8 Reasons Why Obama Shouldn’t Extend Tax Cuts for the Wealthy – “Temporary” or Otherwise

[Time for change]

With all the recent brouhaha over whether or not the Huffington Post misinterpreted Obama advisor David Axelrod’s comments about extending the Bush tax cuts for the wealthy during their interview with him, something much more important is being lost sight of.

To briefly recap the controversy: On November 11th, HuffPo reported that Axelrod suggested during their interview with him that Obama would likely extend the Bush cuts for the wealthy. That interpretation was based on Axelrod’s saying that extending tax cuts for the middle class is both necessary and dependent upon extending the (much larger) tax cuts for the wealthy.

But then, later that same day, Axelrod and David Pfeiffer apparently disputed the HuffPo article, saying that “There is not one bit of news here” and “Nothing has changed”. At first it was difficult to understand how they could claim that “nothing has changed”.

The apparent contradiction was clarified at the G20 Conference in Seoul, in which Obama said, “I continue to believe that extending permanently the upper-income tax cuts would be a mistake and that we can't afford it". That statement relates back to a November 7 statement Obama made on “60 Minutes”, in which he said:

What I don't think makes sense is for us to borrow $700 billion to pay for that (extension of Bush tax cuts for the wealthy over ten years). And we don't have the money. I mean, everybody's already talking about our debt and our deficit. Why would we want to add to it? Now, having said all that . . .

Some people took that to mean that Obama would terminate the Bush tax cuts for the wealthy, which are due to expire at the end of this year. To be clear on this, these are the “temporary” Bush tax cuts for the wealthy that go back to 2001. But it now appears that, although Obama will not agree to a “permanent” extension of the Bush tax cuts for the wealthy, he is more than open to a “temporary” extension.

But what is meant by a “temporary” extension? These tax cuts went into effect nearly ten years ago. It has been estimated that even if they are allowed to expire at the end of this year they will have cost $2.48 trillion, with more than 52% of the benefits going to the wealthiest 5% of Americans. If Obama agrees to extend them for another two years it will cost more than another hundred billion dollars – and when will they end? They will end when some Democratic President or Congress comes up with the political will to get rid of them or let them expire. But if they aren’t willing to do that now, what reason is there to believe that they will let them expire two years from now? The most likely scenario would seem to be that they would continue to be extended time and again, perhaps until the Republicans win the presidency and decide to extend them another ten years or make them permanent. If Republicans now hold middle class tax cuts hostage to much larger tax cuts for the wealthy, why would that change in 2 years?


Some history on Obama’s pledge to discontinue the Bush tax cuts

Obama’s promise to reverse the Bush tax cuts on the rich was a major part of his Presidential campaign in 2008. Here is a typical statement he made on this issue:

The Bush tax cuts – people didn't need them, and they weren't even asking for them, and they ought to be relaxed so we can pay for universal health care and other initiatives.… We have to stop pretending that all cuts are equivalent or that all tax increases are the same…. At a time when ordinary families are feeling hit from all sides, the impulse to keep their taxes as low as possible is honorable. What is less honorable is the willingness of the rich to ride this anti-tax sentiment for their own purposes.

I and many others repeatedly used this as a selling point to convince moderates to vote for Obama.

Then, shortly after being elected president, Obama announced that he was considering allowing the Bush tax cuts to expire at the end of 2010 rather than make an active effort to get rid of them sooner. Then he proceeded to give up the idea of attempting to get rid of them before they expired. And now it appears that he’s ready to agree to have them extended on a “temporary” basis. Let’s consider some reasons why a “temporary” extension is a bad idea, other than that we have no idea how long “temporary” will be:


EIGHT REASONS WHY TAX CUTS FOR THE WEALTHY SHOULD BE TERMINATED NOW

# 1 – We need the money

Extending the tax cuts for the wealthy for even two years would cost about $160 billion over and above what it would cost to go with the middle class tax cut alone.

Obama’s campaign website contained numerous very impressive and much needed plans for strengthening our country, which most voters compared favorably with McCain’s plans. These included investments in education, investments in alternative energy development, making health care affordable for all Americans, protecting social security, strengthening our cities, and alleviating poverty.

When asked during the presidential campaign how he would pay for all his programs and provide tax relief for the working and middle class without adding substantially to our national debt, reversing the Bush tax cuts on the wealthy was always a major part of his response. When does he intend to do that?


