Front Street

Thursday, December 09, 2010

By Gigi

I believe that the Republicans hate poor people. I believe that to the bottom of my core. Leona Helmsley, a billionaire once stated when she was indicted for tax evasion in the 1980’s, that “only the little people pay taxes”, and she was so right!!!! The tax deal President Obama struck with Washington’s muscle-flexing Republicans leaves a whole lot to be desired…in fact, it stinks!!! The arrangement leaves a country weathering 9.8% unemployment, essentially where it was before the GOP worked its will—only worse off, because the taxing and spending plan added only, oh, $900 billion to the deficit; which is an additional $900 billion the U.S. will have to borrow. Here’s the sorry scorecard: The Bush-era tax cuts expire December 31. President Obama wanted to extend them for everyone except for couples earning more than $250,000 a year and the very wealthy. The revenue would have markedly improved the nation’s balance sheet, but the GOP refused to let the cuts lapse especially for people earning more than a million dollars per annum. The result is that wealthy Americans keep their unjustified breaks and the economy gets no new stimulation.

So, to soften the blow, President Obama won an extension of benefits for the long-term unemployed and secured a 2% point reduction in the taxes wage earners pay to support Social Security. President Obama, forced to defend the deal, calls it, “real money for real people that will make a real difference in their lives of the folks who sent us here.” But since the breaks will largely replace a different, expiring middle-income tax break, the maneuver will have little stimulative impact.

The Republicans insistence on maintaining the Bush breaks at the top—plus an unconscionable reduction in the estate tax, threw the United States further into an ever-deepening hole. Nice work by a party that postures as a paragon of fiscal discipline and frugality.