Tax, Lies and Videotape--Political Mythbusters to the Rescue!

Okay, there really isn't "videotape." I mentioned it so the title would scan.  But there are plenty of lies being blithely spread these days about taxes, spending, debt and deficits. And the way what passes for political discourse works these days is that he who repeats the most lies often enough gets the most people to believe them and takes all the marbles.....even though his words might indicate that he's lost all his months ago.

Am I the only one around here who seems to notice that the GOP (especially the Tea Party) not only all seem to be speaking verbatim from the same set of talking points but that they don't hear a word anyone else is saying? Polls say that even a majority of voters who self-identify as Republican think it's a fine idea to raise tax rates on and end loopholes for extremely rich people (i.e., those making >$1M a year, certainly those earning >$1B) and a lousy idea to cut Medicare and Social Security.  Even David Brooks is beginning to get it. Yet all the conservative automatons I hear these days, from George F. Will, Nicole Wallace to David Gergen to Joe Scarborough and Charles Krauthammer (to the closest thing the GOP has to a dictator, Grover Norquist) all seem to be squawking "BRAAAWWKK--tax & spend, tax & spend, big government, job creators" like parrots whose brains have all been replaced with multiple copies of the same microchip.  Where the hell are the grownups on the right?  Instead of studying facts, they're desperately bleating the same fallacious mantras over and over in the hopes that voters' will give up and agree with them. Sadly, it seems to be working.

So before it's too late, let's explore and explode the buzzwords and myths that Republicans believe so blindly and repeat incessantly.

MYTH A:  We are not an undertaxed nation.  MYTH B: We are taxed so high that taxes are killing everyone, especially business.

FACT: Compared to just about every other first-world democracy (especially those with robust economies such as Germany) we sure as hell ARE undertaxed.  That is not to say that the poor and the middle class are undertaxed:  the poor are overtaxed (and increasingly under-served) while the middle class is paying just about the right amount.  Get above an annual income of half a million to a million, though, and the inequalities and inequities kick in.  I'm not talking about people with over a million in assets--just people who actually net that much every year.  Here are some sobering statistics:  The top 1% of American earners get 20% of the nation's income.  The wealthiest 5% have 95% of the resources. Yet, the sections of the Internal Revenue Code that apply to those of us pulling down less than $500K a year and whose income is mainly in the form of wages for work don't apply to the uber-wealthy whose income from interest, dividends, trades and bonuses flows like a faucet.  The tax rate on capital gains is less than half of the top tax bracket on ordinary income.  Now, I'm not arguing we ditch that differential across the board--it wouldn't be fair for those whose savings and retirement plans depend on capital gains, as well as those profiting from selling their residences who've already used up the once-a-lifetime exemption for such a profit.  But if you took JUST billion-dollar earners and taxed the TOP bracket of their capital gains at the lowest ordinary income rate, taxed their seven-figure annual bonuses as the wages they are instead of the capital gains the IRS pretends they are, and eliminated interest-shifting---again, not for everyone but just on these folks alone--we'd realize an immediate $4.5 billion reduction in the deficit.  Take away the corporate jet deductions, and the ability to declare yachts "residences"and there goes another $2-3 billion.  Eric Cantor (a front-runner, along with Anthony Weiner, Dominique Strauss-Kahn and Rupert Murdoch, for this year's "Shonda Fur de Goyim Award") and his ilk on the one hand scream that to do this would seriously injure the "job creators" (we'll get to that in a minute) and on the other hand dismiss the revenue amounts as too trivial to make a dent in "entitlements."  You know what Everett Dirksen used to say: "a billion here, a billion there--pretty soon you're talking about real money."  Now, extend those rate and rule changes downward to those earning, say $100M a year, then to $1M--and watch the billions pile up.  And NONE of you reading this, nor (I'd bet) anyone you know personally, would be paying a penny extra in taxes.

MYTH: The top 2% of American earners pay 38% of the taxes.

FACT: Ah, lies, damn lies and statistics.  Even if that's true (which is not a given), that doesn't mean everyone in the top 2% is paying a tax rate of 38%.  See above.  And when some hedge fund manager makes over a million bucks AN HOUR, he really ought to kick in his fair share.  (Dozens of Americans make more than that an hour!). Did you know Donald Trump is only the 153d wealthiest guy in America?  Besides, they're getting way more than TWICE that percentage of the nation's income.