# 2 – Extreme income and wealth inequality is bad for the economy

Income and wealth inequality have risen substantially since the “Reagan Revolution” beginning in the early ‘80s, and the rise was even steeper during the Bush administration. As of 2007, a study showed that more than a third of the wealth in the United States was held by the top 1% of households, while about 15% was held by the lower 80%. That means that the average top 1% household held almost 200 times as much wealth as the average lower 80% households.

What does this mean for our economy? Well, there was one other time in U.S. history when income inequality was almost as bad as it is now. That was the late 1920s, just prior to the Stock Market Crash of 1929 and the Great Depression. An article by Gabriel Thompson in The Nation contains a graph titled “Plutocracy Reborn – Re-creating the Gap that Gave us the Great Depression”. The article contains a chart that portrays the situation graphically, plotting over time the income ratio between the top 0.01% of U.S. families and the bottom 90%.



The ratio rose from about 250 at the start of the 1920s to a peak of about 900 by 1929. The ratio then plunged, and by the start of WW II it had declined to about 200, where it remained with some relatively minor ups and downs until the beginning of Ronald Reagan’s Presidency. It then began another precipitous climb, with a sharp decline beginning during the last year of Clinton’s Presidency, but then another sharp increase beginning at about the time that the Bush tax cuts for the wealthy first went into effect, so that by the end of 2006 we exceeded even the peak ratio of 1929 that preceded the Great Depression.

Why is extreme income inequality so bad for the economy? I have a rather simple-minded way of looking at it: When income and wealth inequality are extreme, it is almost as if the wealthy are living in a different economic universe than the vast majority of other people. They think nothing of spending vast sums of money that the rest of us will never see in a lifetime of work. Under such conditions, those who produce things – the housing industry, for example – have much more incentive to put all their efforts into producing things for the rich than for other people. Consequently, most other people tend to get priced out of the market.

Here’s a more sophisticated explanation, from FDR’s Chairman of the Federal Reserve, explaining the relationship between wealth inequality and the onset of the Great Depression:

As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth to provide men with buying power equal to the amount of goods and services offered by the nation's economic machinery. Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth…. By taking purchasing power out of the hands of mass consumers, the savers denied to themselves the kind of effective demand for their products that would justify a reinvestment of their capital accumulations in new plants. In consequence, as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out the game was stopped.

# 3 – Extreme income inequality is bad for democracy

The reason why extreme income inequality is bad for democracy shouldn’t be difficult to understand. Extreme wealth allows a small number of people to exert a very disproportionate influence on our elections and legislative process.

There are about 35,000 lobbyists in the United States. Corporations pay those lobbyists about $2 billion in salaries and spend another $8 billion to “influence” legislators to help to enact favorable legislation. In many if not most cases, the legislation in question, while benefiting the corporation, will do so at the expense of most everyone else.

Thus there has developed in the United States an unholy and symbiotic alliance between government and corporate power, whereby our government acts in behalf of corporate interests rather than in behalf of our interests, in return for the bribes that keep them in power.

Bill Moyers explains the situation in a straight forward manner. He made the following comments during a speaking tour titled “Saving Democracy”, in California in February 2006, and reprinted in his book, “Moyers on Democracy”:

This is a profound transformation in a country whose DNA contains the inherent promise of an equal opportunity at life, liberty, and the pursuit of happiness and whose collective memory resonates with the hallowed idea of government of the people, by the people, and for the people. The great progressive struggles in our history have been waged to make sure ordinary citizens, and not just the rich, share in the benefits of a free society. Yet as the public today supports such broad social goals as affordable medical coverage for all, decent wages for working people, safe working conditions, a secure retirement, and clean air and water, there is no government to deliver on those aspirations. Instead, our elections are bought out from under us… So powerfully has wealth shaped our political agenda that we cannot say America is working for all of America. In the words of Louis Brandeis, one of the greatest of our Supreme Court justices: “You can have wealth concentrated in the hands of a few or democracy, but you can’t have both.” Money is choking democracy to death.

Since the Telecommunications Act of 1996, increasing control over the news media has provided another powerful tool for a very small group of wealthy telecommunications owners and executives to exert highly disproportional control over the political process, by virtue of the slanted news they provide to the U.S. electorate. The utter failure of our corporate controlled news media to tell the American people the truth about the Bush administration lies that propelled us into an unnecessary and illegal war against Iraq is just one example of this.

