Waiting For Plan C

As the country lurches toward the fiscal cliff an army of Tea Party supporters has been on the phones putting pressure on Republican representatives to reject House Speaker Boehner’s “Plan B” which was supposed to help stave off the inevitable. Bear in mind that Plan B would have, in effect, involved raising taxes on people making over $1 million and that was considered unacceptable by the Tea Party faithful. They think they can save the economy by raising taxes not on themselves but on the dwindling middle class and cutting programs such as health care and food stamps — but NOT “defense” (which is a sacred cow). Their plan is absurd, but this doesn’t deter them in the least.

One of the more disturbing facets of the fight to avoid the fiscal cliff is the amount of pressure Tea Party groups can put on the Congress. Clearly, this group is made up of the 20% of those in this country who control 93% of the wealth. As a story in HuffPost noted recently, referring to the Club for Growth, a powerful Tea Party affiliate:

“Members of Congress know we’re not afraid to get involved in a primary,” Club for Growth’s communications director, Barney Keller, told HuffPost on Thursday night. “Members know that the first thing we do is look to our scorecard, and decide who is a pro-growth vote and who isn’t. And we felt that to vote in favor [of Boehner’s plan] would be to vote for a tax increase, and against economic growth”

Talk about arrogant: if you want to keep your job you will play ball with us. And why wouldn’t the members of Congress want to “play ball”? Where else could they make the kind of money they make for doing little or nothing and voting themselves pay raises whenever they feel like it? It’s the gravy train and they want to stay on it. They are indeed single-minded in their determination to remain in office. You can’t really blame them. As HuffPost noted:

Keller was unapologetic about Club for Growth’s impact on congressional races. “The number one thing people in Congress fear is losing their jobs,” he said. “So we don’t lobby members, we help educate them. And if you look at the rising stars of the [Republican] party, it’s a lot of people who were supported by” Club for Growth.

Why do I get the feeling as I read this that the man is smirking? In any event, the notion that we can work out of the economic mess we are in by raising taxes on the dwindling middle classes and protecting the wealthy — that this will promote “economic growth” — borders on delusion. It can’t be done. To be sure, some programs will have to be cut, including (one would hope) defense spending. But the wealthy who pay very little of their income in taxes must start to pay their share or matters will continue to worsen. One does wonder if they really care.

The wealthy on average pay somewhere around 35% of their income in taxes — though exact figures are hard to come by in light of all the loopholes in the tax laws and the ways the rich have found to hide and protect their wealth. Mitt Romney, for example, was reported to have paid a mere 14% last year in income taxes on a very large income. But when we think that this country was at its most prosperous just after the two World Wars when the wealthy were paying a large portion of their income in taxes — as high as 91% in 1946! — the unwillingness of the wealthy to pay the piddling amount they are being asked to pay, even with Boehner’s anemic plan, tells us more than we want to know about their commitment to the growth of this economy.

Even if the wealthy were asked to pay as much as 70% of their income, they would still retain $300,000 on an income of $1 million. You could somehow manage to feed your family on that amount, and the wealthy make considerably more than $1 million a year. Stare at the flag and put your hand to your heart, but heaven forbid that you part with some of your money to help out your country. This is “patriotism” spelled  f-u-c-k-y-o-u. It stinks.

6 thoughts on “Waiting For Plan C

  1. Hugh, great post, yet a troubling one. Boehner may be able to negotiate a deal with the President, but I don’t think he has the votes. He needs 40 or so Republicans to join all of the Democrats. And, at the end of the day, we need tax revenue increases, even more than they are talking about to solve this nut. So, I believe January 1 will come without a deal and we go over the cliff. Then what happens? The markets will react to their inability to make a deal, first and foremost, as a sign of Congress’ gross negligence and incompetence. As for the financial impact, we get closer to where we need to be and the impact will be felt throughout the year, not at one time. Maybe the cliff is the answer, even if it may stall some of the recovery.Yet, what will happen is they will negotiate back changes when the Bush tax cuts are repealed for everyone and that first paycheck hits. I would hate to be in the payroll department of a company. Have a great holiday, cliff or no cliff. BTG

  2. I don’t see the cliff as the Armageddenon that most would have us believe. Immediate tax increases to the wealthy is not a bad deal, and the average taxpayer’s increase is about $950 over the course of 12 months. Remember, the cliff is a 10 year issue, not just a Jan. 2013 problem.

    But, a 50% cut to the military budget is a good thing, perhaps they will finally kill the F-35 fighter, now a multi-hundred billion dollar boondoggle project, of dubious value. Perhaps they will also cut back on the 1000 generals and admirals…why do we need so many “top leaders” and their expensive enterouges?

    Practically speaking, after Jan. 1st the issues will likely be addressed on a piecemeal basis, with the priority the american taxpayer, the 98%. Perhaps, that would not be such a bad process.

    Have a great holiday

    • I agree, Barney. I gather the concern is that it will put us back into the recession we are barely coming out of. But it will also force the Republicans to reintroduce their “trickle-down” economic theories again and that will be interesting to watch! Have a Happy Holiday!

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