http://robertreich.org/post/1150695735
The Defining Issue: Who Should Get the Tax Cut - The Rich or Everyone Else?
Robert Reich
Sunday, September 19, 2010
Who deserves a tax cut more: the top 2 percent - whose wages and benefits
are higher than ever, and among whose ranks are the CEOs and Wall Street
mavens whose antics have sliced jobs and wages and nearly destroyed the
American economy - or the rest of us?
Not a bad issue for Democrats to run on this fall, or in 2012.
Republicans are hell bent on demanding an extension of the Bush tax cut for
their patrons at the top, or else they'll pull the plug on tax cuts for the
middle class. This is a gift for the Democrats.
But before this can be a defining election issue in the midterms, Democrats
have to bring it to a vote. And they've got to do it in the next few weeks,
not wait until a lame-duck session after Election Day.
Plus, they have to stick together (Ben Nelson, are you hearing me? House
blue-dogs, do you read me? Peter Orszag, will you get some sense?)
Not only is this smart politics. It's smart economics.
The rich spend a far smaller portion of their money than anyone else
because, hey, they're rich. That means continuing the Bush tax cut for them
wouldn't stimulate much demand or create many jobs.
But it would blow a giant hole in the budget - $36 billion next year, $700
billion over ten years. Millionaire households would get a windfall of $31
billion next year alone.
And the Republican charge that restoring the Clinton tax rates for the rich
would hurt the economy - because it would reduce the "incentives" of the
rich (including the richest small business owners) to create jobs - is
ludicrous.
Under Bill Clinton and his tax rates, the economy roared. It created 22
million jobs.
By contrast, during George Bush's 8 years, commencing with his big 2001 tax
cut, the economy created only 8 million jobs. And as the new Census data
show, nothing trickled down. In fact, the middle class families did far
worse after the Bush tax cut. Between 2001 and 2007 - even before we were
plunged into the Great Recession - the median wage dropped.
It's an issue that could also be used to expose the giant chasm that's
opened between the rich and everyone else - aided and abetted by Republican
policies. As I've noted before, in the late 1970s, the top 1 percent got 9
percent of total national income. By 2007, the top 1 percent got almost a
quarter of total national income.
These figures don't even count in taxes. The $1.3 trillion Bush tax cut of
2001 was a huge windfall for people earning over $500,000 a year. They got
about 40 percent of its benefits. The Bush tax cut of 2003 was even better
for high rollers. Those with net incomes of about $1 million got an average
tax cut of $90,000 a year. Yet taxes on the typical middle-income family
dropped just $217. Many lower-income families, who still paid payroll taxes,
got nothing back at all.
And, again, nothing trickled down.
As I've emphasized, the U.S. economy has suffered mightily from the middle
class's lack of purchasing power, while most of the economic gains have gone
to the top. (The crisis was masked for years by women moving into paid work,
everyone working longer hours, and, more recently, the middle class going
into deep debt - but all those coping mechanisms are now exhausted.) The
great challenge ahead is to widen the circle of prosperity so the middle
class once again has the capacity to keep the economy going.
In other words, this is the right issue. It's the right time. It allows
Democrats to explain what the Bush tax cuts really did, why supply-side
economic is bogus, and the economic challenge ahead.
Even if Democrats feel they have to respond to the Republican charge that
taxes shouldn't be raised on anyone when the employment rate is 9.6 percent,
they have a powerful fallback: Extend the Bush tax cuts for everyone through
2011, then end them for the rich while making them permanent for the middle
class.
Get it, Democrats? Please don't blow it this time.
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, and his most
recent book, Supercapitalism. His "Marketplace" commentaries can be found on
publicradio.com and iTunes.
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***
From: Marcy Winograd
Sent: Tuesday, September 21, 2010 7:56 PM
Subject: [PDLA] Oct. 2nd LA City College Event to Coincide with DC March -
One Nation Working Together
For Immediate Release
Contact: Kerry Townsend Jacob (213) 985-1694
Scott Mann (323) 333-4850
ONE NATION WORKING TOGETHER TO HOLD MASSIVE DAY OF ACTION IN L.A. ON OCTOBER
2ND
Event to include voter outreach to over 200,000 Californians
"BlogMobile" to gather American stories while traveling from LA to DC
LOS ANGELES (September 21, 2010) - Responding to a call to restore
opportunity for Americans and pull America back together, One Nation Working
Together California will hold a massive day of action on October 2, 2010.
The event, to be held at Los Angeles City College, will bring thousands of
Los Angeles area residents together in an effort to re-energize voters for
this November's election, and call for an end to the polarizing tactics that
are being used to divide our country.
One Nation Working Together California will also be sending a group of
'citizen journalists' via RV who will be blogging about the concerns of
those they meet as they travel from Los Angeles to Washington DC. The
'BlogMobile' will depart Los Angeles on September 24 and arrive in
Washington DC for the national rally also being held on October 2.
"One Nation Working Together California is a grassroots movement that will
fight for future opportunities for our students and the unemployed, regain
the hope we held so proudly in 2008, redefine the future, and move our
country forward," said Laphonza Butler, President of SEIU ULTCW (United Long
Term Care Workers' Union).
The day-long Los Angeles event on October 2 will start at 9 am and feature
live performances, a public interactive display symbolizing our unity, the
personal stories of struggle shared by One Nation participants, and a
massive voter outreach in which 200,000 voters will be encouraged to
reengage in the political process. There will also be a live simulcast with
the national march occurring in Washington DC that day at which half a
million people are expected to gather at the Lincoln Memorial.
"There's no question that at a time when we should be united as a nation to
tackle the issues of unemployment, the economy, poverty, education,
immigration and justice for all, many Americans feel disconnected," said
Angelica Salas, Executive Director of Coalition for Humane Immigrant Rights
of Los Angeles (CHIRLA). "It's time for us to continue the movement of
political engagement that we started in 2008. One Nation Working Together
is the vehicle by which we can do that."
One Nation Working Together is a fast-growing grassroots movement of people
from all backgrounds united by the goal of reordering our nation's
priorities to invest in our most valuable resource - our people. The
movement is comprised over 200 organizations and tens of thousands of
individuals who believe that everyone deserves the opportunity to achieve
the American Dream of having a secure job, a safe home and a quality
education.
The need for the One Nation Working Together movement and its objective to
restore opportunity to all was reinforced as new increased unemployment
figures and poverty statistics were recently released.
"For me, the One Nation Working Together movement is about regaining our
core values - values that are based on fact and realities. Not based on
hate, fear and poll-inflamed rhetoric," said Reverend K.W. Tulloss of
National Action Now and Pastor of Weller Street Baptist Church.
For more information, please visit www.OneNationCA.org.
###
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