed an average of 28.2% of our GDP shouldn't that be the starting point for a flat tax? (It is the 35th lowest average in the 40 countries associated with the OECD, no matter what the rates are, after some tricky loop-holes and dumb tax incentives.)
You have a typo: @10% tax rate you keep 900.000 of 1:000.000 . But like cnar, I am for flat tax. This is my proposal: Flat tax rate: 35% (Bush's top bracket, impose on every income type) Standard deduction: $50,000 (median salary). Can republicans find anything simpler? You can dream for free.
Check with the IRS !!!
What edge and his ilk fail to understand--or do understand but conspire with his own unconsciousness like an addict to avoid the demand of social responsibility at all cost--is that all of the vaunted dimensions of the cultured human are social dimension--and they would not exist without social entanglement. This is the key insight many on the conservative bent fail to see...that those who are successful, at the top of the social structure have benefited from social structures that have nothing to do with their own creation or effort. In moral political theory it is called 'morally irrelevant criteria"--that is, those who are on the bottom of social economic ladder and those who are at the top--find themselves there through dimensions that are morally irrelevant to whatever particular moral character (hard work, laziness etc--both conservative myths really for explaining social hierarchy) they bring to the scene.
And now so many Dems are complaining: But Obama compromised.
I guess if you've got a job and don't have to count on unemployment for the rent, food, and other luxuries, it's a lot easier to "hang tough." I'm pretty sure Mr. Reich isn't on unemployment. It may seem like "peanuts" to him, but I'll bet all those whose benefits were set to get get off just before Christmas would disagree.
By the way, I have a job. and I'm not collecting unemployment, but at least I can summom up a little friggin' empathy.
I see passion, but almost no compassion. These whiners really disgust me.
Be mad at the right people, you cloud-cuckoo idealists. And yes, that includes YOU, Mr. Reich.
But you start with tough positions, and pull hard to keep the end result as close as possible to your positions. Signaling early on that you really don't intend to stand tough on your position, whether tax cuts for the very wealthy or a weak public option for health care just tells the other side they don't need to compromise much, they can roll you. Obama is getting rolled.
I do believe that's their point. They're not going to pay for that crap, as they see it. We will just have to lose it.
But this President, nor Harry Reid never appear to fight much for anything. Perhaps they are doing great things in the background, but politics is part theater. These buys don't know theater. It is costing them dearly in support.
If only the Dems would ignore Obama on this, there would be the showdown at the I'm ok You're ok corral.
And, if I might add, it certainly isn't the 'change we can believe in'.
The study was named "Glenn Beck's Favorite Facts". Some are even true!
Guaranteed to make you look smart, and sure to impress blondes that make a living from being dumb. (Victoria Jackson, for example)
Please just do the math.
1. Look up the rich men in Forbes. See how much they are worth.
2. Look at the debt calendar on the web... google, bing or yahoo it.
then the rest is simple algebra.
That would be nice if you did and report back.
Regards,
A 1776 American
p.s. Thanks again, David A. Miller
I like you're idea Mr Miller, if we cut the military and our two wars by 25% we would be in good economic shape. Bravo, now pass you're idea on to you're GOP friends.
A 1776 American
(Thank you, David McCullough, another great American hero)
I can think of none better than Robert Reich. He has the political and economic experience we need to right this listing ship.
He must have been given mind-altering drugs in his Gatorade or whatever he drinks. Just as in a Mission Impossible plot.
It's easy to forget that the phrase, 'Promote the general Welfare' is in the Preamble to the Constitution. I don't think that was just a flourish of some sort.
The GOP, and apparently the President, have forgotten the basic tenets that our founding fathers risked their lives for.
