The GOP is willing to raise middle class taxes to protect the very rich. Not even Grover Norquist can justify that
Every time I try to make sense of Republican tax doctrine I get lost.
For example, rank-and-file House Republicans are willing to increase taxes on the middle class starting in a few weeks in order to avoid a tax increase the very rich.
Here are the details: The payroll tax will increase 2 percent starting January 1 – costing most working Americans about $1,000 next year – unless the employee part of the tax cut is extended for another year.
Democrats want to pay for this with a temporary – not permanent – surtax on any earnings over $1 million, according to their most recent proposal. The surtax would be 3.25 percent.
This means someone who earns $1,000,001 would pay 3 and a quarter cents extra next year.
Relatively few Americans earn more than a million dollars, to begin with. An exquisitely tiny number earn so much that a 3.25 percent surtax on their earnings in excess of a million would amount to much. Most of these people are on Wall Street. It’s hard to find a small business “job creator” among them.
Nonetheless, Republicans say no to the surtax.
This puts Republicans in the awkward position of allowing taxes to increase on most Americans in order to avoid a small, temporary tax only on earnings in excess of a million dollars — mostly hitting a tiny group of financiers.
Not even a resolute, doctrinaire follower of GOP president Grover Norquist has any basis for preferring millionaires over the rest of us.
To say the least, this position is also difficult to explain to average Americans flattened by an economy that’s taken away their jobs, wages and homes but continues to confer record profits to corporations and unprecedented pay to CEOs and Wall Street’s top executives.
So Republican leaders are trying to get rank-and-file Republicans to go along with an extended payroll tax holiday — but by paying for it without raising taxes on the very rich.
According to their latest proposal, they want to pay for it mainly by extending the pay freeze on federal workers for another four years — in effect, cutting federal employees’ pay even more deeply — and increasing Medicare premiums on wealthy beneficiaries over time.
But even this proposal seems odd, given what Republicans say they believe about taxes.
For years, Republicans have been telling us tax cuts pay for themselves by promoting growth. That was their argument in favor of the Bush tax cuts, remember?
So if they believe what they say, why should they worry about paying for a one-year extension of the payroll tax holiday? Surely it will pay for itself.
Robert Reich, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. Time Magazine has named him one of the ten most effective cabinet secretaries of the last century. He has written 13 books, including his latest best-seller, “Aftershock: The Next Economy and America’s Future;” “The Work of Nations,” which has been translated into 22 languages; and his newest, an e-book, “Beyond Outrage.” His syndicated columns, television appearances, and public radio commentaries reach millions of people each week. He is also a founding editor of the American Prospect magazine, and Chairman of the citizen’s group Common Cause. His widely-read blog can be found at www.robertreich.org. More Robert Reich.
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