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Dirty Rotten Obfuscaters! | davelovell.net
Dec 012011
 

Obfus­ca­tion! Favored tool of those wield­ing power over us from behind the cur­tain.  They who con­vince us that lib­er­als are weak-spined Fran­cophiles, or that they can pay-off the debt by low­er­ing our taxes. They play Three-Card Monte with our atten­tion spans while they sys­tem­at­i­cally dis­man­tle the remains of our Repub­lic.  But on rare occa­sions a Con­gres­sional vote approaches that is impos­si­ble to cloak – and if we pay even a tee­nie bit of atten­tion, we will see who cares about us (99%) and who cares about them (1%).

Such will be the case later this week when the Sen­ate tries to vote on extend­ing the payroll-tax hol­i­day. The Repub­li­cans will oppose it—that is to say, the Repub­li­cans will sup­port a tax increase on work­ing Amer­i­cans. And why? Because the Democ­rats want to pay for it with a small sur­tax on the very top earn­ers. So the choice couldn’t be more direct: which is more impor­tant, giv­ing the mid­dle class a tax cut or pro­tect­ing those who make more than $1 mil­lion a year? Repub­li­cans are mak­ing it clear. This vote alone should destroy them.

The facts: The Social Secu­rity pay­roll tax comes to 12.4 per­cent of an employee’s salary—employers and employ­ees each pay 6.2 per­cent. The money goes into the Social Secu­rity Trust Fund and finances ben­e­fits. At the end of last year, the Obama admin­is­tra­tion, in exchange for tem­porar­ily extend­ing the Bush tax rates on all income lev­els, got Con­gress to agree to a one-year 2 per­cent payroll-tax hol­i­day for employ­ees, down to 4.2 per­cent. For a $50,000 earner, that meant pay­ing $1,000 a year less in pay­roll taxes. It was agreed in that law that the hol­i­day would cost the Social Secu­rity Trust Fund nothing—the depleted rev­enue would be replaced out of the gen­eral trea­sury. So the hol­i­day adds to the gen­eral deficit but does not affect the trust fund.

The cut proved pop­u­lar, or is pre­sumed to be pop­u­lar, so now, as many peo­ple pre­dicted last year, Con­gress wants to extend it. Repub­li­cans of course say (as they say of every­thing) that it 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.

And besides those macro­eco­nomic con­cerns, there is the sim­ple ques­tion of money in people’s pock­ets as they try to tough out the econ­omy. A thou­sand dol­lars to a $50,000 earner, or $1,500 to a $75,000 earner, isn’t nothing.

What the Sen­ate Democ­rats want to do now is this. They want to increase the employee’s reduc­tion from 2 per­cent to 3.1 per­cent (that is, to cut it in half from the nor­mal 6.2 per­cent rate). And they now want, for the first time, to extend the hol­i­day to employ­ers as well. This is impor­tant, and it prob­a­bly won’t be well explained in very many places. But the Democ­rats would have employ­ers pay 3.1 per­cent (rather than the 6.2 per­cent they now pay) on the first $5 mil­lion of their pay­roll. Also, if employ­ers add to their pay­rolls, they would pay no pay­roll tax on new hires. So the new bill is specif­i­cally aimed at help­ing the job cre­ators. The total cost is $255 billion.

The Democ­rats want to pay for it with a 3.5 per­cent sur­tax on dol­lars earned over $1 mil­lion per year. In other words, if some­one earns $1.3 mil­lion a year, she will pay the extra 3.5 per­cent only on the last $300,000 in earn­ings; that is, an extra $10,500 a year (bear in mind that this per­son takes home, after taxes, around $30,000 every two weeks). So it cer­tainly raises the taxes of the very wealth­i­est. But it gives more money back to middle-class peo­ple, and it stim­u­lates the econ­omy, per­haps to the tune of 50,000 jobs a month, maybe even more.