Julien, I may have misspoke. You have a point. But here's where I'm most unhappy. While Bush was in office he behaved precisely like the thug I thought he was. I came to expect his evil stupidity. But Obama? It seems some how worse to be duped into believing in his greatness, buying into the audicity of hope only to have that good will thrown to the rocks. And even worse, to say that it would have been worse under Bush, as I look at the outcome, I'm starting to wonder if it made any difference at all. To discover that Obama's misadministrati on may have actually lead to a return to Rethuglicon rule with a vengence may very well mean that Obama's failures were the worst. And I still hope that somehow Obama rises to the occasion and things get so much better that I am forced to admit I was foolishly pessimistic and unfair. I love to say in two years that I must have been full of s*** about now, but that won't happen. It will be even worse and the string of lost opportunities will damn Obama.
We think that with education and exposure to the world we live in that we become sophisticated and able to see a con man from a mile away, but remember that we were up to here with the silly oafish tactics of a president we considered to be beneath us. Our President is, in fact, smart. But intellect does not always presuppose conscience.
The stupid part is that he is capable of getting re-elected by standing firm. Tacking to the right is du-umb. But, as he earlier mentioned. he's a blue dog.
OK, so we were duped. For now we can only let our representatives in the Legislature know we have their backs, and meanwhile hunt for our replacement.
Manning up and letting all the cuts expire rather than cave to the greedy. Unless they too are the greedy then we are lost.
Ms President, You have to have balls to be called Mr. President, you just blrew any chance at a second term.
By the way is anyone watching Chris Christie? He is in the process of cutting back all senior citizen programs in New Jersey.
I can see our founding fathers rolling over in their graves.
It feels like a two story boulder has just cast its shadow on us.
Thanks for sticking with this Robert; they could use some real brains in the White House, but probably don't like what you have to say.
The fact is that over 99% of all employer firms are small businesses and that they employ half of all private sector employees (the other half being employed by large businesses and government, predominantly).
Letting the tax cuts lapse for very wealthy individuals does virtually nothing to improve employment as they do not directly employ workers to any significant degree.
I'll answer that question with a question Mr DeMartini - "Who makes the rich rich ?
Not everyone that runs a business is rich. Not everyone works for an "owner"; many of us work for corporations that are not real people.
Your question is a moot point.
An intended polarizing question. And not a very good one. Employment has many variables. Small business owners are, in many situations, not wealthy. They are just scraping by and barely claim a profit on their tax returns.
To the dismay of the right wing, a fair amount of us (me included) are employed by government-good old fashioned civil servants...prov iding services for everyone-even your beloved rich.
One question back at you, Frank. Who lays working people off from their jobs, the poor or the rich? Think about that.
The problem is, Frank, they are not employing people.
It is an ILLUSION to think or propound the theory that tax cuts for the rich = jobs for the peasants.
You obviously have never run a business.
The rich of course, and they will be employing more when they invest this windfall. In China, Thailand, and anywhere else where they can get cheap labor.
As far as "rich people hire", the only time a rich person wanted to hire me it was to provide personal services to them at about minimum wage with no benefits. I'd need at least 3 of those kinds of jobs to exist.
If tax cuts for the rich help unemployment so much, then why did the Bush administration have such a poor record of job creation?
That's easy...
Answer: The rich people do. But next Question: Where are the people they employ?
Answer: Not here in the USA. They're sending jobs overseas as fast as they can so they can make MORE MONEY.
Uh...who under pays people, sends jobs overseas, sells shoddy goods and swindles the consumer charging interest rates that the mafia used to?
Thank about that.
This is no "deal!"
The Republicans got EVERYTHING they could ever desire!
1) They scored BIG TIME with their wealthy patrons!
2) They scored points with the "little guy" because they can say "We saved YOUR tax "benefits!"
3) They scored points because they "bargained in good faith with the "tax & spend Democrats!"
4) They "set the table" for the next two years of THEIR legislative agenda, "dealing" [pun intended] with Obama.
5) They showed the American People that Obama is a "paper tiger" who cannot be trusted to stand up for the "little guy!"
6) Obama will NOT honor his promises! In fact, will not even acknowledge he ever made the promises in the first place!
