|
Thursday, December 08, 2005
House Tax Vote: Fiscal Insanity Cloaked As Fiscal Responsibility
Today the House pushed through a $56 billion tax reconciliation bill, culminating what has been a month of illogical and hypocritical voting. This $56 billion tax reconciliation bill comes on the heels of a nearly $50 billion budget reconciliation bill, which ruthlessly slashed spending on everything from the food stamp program to Medicaid. It is no wonder Rep. David Obey (D-WI) said that House actions "makes Mr. Scrooge look like Mother Teresa." The bill passed 234-197; three Republicans voted against the bill and nine Democrats voted for it. Those Democrats were Reps. Barrow (GA), Bean (IL), Boren (OK), Cramer (AL), Cuellar (TX), Davis (TN), Gordon (TN), Marshall (GA), and McIntyre (NC).
The centerpiece of this bill extends through 2010 the Bush tax cut (enacted in 2003) that significantly lowered rates for five years on dividends and capital gains. These provisions, according to the Joint Committee on Taxation, will cost the Treasury $20.6 billion through 2010. $20 billion is a lot of money considering that GOP Congressmen spent much of the last four months publicly yelling that discrentionary spending must be cut in order to deal with hurricane relief spending, which we could not afford to do without budget offsets.
As Robert Reich, former Secretary of Labor under President Clinton, points out in this article, Class Warfare With Taxes, the House's actions speak volumes on where its members' loyalties lie, prefering to cut taxes on capital gains while the Senate cut taxes by extending AMT relief. Reich writes:
Most of benefits of the House’s proposed extension of the dividend and capital gains tax cuts would go to the top one percent of taxpayers, with average annual incomes of more than $1 million. Most of the benefits of the Senate’s cut in the AMT would go to households earning between $75,000 and $100,000 a year, who would otherwise get slammed.
Reich goes on to point out that most likely, both capital gains and dividends tax cuts as well as an extension of AMT relief will end up coming out of final bill negotiations. He calls this skilled political manuever an "elegant compromise" by Congress which will likely end up passing both measures while exploding the deficit.
However, while Congress takes care of the upper-middle class and the wealthy, they have done nothing but maliciously cut aid for the poor. They have particularly left behind those struggling to rebuild their lives along the Gulf Coast by offensivley using the reconciliation process to cut tens of billions of dollars from social programs mere months after the face of poverty was thrust into the national spotlight in the wake of the hurricanes. Congress and particularly those nine Democrats should be ashamed of themselves. There is a disconnect when billions of tax cuts to the wealthy are used to "grow the economy" to indirectly help people in need, but proven proactive programs that directly help people are slashed because of deficits. National budget deficits do need to be dealt with, but not by cutting the budget one day and then pushing through massive tax giveaways the next. That is simply counterproductive and illiogical.
Posted by Becky Lewis
|