Rich People Win Again
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For those not following the controversial tax cuts bill on C-SPAN this evening, let the title summarize what happened and here are my thoughts. From this bill passed by the House (and already the Senate, and will soon be signed by the President) lower and middle class America get an extension of their current tax cuts as well as 13 more months of funding for unemployment benefits. These measures, especially the unemployment benefits, were sorely needed. Tax cuts for lower and middle class Americans will sustain the discretionary income for these people, which boosts spending and thus the economy. However, the unemployment benefits are even more vital, for they more directly benefit those that need assistance the most. Unemployment benefits enable millions of Americans to pay rent and put food on the table for their children when they can’t find a job in this dire economy. 9.7% of people are unemployed, and 17% are underemployed; it is an epidemic of staggering proportions.
Contrast this picture with the uniform insistence by Republicans that, not only should those earning over $250,000/year have their Bush Tax Cuts extended, but the estate tax should be reduced and the limit raised. If not revised, the estate tax would levy a 55% tax on inheritance of over $1 million. Instead, Republicans mandated the limit be raised to $5 million for individuals, $10 million for couples. Below those thresholds inheritors would pay nothing, and above those they would only pay a reduced rate of 35%. I’m not sure which provision is more of a windfall for the rich. On the one hand, the top 1% earn as much as the next 25% of America, so their tax cuts will be proportionally epic. On the other hand, it’s difficult to get a sense of how wealthy the barons of America really are, so the estate tax reductions could be the road to a Gatsby-esque “old money” epoch. At least in synergy, the money they save on taxes will be transferred to their progeny through the estate tax holiday!
Criminally, Republicans held the sane portions of this bill–lower and middle class tax cuts + unemployment benefits–hostage while demanding these repulsive ones, worthy of the Gilded Age, as compensation. President Obama initially brokered this deal with Senate Republicans, so he is partially to blame. However, as Republicans have virtually filibustered any and all legislation for the last 2 years, he had little choice but to give a mile to the rich to give an inch to the poor. Sometimes, it’s questionable whether poor and working-class people voting only in marginal numbers is the real cause of these perpetually Aristocratic policies our government seems to favor; or, rather, if they don’t vote because they sense they won’t be represented. With Democratic majorities in both houses of Congress passing a bill otherwise erotic to Republicans and the wealthy, there’s little reason for political optimism for most of Americans.