In my previous diary, "Taxes in fantasy land", I combined a Rachel Maddow segment on the fantasy bubble of rightwing media with conservative-reported snapshot story about Tea Party fantasy beliefs about taxes and the size of government. But later in her show last night, Rachel herself took on the topic of rightwing tax fantasies as a direct challenge to the main$tream media:
I am convinced this is a test. This is of test of whether we as a country can communicate rational around factual information. With all of the resources we devote to covering politics and with everything we spend purportedly to try to understand what's going on in Washington politics, can we explain and understand that the first thing being proposed by the new Republican majority in Washington is that we should tackle heart disease by cooking up a passel of deep fried cheese? That we should tackle the deficit by adding $700 billion to the deficit? That is what they want to do first thing.
Of course, this is a test that the M$M has been failing for 30 years now. That's how long the GOP has been arguing--based on the cartoonish "Laffer Curve"--that cutting taxes will reduce the deficit, with spectarularly failed results:
The media has accepted this absurdity, despite it's unbroken record of refutation by reality for thirty years now. Why should the media change now, just because Rachel Maddow points it out to them in single syllables? Does she really tink they have functioning brains? Apparently so:
This is empirical world. If you add $700 billion to the deficit to pay for rich people, you've added $700 billion to that deficit thing, which is not a way of making that deficit thing smaller. Thing plus 700 billion does not equal smaller thing. The announced first major policy initiative of the new Republican House of Representatives is to add $700 billion to the deficit. By extending the Bush tax cuts for the richest people in the country. they are trying to get away with saying this will reduce the deficit, not increase it. They are not telling the truth. I think we are all capable of understanding that. I think even with the media we've got, we are capable of understanding that a fried cheese diet is not a heart healthy diet. Why is the White House signaling they might be willing to go along with the Republicans on this instead of killing the Republicans on this?
You know, mindless repetition of outright lies worked for the GOP. Could mindless repetition of the truth be an effective antidote?
So, let's see: letting the high-end tax cuts expire on schedule is good economics; picking a fight with Republicans over the issue appears, from all the polls, to be very good politics - and that's despite what has so far been an incredibly lame effort to explain the issues.
Besides, Democrats should be inclined to take risks in any case: if nothing shakes up the game, they lose the House and possibly the Senate, if they shake things up, they might hold on.
And yet, it's still not clear whether they'll force a vote on a middle-class-only tax break?
You really have to wonder about these people.
Particularly when one reads TPM's account of the meeting that Speaker Pelosi held yesterday:
Pelosi Implores Dems On Tax Cuts: 'Who Do You Stand With?'
Christina Bellantoni | September 14, 2010, 10:50PM
Speaker Nancy Pelosi tonight implored House Democrats in a private meeting to consider a pre-election vote on extending the Bush-era tax cuts for the middle class while letting those for the rich expire, framing the debate in partisan terms.
Rep. Sheila Jackson Lee told TPM after the caucus that Pelosi ended the meeting with a "resounding" and impassioned speech that fired up the Democrats and might even have brought more on board for a vote.
"She made it clear it's a black and white issue of who do you stand with," Lee told TPM. "It's the middle class and they need to know we are pushing for them. We have to say it over and over again. They've gotta see it, smell it, sense it, taste it."
Lee (D-TX) said that Democrats should be as consistent as President Obama has been, and attempt to define the Republicans as favoring the rich.
As we highlighted earlier, Democratic leaders were in temperature-taking mode tonight. They laid out several options for voting now, but tried to listen to members to get the discussion started since everyone had only been back in town for five hours.
Pollster Stan Greenberg also presented the caucus with some data showing the tax cuts issue helps energize the base, a stat members responded to well, a Democratic aide present during the meeting told TPM. The aide said some members suggested that tax cuts could be moved quickly, or that it wasn't an issue for them back home, but that most members were supportive of Pelosi's position.
TPM spoke with several Democratic members on background and they confirmed that there was not a clear consensus to emerge out of the meeting. Most said they think leadership will put forward a vote to extend the middle class tax cuts only, but perhaps allow for a procedural vote that would satisfy those members who want to at least be on the record for extending the cuts for every income bracket.
