by Linda Beale
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