President
Obama has heard every argument from the GOP, the gaggle of conservative
economists, and financial analysts on why it's foolhardy to press for a tax hike
on the wealthy. The hike won't come close to raising the revenue needed to avert
the fiscal cliff. It will stunt business growth and drive the economy into
another recession. The wealthy already pay more than their fair of taxes while
millions of Americans on the bottom income rung pay nothing. It hopelessly
poisons the political well and insures virtual warfare with the GOP on other
legislative initiatives.
Countless
private and governmental budget and business studies from and political history
show this to be a toxic mix of economic falsehoods and political bluster. The
Bush tax cuts were in effect during every minute of Obama's first term. Yet for
every month except one of his first term
unemployment never dipped below the much touted perilous breaking point figure
of 8 percent. Meanwhile, corporations and
the financial industry magnates hoarded tens of billions of cash. Their
stockpiled cash total now stands at a near record 1.7 trillion dollars. This
could have bankrolled thousands of small and medium sized businesses, expanded
production and sales, created thousands of new jobs, and generated millions in
tax revenues. This would have been the major boost that rejuvenated the economy
that the GOP endlessly claims that forcing the wealthy to pay more will
kill.
In
truth, Obama's relatively modest hikes on the wealthy violate a sacrosanct
premise, actually two premises, that the GOP has based much of its political
existence on. One is that government is too big, wasteful and intrusive. The
other is that those who appear to benefit most from government should pay the
most for it. The big wasteful, intrusive government line spans nearly a century
of GOP politics. It has been used as a political ram to batter Democratic
presidents. It was used against FDR's New Deal, Truman's Fair Deal Program that
included a push for national health care, LBJ's Great Society jobs and education
spending programs, and to pressure JFK and Clinton into tax cuts that directly benefited corporations and the
wealthy.
The
real aim in the GOP's mania to shield the rich from higher taxes is to further
bulk up the private sector and radically chop down government. Taxes have always
been its convenient, and crowd pleasing weapon to accomplish
that.
This tracks directly to the GOP's other sacred belief that
the lower end workers, and the poor are in essence leeches that feed at the
government trough at the expense of upper income earners and the wealthy. This is just as bogus. A study by the
nonprofit Annie E. Casey Foundation and the Corporation for Enterprise
Development found that the top 5 percent of taxpayers got the overwhelming
lion's share of the nearly $400 billion that the federal government spent on tax
breaks and other wealth building strategies in 2009. The major corporations have
fared even better. The Tax Foundation in a 2010 report found that corporations
will be showered with more than $600 billion in government entitlements spread
over the next five years in the form of an array of tax breaks and loopholes. The partial checklist of those breaks
include Graduated Corporate Income
Credit, Inventory Property Sales, Research and Experimentation Tax Credit,
Deferred Taxes for Financial, Firms on Certain Income Earned Overseas, Alcohol
Fuel Credit, Credit for Low-Income Housing Investments, Accelerated Depreciation
of Machinery and Equipment, the Deduction for Domestic Manufacturing, Exclusion
of Interest on State and Local Bonds, and Deferral of Income from Controlled
Foreign Corporations.
How much of the tens of
billions they'll receive from these government entitlements will actually go
toward business expansion and job creation is subject to question. One thing
that is not open to debate is that few GOP leaders will go to the barricades to
slash or end against these entitlements that drain the federal budget of vast
revenues. Yet they'll continue to rail against expenditures on food stamps as a
prime government revenue drain.
The
GOP figured that waging a fierce political, media and public relations campaign
against Obama's tax hikes for the wealthy would be a can't miss tactic to rally
conservatives, the business community, and a significant number of Americans
that genuinely believe government spending and power is way out of control. Even
more of a sweetener, that it is an issue that can take some of the luster off of
Obama's decisive presidential win by tarring him as an autocratic, power
grabbing, tax and spend business and budget buster.
It
hasn't worked. Polls show that a majority of Americans favor hiking taxes on the
rich and preserving entitlement programs that benefit the middle and working
class, and even the poor. This won't stop the GOP, though, from still waging its
age old battle to protect the rich and batter a Democratic president on its
straw man issue of no tax increases for the rich. That in itself is more than
reason enough why President Obama must stand firm on taxing the
wealthy.
Earl
Ofari Hutchinson is an author and political analyst. He is a frequent political
commentator on MSNBC and a weekly co-host of the Al Sharpton Show on American
Urban Radio Network. He is the author of How Obama Governed: The Year of
Crisis and Challenge. He is an associate editor of New America Media. He is
the host of the weekly Hutchinson Report on KPFK-Radio and the Pacifica
Network.
Follow
Earl Ofari Hutchinson on Twitter: http://twitter.com/earlhutchinson
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