Friday, July 20, 2012
Obscuring A Debate Over Butlers
For all the superheated rhetoric of yet another election cycle, it's as clear as ever that the Republican and Democratic parties in Washington pretty much support the same economic policies. Indeed, any honest perusal of congressional votes proves that the party establishments are roughly the same when it comes to financial deregulation (less of it), job-killing free trade (more of it), bailouts (more of them) and corporate taxes (less of them).
Politicians and partisan media outlets deny this obvious reality, of course. But they do so because they have a vested interest in the red-versus-blue "polarization" narrative from which they generate campaign contributions and ratings, respectively. This is why their hysterical attacks on their foes—and their refusal to acknowledge the political duopoly—has such a grating "doth protest too much" quality. It's also why more Americans are wholly tuning out of politics—we're less and less interested in gazing at two heads of the same economic monster.
That said, if you are still gullible enough to believe the illusion of huge differences on economics, behold the "debate" over taxes that is now roiling the presidential race.
President Obama kicked it off with his claim last week that he wants to stop "another tax cut for the wealthy." As supposed proof, he asserts that by proposing to extend all of the Bush tax cuts except those applying to top marginal tax rates, he will make sure everyone "making over $250,000 a year (will) go back to the income tax rates (they) were paying under Bill Clinton." In response, Mitt Romney, who wants every Bush tax cut extended, played his role in the kabuki theater, claiming Obama "plans on extending (the tax cuts), just for certain classes of Americans" -- an idea that the Republican presidential nominee says "will kill jobs." Not surprisingly, almost every news outlet echoed it all, insisting that this is an epic dispute over whether to only extend "the Bush-era tax cuts for people earning less than $250,000 a year," as The New York Times put it.
There's just one problem: Obama, Romney and the media are all lying.
Because of America's progressive tax system, all taxpayers under Obama's plan—including those making more than $250,000 a year—will get a tax cut on their first $250,000 of income. According to the Institute for Taxation and Economic Policy, this means that Obama's initiative, which would cost $150 billion, will give a one-year $20,130 tax cut to the top 1 percent of income earners. Meanwhile, the $210 billion Republican plan would give that income group a $70,790 tax cut.
In other words, this supposedly monumental debate isn't over whether to punish or further enrich households in the top 1 percent—both proposals do the latter. Instead, this is a minute dispute over whether the tax code should give each of those households the equivalent salary of one butler (Obama's plan) or three butlers (Romney's plan). For every other income group, the two proposals are identical.
Now sure, at a time of deficits, Obama is right to oppose devoting an additional $60 billion to giving the wealthy two more butler salaries on top of the one they will already get under his plan. And he's especially right when we know that, despite Romney's hysterical job-loss claims, the economy did far better when the rich were paying Clinton tax rates on their top income.
However, pretending this is some big divide is yet another farce. Both parties are proposing to enrich the already rich, meaning the whole conflagration is yet another attempt to hide the two-headed monster behind a mask of conflict.
Unfortunately, that monster is still under there—still rigging the economy against us.
David Sirota is a best-selling author of the new book "Back to Our Future: How the 1980s Explain the World We Live In Now." He co-hosts "The Rundown" on AM630 KHOW in Colorado. Email him at ds@davidsirota.com, follow him on Twitter @davidsirota or visit his website at www.davidsirota.com.
© 2011 Creators.com
Politicians and partisan media outlets deny this obvious reality, of course. But they do so because they have a vested interest in the red-versus-blue "polarization" narrative from which they generate campaign contributions and ratings, respectively. This is why their hysterical attacks on their foes—and their refusal to acknowledge the political duopoly—has such a grating "doth protest too much" quality. It's also why more Americans are wholly tuning out of politics—we're less and less interested in gazing at two heads of the same economic monster.
That said, if you are still gullible enough to believe the illusion of huge differences on economics, behold the "debate" over taxes that is now roiling the presidential race.
President Obama kicked it off with his claim last week that he wants to stop "another tax cut for the wealthy." As supposed proof, he asserts that by proposing to extend all of the Bush tax cuts except those applying to top marginal tax rates, he will make sure everyone "making over $250,000 a year (will) go back to the income tax rates (they) were paying under Bill Clinton." In response, Mitt Romney, who wants every Bush tax cut extended, played his role in the kabuki theater, claiming Obama "plans on extending (the tax cuts), just for certain classes of Americans" -- an idea that the Republican presidential nominee says "will kill jobs." Not surprisingly, almost every news outlet echoed it all, insisting that this is an epic dispute over whether to only extend "the Bush-era tax cuts for people earning less than $250,000 a year," as The New York Times put it.
There's just one problem: Obama, Romney and the media are all lying.
Because of America's progressive tax system, all taxpayers under Obama's plan—including those making more than $250,000 a year—will get a tax cut on their first $250,000 of income. According to the Institute for Taxation and Economic Policy, this means that Obama's initiative, which would cost $150 billion, will give a one-year $20,130 tax cut to the top 1 percent of income earners. Meanwhile, the $210 billion Republican plan would give that income group a $70,790 tax cut.
In other words, this supposedly monumental debate isn't over whether to punish or further enrich households in the top 1 percent—both proposals do the latter. Instead, this is a minute dispute over whether the tax code should give each of those households the equivalent salary of one butler (Obama's plan) or three butlers (Romney's plan). For every other income group, the two proposals are identical.
Now sure, at a time of deficits, Obama is right to oppose devoting an additional $60 billion to giving the wealthy two more butler salaries on top of the one they will already get under his plan. And he's especially right when we know that, despite Romney's hysterical job-loss claims, the economy did far better when the rich were paying Clinton tax rates on their top income.