MYTH D: "Debt bad. Debt very, very bad. Debt ALWAYS bad. Worse than fire. Deficit evil." MYTH E:  A government should be run like, and budgeted like, a business.

FACT:  Okay, so Frankenstein's monster isn't among the conservative pundits.  But that doesn't keep them from disingenuously trying to apply household-budget standards to the world's largest macroeconomy.  Listen: a government is not a household.  It isn't even a business.  You'd think supposedly educated people might realize this.  (I use the term "educated" loosely--there are little fundamentalist-church-run colleges that give you a less-well-rounded education than most community colleges, never mind major state unies or the Ivies; and a disproportionate number of Tea Party darlings with degrees seem to have graduated from them).  Government debt is not necessarily evil.  Deficits aren't, no matter what they'll tell you.  Without adequate government spending on jobs and economic stimulus, it's impossible to rev up and out of a recession.  FDR knew that--both sides of the story:  the economy came roaring back when the New Deal was instituted; but went back into the toilet when he listened to the deficit hawks.   And speaking of households, okay, let's assume for a minute that you CAN apply household standards to government budgeting.  Know what'd happen if families never went into debt? No cars or homes would be sold (and few built) because nobody'd ever take out a mortgage, auto loan or lease.   Which leads us to a sort of corollary:

MYTH:  America is an ownership society. Renters are not as valuable or worthy as homeowners. 

FACT: We all know how that turned out.  Renters were made by Bush to feel as if they were shiftless second-class citizens, so EVERYONE went out and tried to buy a home, to do their bit for society and America.  And of course, only the most credit-worthy buyers got mortgages. Yeah, right.  Tell me about Sept. 2008 again....

MYTH G:  You can't raise taxes during a recession--it'll spook the job creators. MYTH H: The job creators aren't creating jobs because (pick one:  they're uncertain about the economy; they're being killed by taxes).

FACT: True, if you raise taxes on the poor and middle class during a recession that'd be a disaster. But who the hell is talking about raising taxes on the middle class? Not Obama. Not a single Democrat.  Put that bogeyman back under the bed, please.  So what about the job creators? Well, the wealthy aren't all job creators. Some of them NEVER have been and never will be: e.g., independently wealthy, hedge fund managers, derivatives traders---none of them "create jobs" other than perhaps hiring a personal chef or maids (and probably off the books at that).  What about wealthy businesses? Well, it sure isn't taxes or the prospect of losing their tax breaks that have kept them from creating jobs. In fact, at the turn of the century, they discovered that by using more technology, offshoring, union-busting (and contract-breaching), cutting regulatory corners and outsourcing they could be just as productive AND make more money by DOWNSIZING.  And they did this during times that taxes were at their lowest and profits getting higher and higher.  Uncertainty? They couldn't be more certain that the profits will keep rolling in.  Don't kid yourself: if we give them any more tax breaks, where's that money going--employee raises? Hiring? Dividends to run-of-the-mill stockholders? Improving their business' infrastructure and capital? Lower prices? Please---it's going right back into their and major investors' pockets.  If it gets spent, it won't be spent on stuff that stimulates our economy, but rather luxury goods and services, much of them foreign.   If they are serious about using tax savings to create jobs, fine. Show us the jobs (onshore and with decent benefits and wages) and we'll show you the money.  Fail to create those jobs and pay a penalty next tax day. 

MYTH:  We have a deficit. Therefore we shouldn't raise the debt ceiling unless we cut back on entitlements, which are in such bad shape they will disappear (not that they shouldn't).  So let's kill them off faster. 

