Republicans’ new pledge to filibuster and block any and all legislation in the Senate unless Democrats submit to extending the Bush-era tax cuts for the richest 2 percent of Americans — half of whom make over $8 million a year — is the clearest sign yet about where Republicans’ loyalty really lies. Why Americans would tolerate that, and why Democrats won’t fight over that line in the sand, boggles the mind.
Democrats long ago agreed to extend the Bush-era tax cuts for the 98 percent of American households with incomes of less than $250,000 a year. There’s no fight about tax cuts for households with incomes below the $250,000 household threshold.
Rather, the fight is about the wisdom, fairness and economic logic of extending the high-end Bush tax cuts, which grossly favored America’s ultra-wealthy in the first place, when a host of more pressing needs confront the country.
The top two needs alone suffice: Unemployment benefits are expiring for 2 million Americans who need immediate help just to survive foreclosures and economic disaster. Working down the $14 trillion debt mainly accumulated by the last three Republican presidents is the next budget priority.
The tax cuts for the top 2 percent would cost roughly $700 billion over the next 10 years, mainly because the top 1 percent of earners already possess a staggering 24 percent of the nation’s wealth, a record for contemporary times.
The richest 0.1 percent of the top 1 percent, for example, have an average annual income of more than $28 million. By extending the Bush tax cuts of 2001 and 2003 (larded with lucrative tax breaks on capital gains and dividends), Republicans would give households in the richest 0.1 percent bracket an average tax cut of $370,000 apiece annually.
The ultra-rich don’t need that tax cut. It was never fair in the first place, and they sure are not likely to spend more than they already spend on their yachts, jets and multiple homes. None of their spending, moreover, has helped the country avoid the economic doldrums of the past decade, or the declining wages (adjusted for inflation) of the working class.
President Obama and Democrats should take the Republican threat to shut down legislation until the top 2 percent tax cut is extended for what is: a slap at ordinary Americans and the nation’s best interests, and grounds for real fight.