Wisconsin Congressman Paul Ryan said today that his party will seek to end the payroll tax cut for Middle Class Americans, those earning less than $106,000 per year, while keeping the Bush Tax cut in place for those earning more than $250,000.
Beyond the obvious issue of equity and fairness, his reasoning and that of his party is nonsensical. The Bush Tax cuts have been in force for a decade and more now. Yet we are mired in the worst depression the nation has experienced since the Great Depression of the 1930’s.
More to the point, the most wealthy Americans ten-year tax holiday has not put a dent in the 9.1% national unemployment rate. Republican leaders in Congress have trumpeted the work of “Job Creators” these very people who have had this tax break.
It is Republican House Majority Leader John Boehner after all who constantly says “Where are the jobs?”
Ryan’s argument is that the payroll tax cut middle class Americans have enjoyed the past several years must be ended because “it has not worked.” When did people earning less than $106,000 a year become the primary employers of the nation? It is not the job of the average working class American to create jobs.
Logic requires that Ryan and his party either argue that both tax cuts be continued indefinitely, or that both be ended. But the fight to the death to advantage upper income Americans who earn more than the other 98 percent of us while being so indifferent to the masses of Americans, defies logic unless you subscribe to one simple explanation for the deficiency:
The Republican Party of the United States has as its main purpose the support and enrichment of the wealthiest Americans and large corporations. That is the only logical thing about Ryan’s stand and what appears to be the emerging Republican Party stand on this question.
The average middle class voter earning well less than $250,000 a year has no business supporting the Republican Party if they are the least bit concerned about their own economic security and well-being. If they do under such circumstances they reveal themselves to be lacking the human intelligence that has been provided them. Voting against your own basic self-interest can be justified if you place the welfare of others, in this case the upper two percent of income earners, ahead of your own.
The Democrats pursuit of an end to the Bush Tax Cuts for those earning $250,000 and more applies to the upper two percent of the American population. This move on the part of Democrats was and remains aimed at cutting the budget deficit by $722 billion over the next ten years. The tax increase involved takes taxes upward for two of every one hundred of us to levels seen during the Clinton Years, themselves lower than the Reagan years.
A room with a hundred Americans reperesenting all of us would find that this move would raise taxes on two of us in the room and the nother nintey eight would not be adversly affected. Strangely, all Americans act as if they too earn what only the top two percent earn and more. That too is at odds with logical reasoning.
But there is much more to this economic battle between Democrats and Republicans in the fast approaching election season.
Struggles for Justice believes that the Grover Norquist Philosophy accepted and signed on to by Ryan and so many Republicans to never raise taxes must apply to all income groups and not just the rich. The pledge makes no such distinction. The decision of Republicans to champion cuts for the wealthy and not the Middle Class is a fundamental betrayal of principle, revealing them to be the worst sort of hypocrites.
More than a two thirds super-majority of American citizens believe that the American economy is not performing adequately to ensure the economic security and general welfare of the people of the United States at present. You’d be hard pressed to get a poll showing a majority of our citizens think the nation and its economy are on the right track.
9.1% unemployment is really a fairly low rate of unemployment. But when those who have quit working or who have accepted low-wage part-time employment are added you get a real unemployment rate of over sixteen percent.
While large multinational corporations can earn huge profits in even this depressed economy by taking jobs and selling goods and services in other nations around the world, Americans living here have no such flexibility other than to move and emigrate elsewhere themselves.
But the performance of the New York Stock Exchange and other world exchanges suggests an economic malaise that is spreading worldwide. China’s amazing economic boom and growth is stagnating. Greece is narrowly avoiding default. A major European bank is near bankruptcy itself. While some weeks provide us rising stock prices reflecting stability and hope for near-term economic growth, the trend is decidedly bearish and not bullish.
Small business people need customers. For that matter so do the largest corporations. To have customers people need the buying power and confidence to make purchases of goods and services. Even Reagan Era conservative economists agree that this demand side of the American economy is seriously in jeopardy and underperforming. Any business with fewer customers would be foolhardy to hire more workers to do work that is not at present needed and is not likely to be.
Ryan and the Republicans would have a much more effective argument to make if they backed maintaining tax cuts for everyone in this badly depressed, and low economic activity environment. But they do not. They only back tax cuts for the wealthy.
If ninety-eight percent of Americans have less money to spend in the private sector it will simply not be spent. It defies all logic to pursue tax increases for Middle Class Americans in such a situation.
Demand in this economy must be increased. The surest way to do that is via having consumers with as much disposable income to spend as possible. Raising taxes on the majority of us is not going to do that.
The other part of the demand and the job creation equation is actually creating customers where none at present exist. Government can do this very well. President Obama’s American Jobs Act does this directly by spending billions on truly needed infrastructure improvements that would hire construction companies and millions of workers now underemployed or not employed at all to do the work that is needed. They in turn will have money to spend as customers themselves. That in turn will create more jobs as economic activity increases.
The old Keynesian approach to spur a private economy where private firms cannot or will not do it still will work. In fact, the hated “Stimulus Package” of the first year of the Obama Administration actually did work. Factually, the nation was in an economic free fall. Hundreds of thousands of jobs were being lost every single month in the closing months of the Bush Administration and the opening months of the Obama Administration.
According to the Congressional Budget Office, a non-partisan fact-finding organization created to inform Congress, and to nearly all reputable economists, the Obama led $800 Billion Stimulus Package actually did create jobs. Governor Rick Perry’s assertion that zero jobs were created is downright goofy.
A better assessment would be to say that many more jobs were needed and are needed and have yet to be created. The CBO tells us that 2.9 million jobs were created by the policy initiated by the Obama Administration. Any look at the charts you might create concerning employment and job creation shows clearly that the rate of decline in employment was stopped in its tracks; that a net plus of jobs was created and has been maintained in all but a couple of months since.
The problem of course is that tens of thousands of new jobs or even a hundred thousand new jobs are not sufficient to stay ahead of new workers entering the labor force. It would seem creating new jobs in larger numbers, and making sure that they are American jobs is most needed.
And it would be logical for low-tax Republicans to maintain that tax breaks for every American are in principle right and correct. But they argue only for a select upper two percent of us to get these advantages. You must be wealthy or a large corporation to obtain them. They signed pledges to never increase taxes ever. Now Paul Ryan in speaking for his party says they will do it on the masses of Americans hardest hit since 2008. And Michelle Bachmann a candidate for the nation’s highest office wants taxes to be raised from the poorest Americans at the bottom of the economic ladder; she too excludes the most fortunate Americans from any sacrifice.
Logic and being a Republican are much like the collision of matter and anti-matter. They are decidedly at odds and it is time for Americans to wake up to this plain, bald, fact and act appropriately on this information.