The White House and some Democrats have made disturbing noises in the days since the elections about being open to a compromise on the Bush tax cuts for the rich (individuals with annual incomes above $200k or $250k for families). This would continue the three-decade trend of taking care of the richest while taking services from the rest of us. The deficit hawks will demand cuts to cover the loss of revenue. Considering that only 40% think extending the Bush tax cuts for those in this category is a good idea, what can they possibly be thinking?
My ‘best case” take on this is that Democrats are concerned that they will be unable to get an extension of the middle-class tax break through Congress after the Republicans take control of the House in January. The Republicans would have the votes to defeat, and could conceivably not introduce, any bill extending the middle-class cuts if the tax breaks for high earners are not extended. They can then claim it was the White House’s fault that the middle class lost their tax break. In this scenario, Democrats had damned well better pass the middle class tax break in the lame duck session. Compromise to Republicans over the past 2 years has generally meant “do it our way or we will obstruct you”. It is time for some backbone and leadership from the White House and Congressional Democrats.
My “cynical” take on this is that the flood of corporate money unleashed by the Supreme Court’s Citizens United decision has had the desired effect. This 5-4 decision will take its place as one of the worst blows to the democratic process in the history of the Supreme Court. Democrats realize that to win elections in the future, they will need to tap into corporate funding as well as that of the very rich. Get real…most US corporations will not support Democrats in any case (or not as much as they support Republicans) and the rich who agree with progressive causes will send their money to Democrats anyway. Basically, Democrats will not gain anything politically by supporting this extension.
Three excellent articles dealing with inequality in America have been in the press and on the web recently. I’ve already quoted and provided the link to Nicholas Kristof’s New York Times "Banana Republic" op-ed piece.
Then in a discussion of the 2010 elections on the new deal 2.0 website, Lynn Parramore notes that “as soon as you [pass] the average household income level in the United States, which is currently around 50k per yr, you see voters trending Republican.” For those with incomes in excess of $200k, 62% voted Republican. Ms. Parramore continues: “Somehow, we have got to convince more of the affluent voters that the ever-widening gap between the rich and poor is not in their interest, no matter how uncertain the future looks. It rips communities apart. It leads to every kind of social ill and unrest...It’s ruinous to democracy and it’s even destructive to capitalism.”
Finally, in Sunday’s New York Times, Frank Rich asks the question: “Who will stand up to the superrich?” Mr. Rich, quoting President Obama, notes that the cost to the deficit for the extension of the high earner tax breaks would be $700 billion. Good point, Rich concedes, but the “bigger issue is whether the country can afford the systemic damage being done by the ever-growing income inequality between the wealthiest Americans and everyone else, whether poor, middle class or even rich.”
These quotes all express sentiments similar to those in Tony Judt’s Ill Fares the Land. We’ll continue that discussion later this week.
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