Mitch McConnell unsur­pris­ingly announced his oppo­si­tion to it Mon­day. And yes, this is the same Mitch McConnell who said in Jan­u­ary 2009 that a two-year sus­pen­sion of the pay­roll tax “would put a lot of money back in the hands of busi­nesses and in the hands of indi­vid­u­als,” and that “Repub­li­cans, gen­er­ally speak­ing, from Maine to Mis­sis­sippi, like tax relief.”

Well, that was then. Now three things have changed. One, the idea was a Repub­li­can one back then; now it’s a Kenyan one. That alone is enough to make it poi­son to them. Two, extend­ing the hol­i­day will help the econ­omy at a moment when Repub­li­cans are now very clearly try­ing to hurt the econ­omy. This is not even a con­tro­ver­sial thing to say any­more, it’s so obvi­ous. And three, now there’s a price tag on it; it has to be paid for in some way, and that way is a sur­tax on super-high incomes. And this above all is what the GOP can­not accept. These are the mak­ers, not the tak­ers, in Paul Ryan’s obscene for­mu­la­tion.

It’s sick­en­ing to watch them lie about this one. Ari­zona Sen. Jon Kyl hit two major talk­ing points on TV over the week­end:

The prob­lem here is that the pay­roll tax doesn’t go into gen­eral rev­enue, it sup­ports Social Secu­rity. And you can’t keep extend­ing the payroll-tax hol­i­day and have a secure Social Secu­rity. That’s the first problem …

By tax­ing the peo­ple who pro­vide the jobs, you put off the day we have eco­nomic recov­ery and job cre­ation in this coun­try. And that’s pre­cisely what the Demo­c­ra­tic plan would do. It would hit those peo­ple, the small busi­nesses who we all acknowl­edge are the ones who cre­ate the jobs com­ing out of eco­nomic difficulty.

Both state­ments are lies. The first is another one of those not-intended-to-be-factual state­ments for which he is renowned. The Social Secu­rity Trust Fund is not affected by the new pro­posal any more than it was for the orig­i­nal one-year hol­i­day last year. The sec­ond state­ment is the usual GOP talk­ing point on this—we’re pro­tect­ing small businesses—but it’s espe­cially lame in the con­text of this pro­posal. Don’t most small busi­nesses have pay­rolls under $5 mil­lion? Of course they do. Those employ­ers will directly ben­e­fit from this law. And busi­nesses large or small will pay noth­ing on new hires.

How a party can so nakedly rep­re­sent only the top 1 per­cent while at the same time try­ing to stop any­thing that will help the econ­omy, and sur­vive while doing it, is beyond me.

So the bill will cut taxes on middle-income peo­ple and on small employ­ers. And it won’t get a sin­gle Repub­li­can vote. Maybe one—Scott Brown might have to back it. But they will block this. They will hope instead that Harry Reid even­tu­ally (before the end of the year) per­mits a one-year exten­sion at the cur­rent 2 per­cent rate that is paid for out of the gen­eral trea­sury. In which case the GOP will be vot­ing to increase the deficit! Yep, the deficit-hawk party would sooner add a cou­ple of hun­dred bil­lion to the deficit than impose a sur­tax on peo­ple who make more than $1 mil­lion a year. Yes, really.

This is the most ran­cid dis­play yet on the GOP’s part. And I think you’ll agree there is no lack of com­pe­ti­tion for that man­tle. Hav­ing the stones to cam­paign against Obama’s “Medicare cuts” in 2010 when all they want to do is cut Medicare was up there, but this is even worse. 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. Obama should give an Oval Office speech Wednes­day night and say: “If you are an employee and make less than $1 mil­lion, or if you are an employer of any size, I am try­ing to give you a tax cut. If you are an employee who makes more than $1 mil­lion a year, you should write and thank your Repub­li­can sen­a­tor, because the Repub­li­cans are block­ing me and help­ing you.”

Bon chance, mon ami!

 

 Posted by at 11:03 am

  One Response to “Dirty Rotten Obfuscaters!”

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