Thus it is that we have a vicious cycle of increasing income inequality and declining democracy in our country. Extreme income inequality allows the rich to exert extraordinary influence over the legislative process and the news that we receive, which tilts our nation’s laws even further in their favor, which provides them with ever more money and opportunity to maintain control over our government.


# 4 – Extreme income inequality is bad for people

The effects of severe income inequality are not limited to economic consequences. Epidemiologists Richard Wilkinson and Kate Pickett demonstrate in their book, “The Spirit Level – Why Greater Equality Makes Societies Stronger”, numerous non-economic consequences of obscene income inequality that are independent of absolute income or wealth. These consequences include more mental illness, greater use of illegal drugs, higher imprisonment rate, higher infant mortality rate, more homicides, lower educational performance of our children, lower index of child well-being, lower trust in our fellow citizens, and lower status of women, among other adverse societal effects. Wilkinson and Pickett attribute much of this to the effects of the humiliation that many people feel when they see others around them who have much more status, wealth, and power than they do. This is especially applicable in a society in which wealth and status is considered by many to be a mark of one’s character.


# 5 – Extreme inequality is unfair

Conservatives defend economic inequality by arguing that it is fair to reward those who work the hardest, are the most productive, and who take the most risks. They say that these are the people who create wealth for everyone, so they ought to be rewarded for their hard work, productivity, and risk taking, which benefits everyone by making the whole economic pie bigger.

I most certainly agree that people ought to be rewarded for hard work and creating things that are of use for society. But where is the evidence that the rich (say, the top 1%) work 200 times harder, produce 200 times as much, or take 200 times as much risk as 90% of the rest of us? I’ve never seen such evidence, and it is inconceivable to me that it exists.


# 6 – There is no good reason to postpone reversing the Bush tax cuts on the rich

When Obama initially made the decision to allow the Bush tax cuts for the wealthy to expire at the end of 2010 rather than repeal them sooner, his primary excuse was that we were in a recession – the implication being that high taxes on the rich are bad for the economy during a recession. This message has been loudly proclaimed by our corporate news media as well. But there is no evidence for that claim. Again, let’s go back to the Great Depression of the 1930s to look at the evidence on this issue:

The top marginal tax rate stood at a meager 25% when FDR was inaugurated in 1933, during the height of the Great Depression. FDR progressively raised the top marginal tax rate, as can be seen in this graph, to 63% in 1932, to 79% in 1936, to 88% in 1942, and to 94% in 1944.

Did that destroy our economy? FDR took office in March 1933. You can see from the graph below that the steep slide in GDP was arrested in 1933, and began a steady rise in 1934, so that by 1940 it had nearly reached pre-Crash levels.



Consequently, following FDR’s huge tax increases on the rich, he won re-election in 1936 by a popular vote margin of 61% -36% and an electoral vote margin of 523-8.

The top marginal tax rate remained at 70% or more for several decades after FDR’s death – a period that Nobel Prize winning economist Paul Krugman describes as “the greatest sustained economic boom in U.S. history”. Then, in 1981 came the “Reagan Revolution”, large tax cuts for the rich, and increasing income inequality which accelerated to unprecedented levels during the Bush II administration.

It is also important to understand that we have seen a very strong inverse relationship in our country between top marginal tax rates and income inequality, as seen in this graph:



# 7 – Republicans will use Obama’s capitulation to further their far RW ideology

If Obama capitulates on this, Republicans will use it to further their myth/lie that tax cuts for the wealthy are needed in a recession. Why should a Democratic president accede to far right wing demands for which no evidence exists for their value? When they do that they send a message to the American people that those demands are reasonable and justified.


# 8 – Enabling poison pill politics

The crux of the situation is that we have two policies under consideration: One – tax cuts for the middle class – is highly popular with the American people. The other – much larger tax cuts for the wealthy – is not only highly unpopular, but it portends disaster for our country. I’ll refer to that policy as the “poison pill”. The Democrats have claimed support for the former. The Republicans also claim support for the former, but they insist on tying it to their poison pill. They use their poison pill as a form of blackmail, threatening that if Democrats don’t accept their poison pill they will kill legislation that is highly desired by the American people.