Would that he would direct even half the "fight" and sarcasm at the greedy people who do not even have a majority in either chamber (at the moment) that he directs at those who honestly thought he would champion the 98% of us who bought what he was selling.
I wonder how quickly the President will cave when the Republicans begin proceedings to repeal his health care programs?
Both sides of the aisle should be ashamed...... and the President should be most ashamed.
"One way to look just at the numbers (politics aside), looks like a better deal for the Democrats than the Republicans. The GOP got about $95 billion in tax cuts for wealthy Americans and $30 billion in estate tax cuts. Democrats got $120 billion in payroll-tax cuts, $40 billion in refundable tax credits (Earned Income Tax Credit, Child Tax Credit and education tax credits), $56 billion in unemployment insurance, and about $180 billion (two-year cost) or $30 billion (10-year cost) in new tax incentives for businesses to invest. That's more stimulus than expected, and less GOP giveaways than expected."
Long term; we're f*$%ed.
Although a tad simplistic, he's going the right direction.
These people on the right do not believe in democracy, and when we get that through our thick sculls, we'll get somewhere!
I have no problem letting all of the tax cuts expire just to spite the upper class. As noted by Sen. Sanders in his mind-blowing article on the Fed (that's posted here in RSN, the largest corporations got loans and other benefits of around $3.3 Trillion since 2008. Now they get tax cuts, too?
The Bush Tax cuts represent the most irresponsible financial shift in our history, and absolutely must expire.
Face it, the rich only focus on conserving and increasing their existing wealth, though there are a few exceptions. The small business owner, who is focused on serving a population, also employs people from the local population. They know that if they don't do a good enough job, and give people what they want, they are history. The tax cuts don't help the ones who could create jobs anywhere near as much as it does those who don't.
He has left us no choice.
reasoning and be less judgmental. Many of the comments posted are exactly what the Republicans want to read!
We tolerated the compromises on health care; we tolerated the weakness of financial reform. But this is the straw that breaks our camel's back.
He has let the GOP corner him into bargaining for unemployment compensation, estate tax, etc. in trade for the essence of our financial stability: fair taxes.
He has arranged a temporary fix, gambling that he can kick his own can down the road and catch up later. Unfortunately there is no later.
When you make deals with the devil, who win? Go ahead, guess.
When did the rich forget who, exactly, made them rich?
When did the rich stop losing sleep over the fact that while 98% of the country was shouldering the effects of the worst depression since '29 they were doing better than ever?
Are you fabulously wealthy or do you suffer from the long-odds belief that you'll someday have a chance to be pissed that someone might ask you to pay another measly $28,000 out of your $1,000,000 salary?
But when are we going to get over Obama bashing? He was on point in his talk about liberal purists. What this deal did was show the hypocritical nature of the Republicans who talk about deficit reduction, but don't want to make the wealthy pay their fair share to reduce it.
Further more this deal came less than a week after Senate Republicans backed out of a similer deal before the ink on it was dry.
What he left out was that 14 million first time voters, who put him in office, stayed home in the mid-terms. It would have been smart to keep these young people engaged.
The "shellacking" was from the left.
He made the hard but correct choice-at some serious risk to his own job security-and preserved a lifeline for 2 million vulnerable Americans.
The economic elite would sacrifice us for the bottom line, the educated elite for the party line. From the perspective of those sacrificed that doesn't add up to a dime's worth of difference.
The day the liberal elite starts thinking of us as human beings, not as integers to be added or subtracted as needed to secure the greatest good for the greatest number, is the day they will have earned the right to be our champions. Until then, far too many of us will be seduced by the faux populists on the right.
Other than ardent partisans, the only Americans closely following this debate were the 2 million American families whose futures hang in the balance. While the curses of 100,000 polibloggers rain on his head, the president will be in our prayers this holiday season. God bless you, Barack Obama. It wasn't easy but you did the right thing.
