GOP Representative moves to increase deficit–and aid the investor class
by Linda Beale
GOP Representative moves to increase deficit–and aid the investor class
The GOP has made lots of fusses lately about the deficit. According to the party line, earned benefits that Americans rely on for health care and retirement income just “have” to be reduced, no matter how painful it is to the GOP-controlled House to do it, because of the unrelenting deficits that are destroying the US economy.
How then can any GOP member of the House think it is reasonable to introduce legislation that institutes a permanent tax cut that will cost the government billions will benefitting primarily the very rich investors in corporate stock?
Peter Roskam (Republican from Illinois and member of the House Ways and Means Committee) introduced legislation–H.R. 3091 (for those with BNA access)– on Tuesday that would make the ridiculously low Bush tax legislation provisions for capital gains and dividends permanent. A 15% rate on the main source of income that the uberrich enjoy, while the rest of us pay regular ordinary income rates on our wages.
How does Roskam justify this further giveaway to the rich, this further example of governmental capture by oligarchy? He claims that this revenue reduction that benefits mostly the very rich will –yes, you guessed it–help generate U.S. investment and create jobs. Making this giveaway rate permanent for everybody will “foster a culture that encourages investment, capital formation, and economic growth”, he says. BNA Daily Tax Report, Oct. 5, 2011.
Balderdash. Low capital gains rates have nothing to do with encouraging investment or capital formation or job creation. They mostly reward investors in the secondary market on their trades. They let the rich get even richer and make more investments–probably in emerging markets rather than in the US.
It is true that having more cash on hand because you didn’t pay as much taxes means you’d have more to spend. So why not encourage economic growth by putting cash in the hands of the middle and lower income classes through the payroll tax reduction proposed by Obama? (Yes, it should be temporary–as an economic stimulus.)
This is just another example of class warfare in action in the right-leaning House GOP. All the fuss about deficits. All the economic terrorism about the U.S. debt limit. But reducing revenues still more in order to benefit the wealthy–well, the Mr. R. just can’t wait to do that one.
originally published at ataxingmatter
Incenting the rich to amass capital is like incenting Chris Christie to have a second cheeseburger.
Yes, put money in the hands of the many but, I’m one who agrees that using the FICA tax to do it is like using your home to extend your declining purchasing power.
Oh, we did that…since 1996 and here we are today.
$1.4 trillion per year is needed in the hands of the 99%. You can’t get there with the tax code.
“So why not encourage economic growth by putting cash in the hands of the middle and lower income classes through the payroll tax reduction proposed by Obama?”
Rather the place look like Honduras.
It appears that the GOPeaPartiers are not concerned with anyone outside the 1%.
wall st will change, once it don’t own the congress.
“You can’t get there with the tax code. “
Well, you can, but you’d have to tax the rents that the working class is paying.
Adding them up, it’s about $3T/yr, so a 50% tax on economic rents would give us the money to redistribute.
You can not cut enough taxes via income to make up for $1.4 trillion dollars per year of income no longer in the hands of the 99%.
Certainly, we could cut the FICA collections to make up the difference of the $1.1 trillion in total income taxes paid in that is now no longer collected, but then what would that do to the programs funded by FICA. Of course a lot more would have to be cut to cover the non-collected $1.1 of income taxes.
With that, just to cover the current Bush/Obama extended tax cut requries about 111 million new jobs created over 10 years. But, of course we are not collecting income taxes anymore, so what does the number of jobs created matter.
You can’t get there with tax cuts.