Thursday, December 13, 2012

More "fiscal cliff" bullshit from Republicans and the media

By Michael J.W. Stickings

And really, if you want bullshit (as opposed to all-out right-wing evil), just turn to CNN:

One of the reasons Tuesday night's conversation between President Barack Obama and John Boehner did not go well was because the GOP House speaker sent the White House a fiscal cliff proposal calling for a permanent extension of Bush-era tax cuts for all Americans, including for incomes in the top 2%, a Democratic source said Wednesday.

Democrats took the GOP counter offer to mean that tax reform cannot result in any marginal rates higher than current law, according to the source, who said Boehner's proposal was a "sign" to Democrats that "Boehner and the GOP are unwilling or unable to do any sort of deal that can pass the Senate or be signed by the president."

Democrats favor raising tax rates on wealthy Americans as part of a deal to avoid the year-end fiscal cliff, while Republicans want to extend the Bush-era cuts for all income levels.

A Republican source insists the White House may have misinterpreted the latest GOP offer, since Boehner's offer includes tax reform down the road, which would render anything permanent moot.

Okay. Deep breath.

First, Democrats want tax rates on the rich to return to Clinton-era levels, not, as is the suggestion here, to raise tax rates on the rich, which suggests that the baseline is the one set by Bush and that anything above that means a tax increase. (You'll recall that the Clinton era was a rather good one for the rich and for the economy generally.) President Obama signed an extension of the Bush tax cuts for two years back in December 2010. But that is no longer desirable. The economy is recovering well (not rapidly, but sustainably) and there is a need to get the longer-term fiscal situation under control. That requires more revenue (because spending cuts would be either not enough or simply draconian), and that means letting tax rates for the rich return to more normal but still historically low Clinton-era levels. Which means having the rich pay a bit more, which they can certainly afford to do.

And saying that it's "raising tax rates on wealthy Americans" isn't accurate. The media get this wrong given their abject ignorance of tax policy, but what we're talking about here is an increase in the tax rate for income over $250,000. Whether you're "rich" or not, your income under that amount will be taxed at the same rate as everyone else. It's only your income above that level that will be taxed at a higher amount.

Second, Boehner's Republicans are clearly full of shit -- "tax reform down the road"? What does that mean? Down the road when a Republican's in the White House? Down the road when we're not in a corner of our own making, with the public against us and the president having all the leverage? They clearly aren't serious about making any sort of reasonable deal.

They want the Bush tax cuts -- all of them, especially those for the rich -- to be effectively permanent. This isn't "moot." President Obama, seeking a reasonable compromise, has already agreed to give away a great deal (far too much, some would say -- and I would agree) in search of a deal. And he supports extending the Bush tax cuts on lower income levels, along with various spending cuts.

But Republicans, having just lost the election, with public opinion solidly against them on fiscal issues and particularly on tax policy for the rich, held hostage by their own extremist ideology and absolutist obstructionism, and refusing to negotiate in good faith, are sticking to their usual line.

Contrary to what most in the media are saying, with their stupid countdowns to the end of the year (and, they say, to economic apocalypse), there's still a lot of time. The "fiscal cliff" is really just a low-grade downward slope. The effects of the tax-rate increases and spending cuts will not be felt immediately. And the president will have a lot more leverage in the new year, once the Bush tax cuts have expired and he can negotiate from a new baseline, calling for middle-class tax cuts and letting Republicans continue to defend the indefensible and take the blame for whatever downturn follows.

Ultimately, Republicans will cave. They'll have to, lest they implode. And sp right now there's no need for President Obama to keep trying to work out a deal with them so long as they refuse to put aside their plutocratic anti-government agenda. In rather more diplomatic language, he should tell them to go shove it.

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