You don't get it, do you.
Now that he has bargained with a reduction in SS taxes it is only a matter of time before the howling starts about the deficit and cutting SS is the only answer. As the Rs say once you have a tax cut it is almost impossible to raise it back up and I'm sure this applies to SS taxes as as well as income taxes. Talk about playing right into the hands of the enemy. And Obama wonders why he has lost his base? What a fool.
Republicans rot in hell for all of me - they have morphed into something that is unrecognizable. They are killing my Republic. I am repulsed, repelled, disgusted and furious. What stupid people to follow such reptillian throwbacks.
What future will the children have if they prevail? I cannot bare to think of it.
I shall disturb, fight, annoy, wreck and whatever else I can think of to stop these ghouls. May God curse their every breathe!!
One Great Grandmother
He is an enabler, at best, rewarding the right wing for being obdurate.
There is plenty of blame to go around. I blame myself for so naively thinking that Obama could and would effect Change. I blame those who have successfully bought politicians, I blame the politicians of all stripes that have sold their souls, and their country, I blame the media, mostly owned by those whose success of defrauding the government allowed them to buy all the independent media outlets (Hello Rupert), but mostly I blame the American people for so easily buying into, and allowing to happen, a system of government so corrupt that it’s only hope for survival is another civil war.
The socialists and anarchists on the left (myself included), must split from the democratic party and start a new revolution. Even if that means losing the presidency for the next 12-16 years. We must do it now, or perish!
But he doesn't seem to quite yet understand (at least in the- supposedly- dumbdowned sphere of public discourse) that Barrack's (I wont venture on who his real father was) "base" was always the bankers and Chicago machine. Reich is appalled that Barrack is not playing the 2-party game by established 20th century rules. But its the 21stc and, like it or not, money-votes trump little-people votes.
It takes men with courage, not skillful connivance, to stand up to and challenge this new reality. And obviously Barrack is telling us that he ain't one of the boat rockers.
I'm reminded of the 'classic' SNL sketch from the mid-70s, about Dominican [irony] Republic baseball player Chico Escuela, of "Baseball... been berra berra good... to me" fame.
Inside baseball (banker's world politics) was berra, berra good to the so-called 'Federal' Reserve US, c.1920s-70s. But that fun park ride is long over, and real people need to step up to the real plate, before the global Order boils this Republic & its middle class alive, like the proverbial frogs in hot water. Easier said than done in info-overload world; but we still vastly outnumber them.
So how do we stop it? We could let all the tax cuts expire. It would be blamed on the Democrats.
So would letting all of the tax cuts expire now be a good way to build societal consensus around a fairer deal? No. It would make people angry, hurt people, and could tank the economy.
In the short term, we could demand a simultaneous raising of the debt limit, so that the zealots don't have us over a barrel in the spring.
In the long term, we focus the anger on building a consensus that the old deal was the correct one.
Bottom line: we wouldn't even be having this conversation if the tax rate on wealth had been left alone. The ONLY point that matters is that the wealthy aren't paying more than half of what they were when Reagan came into power, and that fact alone has done more to damage the economy than even our thoughtless and stupid wars of late. This welfare for the wealthy, not mere tax cuts, IS the whole issue.
What's needed is the tax cuts to expire, the tax on wealth doubled, further extensions for unemployement funded by new taxs.
Youre absolutely right in your last sentence. The old deal was the right deal, that old deal being the tax structures under Eisenhower.
And hi started us on the Soviet Union track with military spending.
cedarcomm.com/~stevelm1/USDebt.png
- Eienstein
We've got big problems, for which most of the DeeCee Establishment seems bewildered, if not actively committed to making them worse.
Why not start with the good old 5Ws and H?
WHO- is benefiting from the changes this century
WHAT- have been the principal changes
WHEN- did the bad changes begin; do they appear to be part of a trend or cycle that will end 'on its own' at some point?