The majority of ideas proposed by Republicans have the purpose of further enriching the wealthy and powerful, at the expense of the vast majority of the American people. If Democrats allow themselves to be blackmailed into accepting these poison pills every time they propose much needed legislation for our country, there is no hope for us. Instead, the Democratic Party should propose needed legislation for our country without attached poison pills. Force the corporate owned Republican Party to show their hand. Give them the choice of either following through with their blackmail by killing popular and needed legislation, or accepting it. If they kill it, then they will have to be accountable to the American people for doing so.

The Democratic party should propose extending tax cuts for the middle class right now, while they still have majorities in both Houses of Congress and the presidency. It should be very easy. Republicans would have to filibuster that legislation in the Senate in order to kill it. But even if for some reason the Democratic Party isn’t able to do it this year, they can still do it after Republicans take over the House in 2011. Republicans would still have to withhold their support for that popular legislation in order to kill it. Let’s see whether they’re willing to risk the consequences.

Why should the Democratic Party allow them to destroy our country without a fight and without even making them show their hand? There are only two possible reasons for taking this course: Either they are in bed with the same elites that own the Republican Party, or they simply don’t have the courage that is needed to represent the people who elected them. That’s why they were roundly repudiated in the 2010 midterm elections. They’d better change course if they care anything about the people they were elected to serve.


A PETITION TO TELL CONGRESS NOT TO EXTEND THE BUSH TAX CUTS FOR THE WEALTHY

The Bush tax cuts, like the Iraq War, are one of the primary drivers of our large federal deficit. And like the Iraq War, the Bush tax cuts were sold to the public through outright deception.

The snake oil the Bush administration peddled was that the tax cuts, which overwhelmingly went to the rich and the ultra-rich, would spur the economy.
Now that we're facing the worst economic crisis since the Great Depression, many so-called "conservatives," joined with corporatist "moderates," are singing the same tune. They are demanding we extend the tax giveaways for the wealthy (set to expire at the end of the year) at a cost of $700 billion over the next decade.

Meanwhile, these same members of Congress are demanding deep cuts to the social safety net for the poor, the middle class, the unemployed and the elderly. There is very little that so clearly demonstrates the callous venality of some members of Congress…

Tax cuts for economic elites aren't free and they aren't effective. The government still needs revenue and giving away money to millionaires takes away from the money we can spend to help the victims of this economic downturn.

There is simply no excuse for Congress to plead poverty when it comes to helping those in need while literally giving it away to those who don't need it. Congress needs step up to the plate and make sure we don't continue one of the biggest economic injustices of the Bush era.

Tell Congress: Don't extend the Bush tax cuts for the wealthy. Click here to sign the petition.

[sasha031]

1. extending the cuts at this time, particular for the rich is suicide

[StandingInLeftField]

2. As usual, a very well-reasoned opinion.

K&R

:kick:
Bring Back Our Fighting Donkey

[spin]

3. I we want to reduce unemployment we need to resolve this tax issue quickly...

It probably doesn't matter much whether the tax cuts are extended or not, the important thing is that Congress needs to get off its big fat ass and make a decision.

Business will then know what the future holds and can begin making decisions on hiring or not hiring.

I fear this issue will drag out for another six months to a year.

[OlympicBrian]

10. What makes you think that US business hiring depends on...

What makes you think that US business hiring depends on whether the tax cuts are renewed? This appears to be a common, unsubstantiated myth. Is there a poll out there somewhere I missed? If so, link it in.

Looks to me the discussion and myth surrounding this one supposed sticking point is just another way to keep Americans away from focusing on both deeper and broader issues.

[spin]

12. If you read carefully you will see that I didn't say that the tax cuts ...

need to be renewed.

I said "It probably doesn't matter much whether the tax cuts are extended or not, the important thing is that Congress needs to get off its big fat ass and make a decision."

Businesses hate uncertainty. It's hard to plan for the future, and it's even harder when you have no idea what the future tax rates will be.

Obviously if the tax cuts are not renewed for the middle and lower classes (which is a possibility) many people will find themselves with less weekly income.

What happens on Jan. 1 if Congress does nothing?

Everyone's federal income and investment tax rates will go back up to where they were before the 2001 tax cuts were passed. In other words, your tax bill next year would increase.