The most plausible explanation for all this is that Democrats are afraid that even the mere mention of taxes means their doom. As if the GOP won't mention taxes if the Dems don't pick a fight? What kind of crazy is that?
It's fear-based crazy, that's what. And since the GOP is the party of fear, as long as the Dems are coming from fear, they are playing on GOP's home turf, by the GOP's own rules. As I've been trying to explain recently, there's a very clear clash of civilizations going on here: A fear-based, top-down anti-modernist "civilization" (if you can call it that) vs. a reality-based, bottom-up modernist and post-modernists civilization. THe Dems have been scared out of their wits by the GOP, thus abandoning the civilization that they're supposed to be defending. Not all the Dems, mind you. But enough of them to cripple the party as a whole. And that's what we're seeing play out here. It's really just as simple as that.
"We have nothing to fear, but fear itself." -- Franklin Delano Roosevelt.
Last night on Olberman there was a quick flash of warring small-business factoids that were discussed somewhat more fully in an acticle Brad DeLong linked to last week: "Again with the Small Business Myth" by Edmund L. Andrews. To be honest, while helpful, I don't this piece quite lived up to its promise. But it does get things started:
Kevin Hasset and Alan Viard took another run at arguing that small business will be crippled if the Bush tax cuts expire for individuals earning above $200,000 and families with incomes above $250,000.
I've looked into this before, as have others, and the argument is thin. Hassett re-launches the Republican factoid that about half of all business income reported on individual returns goes to people in the top tax brackets. The counter-factoid is that 97 percent of people who report business on their personal returns don't make enough money to be affected by the higher rates.
Who's right? Democrats are on much more solid factual ground. But first, let's back off the romance about small buisiness a bit.
Unfortunately, he never does get back to discussing the solid factual ground. But he does demystify the romance a bit, and that's useful to take note of:
Small companies are a big part of the economy. They're also an important source of dynamism, if only because they start up and shut down so rapidly. But small business is also just a form of organization, not inherently better than big corporations. Think about it: is someone who makes $500,000 a year as the owner of a McDonald's franchise more vital to the economy than a senior VP at McDonald's who makes the same amount? And let's be honest: many small businesses are a lot worse than big corporations in how they treat their employeees.
In any case, what Republicans call "small business income" covers many things: income from limited partnerships (real estate, oil and gas or a chain of fast-food franchises); earnings from professional corporations for doctors, dentists and lawyers; income from trusts; rental income from vacation homes and commercial real estate. These aren't necessarily family businesses or risk-taking entrepreneurs. A lof of these taxpayers are simply high-income professionals or very wealthy people who earn streams of income from many different investments. There's nothing wrong with those people, but nothing particularly sacred about them either.
Okay, so with that in mind, let's just take a hard look at the basic numbers. According to what we know, taking both factoids at face value, and recognizing that a disproportionate number of the high-income "small businesses" are "high-income professionals or very wealthy people who earn streams of income from many different investments", here's a quick-and-dirty table of who the upper-income tax cuts will benefit:
Upper Income Tax Benefit Distribution
Category of people % Benefited % Not Benefited
All Taxpayers: ~2% ~98%
"Small-business Owners": ~3% ~97%
"Classic" Small-business Owners: <3% >97%
Looked at this way, there's pretty much nothing special about small-business owners so far as high-income tax cuts are concerned. One might as well argue that we shouldn't cut the upper-income tax cuts, because of the devastasting impact on people with blonde hair or blue eyes:
Hypothetical Upper Income Tax Benefit Distribution
Category of people % Benefited % Not Benefited
All Taxpayers: ~2% ~98%
Blue-eyed Taxpayers: ~2.5% ~97.5%
Blonde Taxpayers: ~3% >97%
Take away the Norman Rockwell connotations, and the argument about small-business owners is equally vacuous and absurd.
With more and more Beltway types predicting that Dems may put off the vote over the Bush tax cuts until after the election, I thought it would be useful to pull together all the polling that shows this is an argument Dems have a rather good shot at, you know, winning if they decide to go for it.
Polls cited:
National Journal: 56% support ending all the Bush tax cuts or just those for the wealthy.
Gallup: 59% support ending all the Bush tax cuts or just those for the wealthy.