WHY- on Earth would anyone want to destroy the US middle class, and its CONSUMPTION-bas ed GDP? Perhaps someone above the level of DeeCee gov't and 'Federal' Reserve has decided that mass-consumptio n economics is no longer "sustainable" in the 21st century?
HOW- can 'they' take down such a vast middle-class consumption economy?
Answer these 5 basics, in a way that most 'reasonable men' (non-blinkered) would acquiesce to, and you/we will be a lot closer to understanding the problem and how to take effective action.
"and give their stolen low-end jobs to our unemployed" - sir you did not spend one hour on the filed or fixed your roof.
---
this tried Clinton - and our "unemployed" did not earn even the transportation cost.
You will make sure carier in the Palin's administration.
Learn about collapse of Russia economy under the Jeltzin. People who will seek asyle elswhere will find that their pensions will be worthless like ruble after Yeltsin era.
Wikipedia: Boris Yeltsin came to power with a wave of high expectations. On 12 June 1991 he was elected president of the Russian Soviet Federative Socialist Republic with 57% of the vote, becoming the first popularly elected president. However, Yeltsin never recovered his popularity after a series of economic and political crises in Russia in the 1990s
I thought the US was a democracy. I thought the US was about the common good.
Where is the sheriff?
The US is a constitutional republic, not a democracy. Our founders warned us about democracies and their dangers above all other forms of government. If you examine our founding documents, you'll understand that the US is about personal achievement and personal responsibility.
Common good is achieved by individuals operating in their own self-interest.
You should pick up a book, Jane.
The observation that we are a constitutional republic, not a democracy, is a stupid right wing canard that doesn't mean a damn thing. A republic is, by definition, a democracy and the argument that ours is not a constitutional democracy AKA republic is pathetic. And to say that the common good is achieved by individuals operating in their own self-interest is a lie. That statement's just a tame expression for justifying the behavior of the mafia. Common good is achieved by socially responsible individuals behaving fairly with all revealing an intelligent understanding of an enlightened self-interest that realizes that whats good for the whole is good for the individual. Common good is achieved by an enlightened interdependence which knows that anything less such as pure independence of action, is the law of the jungle and guarantees that what defines "right" is might, Very Hilterian.
Instead of the envy and hatred of those who succeed, you might consider channeling your efforts into your own success.
The wealthy are just people like you who directed their energies positively. They do no owe you any part of their success.
A 1776 American
I can take care of myself, except that I can't escape the wage slavery, joblessness crises the wealthy have caused, and no matter how hard I work, I'm one illness away from total financial destruction. But I suppose that's my all my fault, eh?
http://readersupportednews.org/pm-section/26-26/4210-cheer-obama-but-oppose-his-tax-extension-deal
What galls me is that NO ONE has the guts to SHAME THEM by challenging their much flaunted "Christianity." Would Christ have given money that we don't even have -that we have to borrow from foreigners - to the rich and deprived the poor? Social Security recipients haven't received their COLAs in 2 years; today congress cut the subsidies to public transport, so just to get to work will cost the lower income people more and THE REPUBLICANS COMPLAIN ABOUT CLASS WARFARE!??
Seems to me that THEY ARE THE ONES WAGING CLASS WARFARE AGAINST THE MIDDLE AND LOWER INCOME GROUPS IN THIS COUNTRY. What Reagan called "starving the beast;"
the "beast" being the sum of all social services.
A 1776 American
p.s. Boy! Phew! Reich really loves riling you up, doesn't he?
who is considering who "more virtuous and more deserving?" I would answer that Obama and rich democrats like Reich and Clinton, not the roofer boss. Come clean Z.
A 1776 American
As an senior Obama staff told Keith Olbermann, the reason we, the American people don't "get it" is that we don't understand all of the facts.
Obama and his advisers are nothing more than cynical arbiters of corporate interests.
Shame on us for not "getting it."
It's also time to start looking for a presidendial candidate that understands what it means to be a Democrat!
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