“How a party can so nakedly represent only the top 1 percent while at the same time try to stop anything that will help the economy, and survive while doing it, is just beyond me.” – Michael Tomasky
Look for the usual talking points from those who support the GOP and the anti-tax propositions they put forward as they allow efforts to re-instate the 6.2% payroll tax on workers’ wages. The President is not only trying to keep the lower rate in place but wants to reduce it further for workers and employers and pay for it by hitting millionaires with a 3.5% surtax. I’m sure we’ll hear a lot about trickle-down economics and how allowing the wealthiest to keep all of their income will create jobs. We know that’s bunk.
The 2% payroll tax deduction that was part of the deal that the Obama administration made with Republicans last December in exchange for continuing the tax cuts to the wealthiest 1% is due to expire at the end of this year and the GOP leadership is willing to allow that to occur. These are the same people that holler for tax cuts then scream if they are reinstated to cover the deficit, calling them tax increases. And you can bet your bottom dollar they will vigorously work to extend the Bush tax cuts for the rich due to expire at the end of 2012, unless the voters wise up and reduce them to an insignificant minority in this next election cycle.
As Michael Tomasky points out in his informative piece, “GOP is Set to Self-Destruct Over Payroll Tax”, the Republicans in the Senate will oppose this tax relief for most working Americans because it means the millionaires will have to ante up 3.5% of what they make over $1 million dollars to cover the revenue loss. In other words, if a person makes $1.1 million they will have to pay an extra $3500 in taxes on that $100, 000, reducing their income from $1,100,000 to $1,096,500. How will they ever keep up appearances over this tragic loss?
But of even greater hypocrisy on the part of GOP/TeaParty is that this extended tax break to the 99% will also apply to employers who net less than $5 million in revenue each year. This new deal will also give all employers a further tax break by not collecting any payroll taxes for any new hires they bring on board. The surtax on millionaires will take care of this shortfall. “So the new bill is specifically aimed at helping the job creators,” says Tomasky. “The total cost is $255 billion.” In other words, the Party that endorses the “Job Creators” in this country wants to hurt job creation.
Republicans … say (as they say of everything) that [the payroll tax cut] hasn’t done any good. But economists attest to its stimulative value. Two economists at the Economic Policy Institute say ending the holiday would reduce GDP by $128 billion and cost 972,000 jobs in 2012. The EPI is a liberal outfit, but Mark Zandi of Moody’s, who advised John McCain in 2008, agrees that raising the payroll tax back to where it was could cause another recession.
This convoluted stand by the GOP leadership isn’t so difficult to understand when you look at it from the eyes of Senate minority leader Mitch McConnell who informed the American public last year that “the single most important thing [Republicans] want to achieve is for President Obama to be a one-term president.” This apparently entails sabotaging anything that improves the economy during this period leading up to the 2012 elections. Right now the Republicans are focused on distorting the reality that put us in this economic mess in the first place by accusing Obama of failing to have fixed what almost single-handedly their Party screwed up.
The train wreck that turned into the worst economic recession since 1929 was the result of failed GOP policies to regulate non-banking financial markets that allowed wide-spread corruption with home mortgage loans even when they were warned by the FBI back in 2004. The nation’s top law agency informed Congress then that events within that industry were posing a threat that could exceed the devastation of the Savings & Loan scandal during Ronald Reagan’s presidency.
They have neatly side-stepped their complicity in this while fabricating scenarios that hold Obama and the Democrats fully accountable for everything that has gone wrong since late 2007. And since winning back the House in 2010 they have done everything they can to undo what Obama has achieved to slow the economic downward spiral while passing legislation that would pretty much reinstate conditions similar to what we had just prior to our economic collapse. Their biggest fear is that strong signs of economic recovery will develop from the Obama administration’s efforts. This would destroy the image they have created and ruin their chances to not only win re-election for themselves but to regain control of the Senate and the White House.
The payroll tax is essential to maintain funds needed for the entitlement programs, like Social Security. Reducing that tax would have removed needed funds to sustain this program but the greater need to provide financial relief for many working Americans had priority with the President and the Democrats. To compensate for the reduction in contributions, arrangements were made to resupply the Social Security trust fund out of the general fund. The Social Security trust fund you may recall has been routinely depleted by Congress to pay other federal expenditures then handing the trust fund IOUs in the form of government treasury bonds, giving this secure fund a bad image as a drain on the federal debt.
Naturally drawing money out of the general fund negatively impacted the federal deficit, that bugaboo that the chicken littles on the right ignored during the Bush years but now think is critical to our very survival. The Tea Party contingent that took over the GOP last year threatened to shut down the government if spending cuts weren’t initiated to prevent what they foolishly thought would increase the deficit by raising the debt ceiling. Obama has addressed the concern with raising the deficit however by requesting that the lost revenue that will occur if we extend the payroll tax cut be taken from those who live way beyond normal means now – the 3.5% surtax on income amounts in excess of $1 million.
To gall of Republicans who seek to eliminate hundreds of dollars from workers paychecks annually while killing a great opportunity to create more jobs is shocking. To them it is more important that millionaires not suffer the small hit on their taxes from income over $1 million. The vast number of American working families must continue to struggle so the wealthiest amongst us can continue their lavish life styles simply because one Party has signed over their good judgment to the threats of one man’s campaign to shrink government small enough to drown in a bath tub – Grover Norquist
Could it be any clearer where the hearts and minds of the GOP rest? When called to sacrifice for the improvement of our overall economy, Republicans are clearly on the side of that small segment who have vastly profited during this economic crisis as they were bailed out of their own failures on our dime.