post from jobsanger
on 08 November 2010 01:04:00 AM. © jobsanger
One of the first things we can expect the Republicans to try and do with their new-found power in Congress is to reward their rich buddies (and campaign donors) on Wall Street with an extension of the Bush tax cuts. They are already trying to claim this is not a reward for the rich, but a job creation maneuver. That's just a lie. Tax cuts are notoriously bad job creators.
A company doesn't hire new employees just because they got a tax cut. They only hire new employees when they need them to deliver the goods and services they offer (regardless of what the tax rate is). This tax cut for the richest 2% of Americans will do nothing but fatten the bank accounts those who already have most of the country's wealth (and increase the budget deficit the Republicans said they would cut). David Stockman (pictured above), budget director for President Reagan, puts it well when he said:
"Two years after the crisis on Wall Street, it has been announced that bonuses this year will be $144 billion ? the highest in history. That?s who?s gonna get this tax cut on the top, you know, 2 percent of the population. They don?t need a tax cut. They don?t deserve it. And therefore, what we have to do is focus on Main Street."
The sad fact is that the Republican proposal to give the richest Americans a tax cut will only further exacerbate the vastly unequal wealth and income distribution in this country. Even economic advisors to conservative-icon Ronald Reagan know this is a step too far and is not good for this country. Stockman is certainly no liberal -- far from it. But he does believe in a semi-rational economic policy.
New York Times columnist Nicholas Kristof says we have already reached the point
where our income and wealth distribution is worse than many "banana republics" in Central America, and says we should "not aggravate income gaps that already would make a Latin American caudillo proud." He goes on to say, "We've reached a banana republic point where our inequality has become both economically unhealthy and morally repugnant." Consider the following facts:
* In 1976 the richest 1% took home 9% of this country's income. Currently they take home 24% of all United States income.
* In 1980 the salary of a corporate CEO was 42 times larger than the average worker. By 2001 than figured for CEO's had climbed to 531 times the average worker's salary (and is still rising).
* Between 1980 and 2005 at least four-fifths of the total increase in American incomes went to the richest 1% of Americans.
Frankly, there is no way to justify this kind of inequality (unless you happen to be one of the richest 1% or one of their Republican lackeys). We know that the Great Depression was caused by this kind of unequal wealth and income distribution. It is also becoming obvious that our current recession is due to the same thing.
To further exacerbate this unequal distribution with an unneeded and unfair tax cut for the rich, will just at the least extend the recession for many years, and at the worst will throw the country into a Depression as bad or worse than the Great Depression.
The unemployment figures released by the government show nearly 10% unemployment (although the figures are closer to 19% when the long-term unemployed and the underemployed are added in). If we are going to increase the deficit, it should be for real job creation and not just to pad the bank accounts of the rich.
Sadly, it now looks like President Obama is willing to "negotiate"
with the Republicans and extend the tax cuts for the rich for another year or two. That would be a serious mistake. He should stand firm and veto any extension of the Bush tax cuts for the rich. Not doing so would just help the Republicans to sow the seeds of destruction for the American economy.
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