CNN: 51% supports ending tax cuts for the wealthy; another 18 percent favor ending them all.
CBS: 56% supports ending tax cuts for the wealthy.
Newsweek: 52% supports ending tax cuts for the wealthy.
After which he says:
Yet for all this polling, there are increasing signs that some Dems are not gung-ho for this fight. As best as I can tell, the worry is that if Republicans hammer marginal Dems for favoring a tax hike in the middle of a bad economy, Dems will not be able to cut through the noise and get across the point that the Obama proposal only ends the tax cuts for the rich, while extending them for everyone else....
But here's the point: Amid a sea of bad polling news, here is an issue where the public is clearly on Dems' side. And the above polling suggests that the public already has a pretty firm grasp on the "nuance" of this debate. This, of all things, is not an issue where Dems should conclude in advance -- as they often do -- that once Republicans go on the attack, it's game over and Dems can't possibly win the argument.
I think Gregg is missing the reason the Democrats are doing this. It's not that they think the people are against it. They see the numbers. They are afraid of even having a conversation in which the subject is raised. The logic is that if the word "taxes" even come up in the debate at all, Democrats will lose.
This is, by the way, the same logic that took the death penalty and gun control permanently off the agenda. It's what they would like to do with abortion rights as well and are making great strides in doing. Except on the margins, national security is run by bipartisan consensus.
I don't think Greg misunderstands. I think he's doing his level best to help counter the very fear that digby points to. "Don't worry," Greg is saying, "The word 'taxes' isn't toxic. You can say it, and yet still live."
This is the most fact of politics in our time: the basis of conservative politics is fear. The basis of liberal politics is reason. The conservative try to flood the zone with fear, so that people can't think straight. Hence, when all else failed and they failed to defeat Truman in 1948, they turned to blind unreasoning fear with McCarthyism in the 1950 midterms.
That didn't kill support for the New Deal, but it did create an opening, and the GOP briefly gained power in the Congress along with electing Eisenhower in 1952. Then, a decade later, when the Dems aligned nationally with Civil Rights, the GOP had a permanent fear-button to push, and they've never stopped using it ever since.
The issues digby cites are more recent examples, but they are all part of the same pattern. If the GOP can turn anything into a flashpoint of fear, then they can keep on repeating it, and all thought shuts down--perhaps not for everyone, but for enough. But for them to be really secure, they need the Democrats to buy into their logic as well. Once the Democrats are gripped with fear, and unwilling to talk about a given issue, then that issue belongs to the GOP. Their position on it doesn't have to make any sense. Making sense is beside the point. The point is scaring people. The point is, in a word, terrorism.
Last month, the Center on Budget and Policy Priorities report "What the 2010 Trustees' Report Shows about Social Security " by Kathy Ruffing and Paul N. Van de Water contained this graph:
along with the admonition that "Members of Congress cannot simultaneously claim that the tax cuts for people at the top are affordable while the Social Security shortfall constitutes a dire fiscal threat."
Naturally, Versailles has done its level best to ignore this. But the few conservatives who have none-the-less stumbled across it have all had their heads explode. Trying to put them back together again has been a rather humorous silent-movie sort of affair, but Brad Delong somehow misses the humour as he wails Did Megan McArdle Really Graduate from a Business School?:
It's from a mid-August report by the Center on Budget and Policy Priorities "High-Income People Would Benefit Significantly From Extension of 'Middle-Class' Tax Cuts", by Chuck Marr and Gillian Brunet. Along with a segment on Democracy Now! this morning with David Cay Johnston, it sheds significant light on just how deeply conservative the entire discussion of taxes specifically and the economy generally remains. In turn, this is but another indication of just how far Obama is from having brought about any significant movement toward a progressive reframing of issues. (On another topic, last night, Megan McCain criticized his similar failure to lead on gay issues on the Rachel Maddow Show--not just gay marriage, but even DADT. And Democracy Now! also had a segment on his doubling down in support of protecting Bush-era torturers & the exapansion of the "state secrets" doctrine, so there's an unmistakable pattern here.)