If the tax cuts do expire and tax rates go up, you may notice the difference in your wallet as early as January, when your employer starts to withhold more taxes from your paycheck.

The Tax Policy Center estimates that a married couple with two kids under 13 and a household income of roughly $75,000 could end up paying about $2,600 more in federal income taxes next year than they would if the tax cuts were extended.

But the likelihood of all the tax cuts expiring isn't high, since both Democrats and Republicans agree on one thing: They want to extend the tax cuts at least for folks making less than $200,000 ($250,000 for joint filers).
http://money.cnn.com/2010/09/15/news/economy/bush_tax_cuts_faqs/index.htm

The increase may or may not make a significant difference but knowing what to expect helps to determine whether to hire and how many.

The current situation is like playing chess with a person who has half of his pieces hidden. You calmly wait until he decides to show you what you face.

[RUMMYisFROSTED]

4. One reason: Regressive

[kentuck]

5. Maybe the Democrats in the House or Senate will step up?

and oppose this?

[Time for change]

26. Pelosi already has -- That's a very good sign

[glitch]

6. K & R. Extending the tax cut for the wealthiest while simultaneously cutting social security

should be political suicide. Why are they willing to risk that? Has the system changed so radically that even considering allowing (let alone promoting) something this toxic is no longer dangerous to a politician's career?

[bigtree]

7. I don't see a thing here about the President's call for a *permanent* middle-class tax cut extension

PRESIDENT OBAMA: http://www.whitehouse.gov/blog/2010/11/12/president-obama-lays-out-his-priorities-tax-cuts

"My number-one priority is making sure that we make the middle-class tax cuts permanent, that we give certainty to the 98 percent of Americans who are affected by those tax breaks. I don’t want to see their income taxes spike up -- not only because they need relief after having gone through a horrendous recession, but also because it would be bad for the economy.

I continue to believe that extending permanently the upper-income tax cuts would be a mistake and that we can’t afford it. And my hope is, is that somewhere in between there we can find some sort of solution. But I’m not going to negotiate here in Seoul. My job is to negotiate back in Washington with Republican and Democratic leaders."


If the middle-class tax cuts were made permanent as part of a compromise to extend the Bush cuts temporarily, that should make them immune from being 'held hostage'.

you wrote:

"If Republicans now hold middle class tax cuts hostage to much larger tax cuts for the wealthy, why would that change in 2 years?"

How would they be able to hold a permanent extension of middle class tax cuts passed in the next Congress 'hostage' to a further extension of the tax cuts for the wealthy?

[Time for change]

9. A "compromise" to extend the Bush cuts "temporarily"

If Obama and the Democrats did that (which it looks like they will), I would see that (to keep with my analogy) as making a deal to release the hostages (the middle class tax cut) -- i.e. I would see that as giving in to the blackmailers. In other words, I would see that as allowing the Republicans to hold middle class tax cuts hostage to tax cuts for the wealthy -- until the blackmail (tax cuts for the wealthy) was paid.

I am not at all inclined to believe that "temporary" extension of tax cuts for the wealthy should be considered actually temporary. It's almost been 10 years now, Obama has repeatedly promised to repeal them, and he just comes up with one excuse after another to avoid doing it. What conceivable reason is there to believe that he will let them expire at any time during his presidency, after having borken his word on so many campaign promises?

[bigtree]

13. I don't think that 'promise' to end the tax cut for the wealthy is as politically consequential

. . . as his outright promise (he actually pledged this) to make certain middle-class taxes did not go up in his term.

If he does agree to a temporary extension of the TCFTR as part of a deal to get a permanent extension for middle-class tax cuts, he'll not be responsible if Congress somehow revives them later in some legislation (unless he's there to stand by and let it pass). There would be nothing to 'hold hostage' and the TCFTR would expire.

And, of course republicans are holding them hostage, but I'm not sure where you're coming from blaming the President for what republicans (or Democrats, for that matter) might do on taxes. He has his veto pen, but he'd be working against what he says is his 'number-one priority' of permanently maintaining the extension for the middle-class if he vetoes such a deal and allows them both to expire. He'll not have much leverage other than a veto that is likely to be overturned by the vast majority of legislators who will not allow taxes to be raised by their votes anytime soon.

He should keep his actual promise that he's made. I'm not sure delaying the part about ending the wealthy cut will be as politically damaging as allowing the middle-class tax burden to increase.

