Tax Cuts: Good or Bad?

http://www.npr.org/blogs/itsallpolitics/2010/12/06/131847191/bush-era-tax-cuts-a-bipartisan-compromise-or-an-obama-cave

This got me thinking. I'm not so sure that extending the Bush-era tax cuts on incomes exceeding $250,000 is such a bad thing.

Why?

First off, don't get me wrong - the Bush-era tax cuts were, in my opinion, a part of what helped to drive us into this recession. It seemed that the economy was already over-stimulated, so to speak, by corporate practices and federal de-regulation. How do I connect this? Well, the rich are usually your business owners or corporate decision makers. How much corruption was revealed during the meltdown of 2008? Risky financial instruments (which were little more than fudging numbers over and over again to create pseudo-growth), outsourcing of American jobs to foreign countries at a fraction of the price - the type of things that crushed the lower class, stagnated the middle class, and empowered the upper class to keep growing.

Add in a fantastically over-inflated real estate market, and a mentality that was raping the suburban middle class: "everyone deserves a house, and dammit, we can get more than we responsibly should!"

Giving the rich a break on their taxes makes sense in a white-washed, unrealistic worldview. Sure... cut their taxes and they'll spend more on creating jobs. They'll buy more stuff and it will trickle down to the lower class. Right?

Wrong. They hoarded their tax cuts in FDIC insured CDs, invested it in high value stock (which primarily benefits more upper class - corporate heads, etc), or spent it on things like boats, BMW's or other expensive things, which do not realistically trickle down to the middle/lower class at all.

By the time that money "trickles down", it's been so heavily taxed and re-taxed that it's all but gone. Whether it's sales tax, income tax, real estate tax, or taxing you just because you fucking spit on the sidewalk, $1,000 spent by the upper class means $0.10 in the hand of a lower class family. Big effing deal.

However, we are in an economic recession with a lame duck administration. America voted for political grid-lock when the voters gave more power in congress to the GOP. This means that America voted for more bickering, less action, whether the voters really realized that or not.

(Side note - I'm not really sure that 75% of the voters in this country have a clue what they are voting for. I believe they vote for whatever emotionalism is spat at them by the media. But that's another point for another post.)

I don't think anyone with half an ounce of political knowledge didn't expect the GOP to make every possible effort to extend the Bush-era tax cuts. It's just the right wing mentality... things like "trickle down economy" and "pro-life" are like the Sovereignty of Christ to the Christian faith. It's not something you barter on in that party, period.

The GOP is clever. They struck a crafty deal. "extend tax cuts for everyone, not just the middle class, and we'll let you extend unemployment benefits."

It's a win for the GOP because they get their tax cuts for the rich, but not only that - they also brokered tax cuts for the middle class and the extension of unemployment benefits. Even if the latter two aren't really in the party's best interests, dammit, they made it happen.

What does this do to Obama? Infuriates the left? Probably, but I'm not sure that's very smart on the left's front. I'm not unemployed, but if I was, and if I was one of the millions who try to find work every day and still haven't been able to get a job for well over a year, I'd be happy. I'd also be happy that my taxes weren't going up.

If President Obama had to cave on the Bush-era tax cuts in order to continue helping the middle class and the unemployed, so be it. This country elected a Republican-led congress, so this is what we get, and the President is only doing what he feels is in the best interest of the people. A lesser of two evils. The needs of the many. You get it. I applaud it.

The article quotes some writers who scathe Obama for giving in to these demands. Well, I think the problem isn't ultimately with tax cuts or unemployment benefits. It's about the way this country has been driving itself into the ground for the last ten to twenty years.

We need to stop shipping jobs overseas.
(I pay more for internet service because I deal with a company who's call centers are in America, not Zimbabwe.)

We need to encourage local business.
(I pay more and deal with a bit more hassle to buy from my local grocer and hardware store than going to Wal*Mart.)

We need to get off foreign oil dependance. The best way to do that is not hybrid cars, but the re-vitalization of our urban core.
(I wish I could take the bus, but Cincinnati doesn't have a morning/evening route to/from my place of business. Better than that, I wish there was a 24/hr train service here, so that when I'm drunk at Grammers, I could take a train home at 2:30am.)

Re-focusing on our city schools will help re-vitalize the urban core, stifle the expansion of the suburbs, and ultimately result in stronger job growth and less dependence on foreign oil.

See where I'm going? See how the dots connect? If I don't have to live in Maineville and drive to Newport every day, just because the school district is "better", then I'm also not sinking 60 miles per day into gasoline. If I lived in Deer Park or College Hill and, (gasp) could take the train to Newport every day, then... viola. Problem solved.
Should the President take a stand and call the GOP's bluff?  I dunno.  What would that accomplish except drive millions to the streets when unemployment runs out, encourage even less middle-class spending when our taxes go up, and give the rich more of a reason to hoard their riches.  You want to see this country take a nose dive in depression, there you go.

Kudos, Mr. Obama, and shame on everyone else who keeps fighting good, progressive ideas, like universal health care and urban recentralization.