Sometimes the truth is the gorilla in the room that people don’t see. In the Congressional debate over the debt ceiling, as Republicans refuse to raise taxes on the upper 2 percent, the gorilla looms very large.
The Congressional Budget Office estimates the cost of extending the Bush tax cuts for 10 years at $3.3 trillion. The (nonpartisan) Congressional Research Service estimates it at $3.5 trillion. It’s important not to overtax the rich, say the Republicans, because those are the people who create jobs. If we want to bring down the unemployment rate, we have to coddle those people.
In theory, you could argue this question all day. In reality, the answer, like the gorilla, is right in front of us all, including the Republicans.
The answer is that the richest, who have enjoyed a 10-year tax holiday from the rate they paid during the Clinton administration, are not creating jobs, at least not in the U.S. We know they aren’t, because the jobs are not here. During the years since Bush 2 cut tax rates for the top layer, the loss of jobs has been catastrophic. That’s not to say the tax cuts caused the job losses, but the cuts haven’t helped the situation.
And according to Princeton economist Alan Blinder, the money the tax cuts represent would increase the Gross Domestic Product by 1.6 percent if it went for food stamps or unemployment benefits, but in the hands of the superrich, it only boosts the GDP by .35 percent.
The proposed return to the Clinton-era rate of tax on the wealthy, from 35 back to 39.6 percent, is a rise of only 4.6 percent. No one is suggesting that the richest pay the 70 percent they paid from 1964 until 1981, or even the 50 percent they paid under Reagan.
But to hear the hue and cry from the GOP, you’d think they were facing a hike to the 91 percent they paid during World War II and until 1964 (during which time, let it be noted, the economy grew like mushrooms after rain).
Polls have shown that the public favors taxing the rich to reduce the deficit, but politicians don’t have to listen to polls, because polls don’t necessarily prove that their own constituents—the ones who can vote them out of office—favor or condemn a certain measure.
But the people could pick up their phones and throw a scare into those who claim to represent them, as they did when an investment arm of the government of the United Arab Emirates was about to buy 16 of our ports. When they’re riled up, the voters can still outshout the donors.