FACT: Oh, where do I begin? First, let me put my nose clips on--the smell of bullshit is making me gag.  First of all, the debt ceiling has nothing to do with the deficit.  The debt ceiling isn't a limit on how much we can increase the deficit, nor on incurring new debt. No, it's a ceiling on how much EXISTING debt we can pay back. Know what happens if we don't raise it? We become the world's biggest deadbeat. Overnight our bonds and cash are devalued, our national credit rating (and even the credit rating of the most prudent individuals) plummets, and I don't have to tell you what's going to happen to purchasing power and personal net worth (down) and interest rates and inflation (up). And all this without anyone's income going up, either.  Even the banksters get this--they pulled McConnell aside the other day and asked him, "Are you freaking CRAZY? Do you want us to go under and take you down with us?"  You want a foretaste of Armageddon (or at least modern-day Ireland, Iceland or Greece)? Don't raise the debt ceiling.   (And don't say you weren't warned).  As to entitlements---well, they're called that precisely because that's what they are--not welfare, not handouts. We paid for them, just as we pay insurance premiums. And they're not going under--it's not a Ponzi scheme because the birth rate slowed and there won't be that many more (or who knows, even as many) potential beneficiaries when the current young adult generation hits retirement age.  It's self-perpetuating. Maybe it won't be as flush as it is now, but Soc. Sec. and Medicare won't die.  And there's a very easy and painless way to top it up--not, as has been misguidedly suggested, by raising the eligibility age but by either eliminating the contributions cap on high earners or means-testing:  either scaling back benefits or ratcheting up premiums & co-pays for the wealthy.

MYTH: The people don't want rich people's taxes raised.  Shared sacrifice means that everyone--the poor and elderly included, should have to pay more and get less. Except rich people.  That would be "wealth redistribution," which is actually communism.

FACT: If "the people" really think that the rich shouldn't have to bear the brunt of deficit reduction, it's because the right wing leaders have lied shamelessly to them--that they have any intention of or power to effect conservative social change when it comes to "values." I'll tell you who (other than the rich, of course) really don't want the rich to pay a penny more in taxes:  the right wing political leaders.  And it's not out of some misguided sense of the possibility of Horatio Alger stories coming true (another myth that "the people" have been fed--venerate the wealthy because some day you may be wealthy too).  No, it's because if the rich have to cut back, the campaign cash will start drying up. And while some corporate and uber-rich donors hedge their bets and give to both sides (not out of a sense of altruism but rather pragmatism), the vast majority cast their lot with the GOP.  They know what side their brioche is cultured-buttered on.

MYTH:   Obama has had two years.  Deficit spending is out of control. Where are the jobs?

FACT: Do those idiots have amnesia? Anyone remember 2001-2008:   two hideously expensive wars (one utterly unnecessary and downright reprehensible), irresponsible tax cuts for the wealthy, deregulation of the finance industry, rampant downsizing and offshoring?  Clinton left office with a sizable surplus.  Bush spent it on wars and gifts to his wealthy buddies.  Obama inherited a trashed economy and already record-high unemployment.  Like FDR, he tried to stimulate the economy by creating government jobs in the infrastructure sector. But the GOP decided ab initio that their ONLY goal was to keep Obama from being reelected--and in order to do that, they stomped on the brakes in both houses of Congress. Yes, I know that until Jan. 2011 the Democrats had a majority in both houses.  But a Senate majority, even a so-called supermajority, is useless as long as the minority has the power to filibuster and there aren't 60 lockstep majority votes to cut it off.  The Democrats never had a supermajority---unlike the uniformly reactionary GOP, the Democrats have centrists and conservatives among them.  And nothing can get passed without a majority in both halves of Congress. So it got even harder for Democrats to get anything passed--and easier for the GOP to kneecap Obama--when the GOP took over the House in Jan.  And unlike the Senate, the minority party has no power over the majority in the House.  So, Mr. Boehner, Mr. McConnell, I'll ask you the same question: where are the jobs?  The only thing Obama's done wrong is to be a lousy negotiator: not surprising for a lawyer who's never had to horsetrade or bargain a settlement.  I sort of wish he'd been an ambulance chaser for a little while--then he'd have learned basic bargaining strategies.  You always ask for more than you want and offer less than you're willing to give up--not start from a position of fairness and offer concessions as proof of good faith.  And lest anyone accuse Obama of breaking promises, remember he's behaved just the way someone who'd wanted to transcend partisanship has--but the partisans on the other side have thwarted him at every turn.

So, come 2012, are you going to realize who really engineered the further collapse of the economy? Or are you going to swallow the GOP's position that it's all Obama's fault that he didn't give in on social  and spending issues?  That position reminds me of an armed robber who's  murdered his victims, and cites as his defense, "Your Honor, it was their own damn fault. I GAVE them a choice: their money or their lives. They should have given me their money."

Leave a comment

Add comment