The Kroog Versus The Bush Tax Cuts

Paul Krugman reminds us that Members of Congress complaining about budget deficits don't seem to mind extending the Bush tax cuts...to themselves.

So what’s the choice now? The Obama administration wants to preserve those parts of the original tax cuts that mainly benefit the middle class — which is an expensive proposition in its own right — but to let those provisions benefiting only people with very high incomes expire on schedule. Republicans, with support from some conservative Democrats, want to keep the whole thing.

And there’s a real chance that Republicans will get what they want. That’s a demonstration, if anyone needed one, that our political culture has become not just dysfunctional but deeply corrupt.

What’s at stake here? According to the nonpartisan Tax Policy Center, making all of the Bush tax cuts permanent, as opposed to following the Obama proposal, would cost the federal government $680 billion in revenue over the next 10 years. For the sake of comparison, it took months of hard negotiations to get Congressional approval for a mere $26 billion in desperately needed aid to state and local governments.

And where would this $680 billion go? Nearly all of it would go to the richest 1 percent of Americans, people with incomes of more than $500,000 a year. But that’s the least of it: the policy center’s estimates say that the majority of the tax cuts would go to the richest one-tenth of 1 percent. Take a group of 1,000 randomly selected Americans, and pick the one with the highest income; he’s going to get the majority of that group’s tax break. And the average tax break for those lucky few — the poorest members of the group have annual incomes of more than $2 million, and the average member makes more than $7 million a year — would be $3 million over the course of the next decade. 

Last I checked over 40% of Congress qualifies for millionaire status and dozens have yearly incomes in the $500,000 plus range, so yes, Obama's basically telling Congress to raise taxes on many of its own members.  Sen. John Kerry is by far the wealthiest member of Congress, he'd take a major tax hit but he's willing to pay it.  Republicans in that range, not so much.

In other words, the majority of the tax breaks aren't going to go to "small business owners and family farms" like Republicans complain about, but corporate heirs and financial mega-players who make millions and stand to save millions if the Bush tax cuts are extended to them.  Some two-thirds of a trillion dollars will be given away and nearly all of it to the richest one-tenth of Americans.

Fiscally responsible Republicans are perfectly fine with that.  They want the money to come from social cuts from the poor and middle class Americans instead.

That's how they roll.