As the CBPP report explains:
A fact generally overlooked in the debate over whether Congress should extend the high-income Bush tax cuts - i.e. those targeted exclusively at couples making over $250,000 and single individuals making over $200,000 - is that these households will still receive substantial tax cuts if Congress extends the so-called "middle-class" Bush tax cuts while letting the high-income tax cuts expire as scheduled.
This is because the 2001 tax law's reductions in the lower tax brackets benefit not only people whose incomes fall within the lower brackets but also those whose incomes exceed those brackets. In fact, high-income people actually receive much larger benefits in dollar terms from the so-called "middle-class tax cuts" than middle-class people do.[1]
Specifically, recent estimates from the Joint Committee on Taxation show that extending just the middle-class tax cuts would provide more than $6,300 in tax cuts to households with incomes above $200,000, on average, compared to $1,132 in tax cuts for households with incomes between $50,000 and $75,000. The Joint Tax Committee estimates show:
Households with incomes exceeding $1 million will receive an average tax cut of $6,349 in 2011 if the middle-class tax cuts are extended while the high-income tax cuts are allowed to expire. (They will receive an average tax cut of nearly $104,000 if the high-income tax cuts are extended as well.)
The story is similar, if not quite as dramatic, for households that make between $500,000 and $1 million. They will receive an average tax cut of $6,701 if the middle-class tax cuts are excluded (and of $17,467 if the high-income tax cuts are also extended).
For all other income categories, by contrast, the size of the tax cuts are about the same whether the high-income tax cuts are extended or not. Even for households with incomes between $200,000 and $500,000, the effects are similar. The Joint Tax Committee figures show that they would receive an average tax cut of $6,743 if only the middle-class tax cuts are extended, and of $7,152 if the high-income tax cuts are extended, as well.
But it gets significantly worse:
The middle-class tax-cut package the Joint Tax Committee analyzed does not extend the reduction in the tax rate on dividends for couples with incomes over $250,000 (and singles over $200,000). President Obama has proposed, however, that the dividend top rate for high-income people be permanently set at 20 percent, rather than being allowed to return to its pre-2001 level of 39.6 percent. If Congress follows that approach and incorporates this proposal into a middle-class tax-cut package, the average tax cut that high-income households will receive from enactment of such a package will be considerably larger than the figures just cited, and the dollar amount by which the average tax cut going to high-income households exceeds the average tax cut for middle-income households will be significantly larger, as well.
Now let's turn to Democracy Now! and see how David Cay Johnston frames things very differently than you'll normally hear it framed. Johnson, by the way, considers himself a libertarian, but in the old-school sense of not cottoning much to state-created & supported private fortunes. Here's how the interview starts:
The day was Sunday, August 1, 2010. Former Fed Chairman, Alan Greenspan appeared on Meet the Press. When asked to discuss the Congressional debate on tax cuts, the man known to move markets, a person who leans to the "Right," offered a decisive decree. In direct disagreement with Republican officials and the profitable corporations that fund countless political campaigns, Mister Greenspan declared, "Look, I'm very much in favor of tax cuts, but not with borrowed money. And the problem that we've gotten into in recent years is spending programs with borrowed money, tax cuts with borrowed money, and at the end of the day, that proves disastrous. And my view is I don't think we can play subtle policy here on it."
This statement was as a slap in the face to corporations, or more correctly to the tycoons who head these firms. Multi-millionaire media moguls might understand this best. These television and radio Executives experience firsthand that influence over an industry can translate into influence over an outcome. Cable News Network Chief Officers are among those who actively make use of this truth. Tax cuts expired? "Never;" say network Administrators and the newscasters such as Allan Chernoff, who do their bidding.
The same conservatives who spent the past year senselessly screaming about the U.S. budget deficit are now demanding an extension of the Bush tax cuts for the rich. The extension simply doesn't make sense, and the policies implied are a recipe for massive job loss in the middle of the worst employment crisis in 75 years.
Norm Coleman is at it again - attempting to smear his opponent for not paying taxes. The truth is, Al Franken overpayed his taxes.
What Norm Coleman does not want you to know is that he supported tax cuts for the wealthy, billions in hand outs for Big Oil, and his rubber-stamp support for Bush's failed economic policies that have put the entire economy in danger of collapse.
Norm Coleman - attacking Al Franken in order to hide his own dismal record.
