Why should we be melting down our phones telling our Senators and Congresscritters “Hell NO!” on this turkey? Let us count the reasons:
— The poorer you are, the more of your disposable income you’re prone to spend. The richer you are, the more likely you are to sock it away somewhere. This is why a stimulus that mainly benefits the poor is far better for the economy as a whole than one that mainly benefits the rich. Yet the tax cut framework actually forces poor people to pay more in taxes, taking away disposable, economy-stimulating income from the 25 million people who need it most and are most likely to spend it in ways that help all of us, and gives huge chunks of it to the very people least likely to spend it in ways that will help all of us.
— A key reason given to back this deal is that the tax cuts are needed to stimulate job creation. Except that, as Peter Cohan points out, “My interviews with startup CEOs suggest that startups will create jobs when the lost profit from not creating them exceeds their cost. And tax rates have very little to do with that calculation.” This is borne out by a recent Wall Street Journal article by Justin Lahart, which confirms that companies have more cash than ever but simply won’t spend it at all, much less on anything like job creation.
— And if anyone thinks that the payroll and estate tax cuts will remain “temporary” once made: Think again. In fact, key Republican legislators have already admitted that they have no intention of letting them expire — ever.
— But, say the bill’s apologists, it does provide some stimulus. Except that the meager stimulus it might provide is going to be wiped out by rising gas prices.
So, why are we talking about giving the millionaires and billionaires a BETTER deal than Bush gave them in the name of nonexistent job creation, screwing the poor right now with more taxation, screwing the middle class in the future by weakening Social Security with payroll tax cuts, and making the deficit far worse than the actual true stimulus package of last year did, without providing any stimulus at all?
Does Obama think that’s how he’s going to keep the hedge fundies in his donor camp? He’d better think again.