[Time for change]

14. Why I blame him

Repealing Bush's tax cuts for the rich was something that he repeatedly promised during his campaign. He didn't say he would let them expire in two years, he said he would repeal them. AND, for the reasons I discuss in this OP, it is very important that he do so. He has not done so, and as far as I can see he has no intention of doing so.

You say "I'm not sure delaying the part about ending the wealthy cut will be as politically damaging as allowing the middle-class tax burden to increase. I have three things to say to that:

1) I'm talking about more than "delaying" them. If he "delays" them for the 4 year term of his presidency, that is not delaying them, it is a broken promise period. He doesn't have all the time in the world to do this, and if he doesn't do it, it may never get done.

2) I'm not talking about what might be politically damaging. I realize that presidents must keep politics in mind. But they are also supposed to do what's right, and especially if they campaigned on doing so. As far as I can tell, Obama always does what he believes is politically expedient, and has never stuck his neck out to push for something important if there was any pressure not to do so from the right.

3) It isn't an either or choice. He can do both. He can simply ask Congress right now to put tax cuts for the middle class on the table, and let the Republicans either try to obstruct that or not. Then he can simply let the tax cuts for the rich expire at the end of this year.

[bigtree]

19. I don't think he has as much influence on what Congress 'puts on the table'

. . . as you may believe.

Political considerations about what the middle-class taxpayers might expect him to be true to isn't just some gamesmanship on his part. He says he believes 98% of Americans deserve those cuts and that it would be economically damaging to them to have those tax cuts expire. I don't know why that consideration should be seen as less sincere or consequential than other economic calculations.

Congress is going to act on the tax cuts. That's not something the President has much control over at all. It's not hard to envision this Senate (and even more, the next) holding up anything the lame-duck House manages to pass to advantage their TCFTW. It's also not hard to imagine enough Democrats in the Senate letting them. There are already a few on record in favor of some extension of the TCFTW.

Are you looking at some form of Reconciliation to advance a Democratic tax bill, like we did with the health legislation? I'm not sure how they get around republican objections as they try and advance their own middle-class tax bill. Can you map that out in a way that's politically realistic given the make-up of this Congress. I'm concerned that we're having this conversation using an unrealistic expectation that Congress is either going to allow itself to be led by the President on taxes, or that they're going to be resistant in any significant number to the extension of the tax cuts for the wealthy.

[Time for change]

20. I'm not advocating a reconciliation proces -- though that's a possibility too

All they have to do is pass a tax cut for the middle class NOW. The only way the Republicans can stop that is filibustering it in the Senate. I think that would be political suicide for them. Let's see if they're willing to do that.

That being done before the new Congress comes in, and the tax cuts for the rich having expired at the end of this year, it would be impossible for the Republicans to reinstate the tax cuts for the rich without substantial Democratic help.

We disagree about how much influence Obama could have with Democrats in Congress if he would try to exert some leadership. But the larger point is that he doesn't even try when it comes to anything that the PTB is against.

[TheKentuckian]

22. Dumb promise. His tax cuts were a waste and so are most of these as well.

Not only a waste but actively counter-productive.

We desperately need mammoth investment into this country's infrastructure and human capital.

The bottom bracket reverting to 15% from 10% is cruel and unusual punishment for the sin of being broke but other than that we are mostly talking a couple of percentage points that would be more impactive and broadly beneficial in making sure our country can function and prosper as investment.

We need to be really focused on what is best for all of us and we're stuck on stupid and greedy.

[bigtree]

23. yep

damn us greedy taxpayers

[Marr]

8. Here are two reasons he *will* do it:

1) Obama thinks society is fueled by the wealthy.

2) If he loses re-election, those cuts will be permanent, and the shortfall taken out of social programs and the middle class/poor. Nice election year scare tactic. You can bet your ass that will be the bogeyman that all of the current boosters will be shaking in front of you a year from now.

When he extends the tax cuts on the wealthy, and I do mean when and not if, I would bet you a $50 bill that he extends them until just after the next presidential election.

[Time for change]

25. You're probably right, but

that's no reason why we shouldn't do what we can do to pressure him into doing the right thing.

