The gauntlet has been thrown down in the tax fairness fight. House Majority Leader Eric Cantor earlier today announced that House Republicans will schedule a vote before the August recess on making the Bush tax cuts permanent for everyone, including the rich and super-rich.
The question now is will Democrats continue to give away the high ground in this fight before the battle even begins.
With members in their districts for the Memorial Day recess, it is a good time to tell your member of Congress, face to face if you can, “Stop cutting essential programs for the middle class and economically struggling to protect and even increase tax breaks for the wealthy. Everyone should pay their fair share of taxes. Let those who are doing good in America do right by America.”
Some congressional Democratic leaders, including a few that we have counted as allies in the past, want to strike what appears to be a preemptive compromise before the political fight heats up. While the House House and congressional Democrats have in the past been united in opposing continuing the 2001 and 2003 tax cuts for people earning more than $250,000 (including single filers earning more than $200,000), prominent voices are now calling for that ceiling to be lifted to $1 million.
Americans for Tax Fairness, a new coalition of organizations that includes the Campaign for America’s Future, opposes that change. The reason is simple: As Frank Clemente, the director of the coalition, said in a statement, to make the economy work for everyone “we need adequate levels of investment in critical areas like education and rebuilding infrastructure that create and sustain jobs. We also need a balanced and equitable approach to the federal budget challenges we face, which includes protecting critical services for the middle class and the most vulnerable. This requires that we all pay our fair share of taxes, especially big corporations and the richest 2 percent making more than a quarter of a million dollars a year.”
Allowing the Bush tax cuts to expire for everyone except for households earning less than $250,000 would increase federal revenue by up to $70 billion a year. But 43 percent of that total would be lost if the threshold was set at $1 million instead, according to Citizens for Tax Justice. And people earning less than $1 million would get only half the benefit anyway, CTJ points out: “About half of the additional tax breaks resulting from moving the threshold from $250,000 to $1 million actually go to taxpayers with income over $1 million – because they’re getting additional tax breaks on all of their income up to $1 million.”
Keeping the threshold at $250,000 for eliminating the Bush tax cuts would mean that taxes would increase only for the wealthiest 2 percent of Americans. Despite all of the conservative bleating to the contrary, this would not have a negative impact on job creation. Actual job creators, rather than the mythical beasts that roam the minds of the people who write right-wing talking points for inside-the-Beltway types, say helping to boost economic demand is the one thing government could do to help them create jobs. And government can do that by putting people to work on the schools, infrastructure and research needed to rebuild a 21st-century economy wrecked by misguided conservative economic policy.
Cantor, by pressing for a vote on the Bush tax cuts before the political conventions, is picking a fight progressives welcome. A solid majority of Americans agree that the Bush tax cuts should be ended for people making more than $250,000, and majorities also support putting that revenue to work in specific ways that will boost the economy for everyone, not just the wealthiest 2 percent. Cantor and his corporate crowd are not on the side of the people in this fight; it would be political idiocy to cede ground on this now.