However, pretending this is some big divide is yet another farce. Both parties are proposing to enrich the already rich, meaning the whole conflagration is yet another attempt to hide the two-headed monster behind a mask of conflict.
Unfortunately, that monster is still under there—still rigging the economy against us.
David Sirota is a best-selling author of the new book "Back to Our Future: How the 1980s Explain the World We Live In Now." He co-hosts "The Rundown" on AM630 KHOW in Colorado. Email him at ds@davidsirota.com, follow him on Twitter @davidsirota or visit his website at www.davidsirota.com.
© 2011 Creators.com
Anonymous, you dunce, the median household income at the end of 2011 was $51, 413. How in the whole wide world did you come up with the ridiculous assumption that the middle class makes $250,000 a year? That's one hilarious figure, funny man! I've never read a report that puts the upper middle class household income ceiling at anything above $92,000 a year.
Tell me, anonymous, why would you so foolishly display your economic ignorance to the whole world?
Well dunce, I'm talking about a normal middle class family. The median number you use takes into account all those poor families so its skewed. I'd lthink that the $92,000 you quote is for a lower middle class family. But I'm talking about the normal people, like the ones who live in rural Waukesha County, or Ozaukee or Washington Countys. Those seem like middle class folks to me, the ones that make $150k to $400k a year. Once you get in the $400k to a milllion a year you are upper middle class. Then over a million , I say then you are upper class. But any moron can make $92k.
You clearly went of the deep end a long time ago, Anonydunce. I know you can't do this, cause you're incapable of it; but prove your claims about your class income seperations. Try to. Go ahead, try to. You can't, cause you're claims are absolute fallacies (that means an error in reasoning, simp.) I can't believe you'd even purport that the middle class income range would even come close to touching half a million a year. You are out of you're simple little mind! You can't just make some junk up and call it fact. Like this; the con, here, is that a millionaire is really a poor person. A million dollar per year income in considered poor. That's just nonsense!
Again, I want you to prove me wrong. You can't. You won't. But I'd sure like you to.
You are twisting things around. A million a year is a good income, not poor. But to understand what middle class is you can't look at median figures. You have to start with average. Median eliminates multimillionairs. If you have 3 families, one 30k, one 60k, and one makig a million. The average is $363k and the median is $60k. To me $363k is middle class not $60k. I would also eliminate all those who chose to be on welfare. I would only average those who chose to work. Otherwise your averages are pulled down by the losers.
I was reading that the average black family in Mequon makes almost 50% more than the average white family. Many of the blacks in Mequon have chosen to play professional sports which pays pretty well. Thank you black people of Mequon for making your city a better place to live.
Clearly, the above comment indicates that the bottom 98% is less than Middle Class, therefore is "union thug" working class material! Are you going to take that as fighting words?
Look at the bottom half "who does not pay taxes". That statement is flawed reasoning to be used as propaganda of why to cut PERSONAL income taxes for the top 1%. While they stats may truthfully say that the top half pays 97% of the 1040 taxes (it did not include state income tax, sales tax, gas or other excise taxes, and social security payroll taxes), it only means that just 3% of the IRS dollars comes from the bottom half, it does not mean that only 3% is what was withheld on their paychecks. What makes it propaganda is they refuse to break down how that bottom half is broken down, how much of them pay taxes, how much of them get EIC back that exceeds what their employer withheld, even ignores that which is withheld but never has a return filed (illegals? those with outstanding tax warrants?). Considering that total IRS take is that which they keep, after EIC and other tax credits are given back, it means that the upper half who pays is paying 97% of the NET take, but not paying 1 red welfare cent for the bottom half's EIC. Instead, the upper portion of the bottom half is the only portion that is paying for the lower portion's EIC, if you want to look at that way, and still has some leftover to contribute that last 3%.
How much do you need to make to get into the "upper half"? Not much. Combined husband and wife is only about $33K (in 2008) to be considered upper half. It means that if you make OVER 33K, then YOU ARE NOT PAYING ANYBODY's EIC!!!! And that is true even before the upcoming November election.
Clearly, the lower half is not Middle Class, can't even live well in the 'hood on that.
Now split up the upper half, call it the upper 2 quarters. To be in the upper quarter, it is a JOINT income of only $67K. Is that Middle Class? It sure won't let you live well out here in Waukesha County, even it's poorest parts like the city of Waukesha itself!
Yet, we are convinced that by having a car, having a house or apartment in the suburbs, being able to shop at something better than Wal-Mart (or having your kids in mostly white classrooms) is what makes a family "Middle Class".
Don't let the rhetoric of "extending Bush tax cuts" get in the way of the real difference between Obama and Romney. The real battle is do you want to put in power a prez who "knows business" as in "When choosing which Bain Capital company to support, and which to kill, choose to support the one that is making the most profit, do not consider whether it made money by outsourcing jobs", or do you want to clean "House" (and Senate), and put in a congress that is trying to create an environment that will let SMALL BUSINESS survive, which hires US Citizens, thereby providing US customers and US shoppers with an income.
The wealthy will always be able to change their residence to other states or their citizenship to other countries, while still running the American business they own from a distance. It's not like they need to show up for 40 hours every week to run their businesses like we do to work in them. Lowering taxes to keep them here only means dropping it to Zero, which leaves everybody between 47% and 99% to pay the ENTIRE burden. It's local businesses we need to support, not encourage local rich people to "trickle down" their tax free wealth.
If I were a wealthy Mr. Pennypacker, would I want to buy an American made yacht or luxury car, or a European made yacht or luxury car? Think about it! Supply-side trickle down is the real lie. The truth is it created trickle up poverty.