[tomp]

30. you seem to be assuming re-election is a crucial part of his strategy.

i think that's a mistake. i think obama works for the rich. i think the plan always was to make cuts in ss, continue the tax cuts for the wealthy, and give handouts to insurance and pharma, while continuing imperialist foreign policy.

i won't take your bet because i believe he has no intention of repealing tax cuts for the rich, in this term or any other.

rep or dem doesn't matter to the rich because they control both parties.

[Overseas]

11. Love reason 6. And have seen reason 8 in action.

Making insurance purchase mandatory is a perfect example-- will fit in with right wing paranoia of big government imposition, rolling out near the next midterms.

[Hannah Bell]

15. k&r

[TheKentuckian]

16. That's a post!

[BzaDem]

17. He is probably going to renew them for a few years so the middle class tax cuts can stay

instead of disappearing, causing a 3.1 trillion dollar hit to the economy by taking away money from people MOST likely to spend it (the poor and middle class).

When the economy is growing again at a normal rate and we have lower unemployment, he'll let them all expire.

Just a prediction.

[ProgressiveEconomist]

18. Great--but you 'buried your lead' in the last 4 paragraphs: (1) Extending income tax breaks is the W...

the WORST possible fiscal policy for accelering economic growth and job creation, and Republicans KNOW they are lying when they pitch bestowing an extra million dollars on each of the top 2 percent over the next decade as a jobs measure. The Congressional Budget Office looked at 11 possible fixcal policy optiions for suprring GDP growth and net new hiring. Extending income tax breaks ranked BY FAR the worst. See http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=9518706&mesg_id=9518706 .

[Time for change]

28. I agree it's terrible policy.

I've never seen a reputable economist say that tax cuts for the rich is good for the country in any way. Those who claim this are either lying or in denial. I think that the vast majority of Republicans who are national figures are pathological liars.

[chill_wind]

21. K & R. Thank you for pulling so much information together

and making such a good case for what is right.

[Poboy]

24. Recommend.

[Imagevision]

27. I can easily think of Billions of reasons "Why Obama Shouldn’t Extend Tax Cuts for the Wealthy"

[tomp]

29. you actually think obama is swayed by popular opinion?

not me. i think his decisions are a fait accompli.

my prediction: the rich will get their tax cuts, ss will be cut.

[Time for change]

31. To some extent, yes

I believe he wants to be re-elected -- notwithstanding the fact that he primarily serves the interests of the wealthy. Those politicians who serve the interests of the rich and powerful generally do so because they see that as the road to political (and economic) success. They may believe that serving the interests of the powerful trumps serving the interests of the people as a key to political success, but that doesn't mean that they feel they can ignore public opinion altogether. I think that it is extremely rare to find a high level politician who feels that he can completely ignore public opinion.

[tomp]

34. when the issues are crucial to the interests of the wealthy...

...the politicians are the not the ones making the choices. the politician's job is to help the rich get away with with, literally, as much as possible. just as the system at the time of fdr realized major concessions were in required in order to prevent open rebellion, the masses will get only what they wrest from the hands of the rich. i don't see much wresting or threat of wresting going on anywhere. where is the solid mass political movement advocating for the interests of the masses? it doesn't exist. all dissatisfaction is channeled through the democratic party and they are very, very good at diffusing that dissatisfaction.

[moondust]

32. #9 Kicking the can down the road is a bad idea.

If I understand the process correctly, postponing their termination for 2 years now could mean that if Republicans were to significantly gain more leverage in 2012 it would be easier for them to make the tax cuts permanent at that time. On the other hand, terminating them now would mean having to start the process all over again and probably having to go through reconciliation again.

[Time for change]

33. Absolutely

And kicking the can down the road is precisely the intention of all those who wish these disastrous tax cuts to be permanent.

[Enrique]

35. especially #7

since when are we trickle-downers? If tax cuts for the rich create jobs, why have the dems been unanimous against them? Do the dems hate jobs?

k&r!

[Shallah Kali]

36. kicking since it is too late for me to rec

:kick:

[puebloknot]

37. Too late to rec, but I'm rec'ing anyway. What this country (and this forum) needs ...

... is a little rebellion! :)

Now, they're saying that the tax cuts for the "rich," (over $250,000 a year, I presume) are very important because many/most of those folks run businesses and will create more jobs for those lower on the totem pole if only they are not just basically crippled with too-high taxes.

Spin, spin, spin.

Thanks for another good article, Teach!