TheLoop21.com

By: Marvin King | TheLoop21 (Add to your loop)
Wed, 07/28/2010 - 00:00

The leftover policies from the Bush era are helping the wealthy coast through this recession virtually unscathed.

In another display of stunning hypocrisy, congressional Republicans continue their fight to reward the rich during the recession. During the upcoming campaigns, Republicans will claim to represent every American, but that’s hardly the case when it comes to tax policy. This time the battle is over whether Congress should extend Bush’s 2001 and 2003 Bush tax cuts and the GOP is siding with the rich over the middle-class.  

Further, because they have so little black support in the electorate it is easy for Republicans to ignore the racial component of their tax policy. Black households have an average net wealth of just $500, compared to $43,000 for white households. Since Bush enacted his tax cut scheme, this gap has worsened. In designing tax policy to give people a chance to pursue the American dream, Republican policy fails miserably. 

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To be fair, Bush cut taxes for all workers, not just the rich. However, the rich enjoyed disproportionate benefits and those benefits are destroying the budget. With a destroyed budget, Obama practically had to beg Congress for extra money to help the unemployed -- which black workers are desperate for.

In reality, Republicans use tax cuts as an opiate. They give the working class a little taste of tax cuts, only so they can cut their own taxes much, much more. Essentially, GOP policy is to bribe everyone with a little tax cut, then get to watch the federal deficit go belly up. In their mind, this justifies Republicans sweeping in and cutting spending on every program that benefits Democratic voters under the excuse that we can’t afford it anymore. It's a two-pronged strategy to let them keep more money for themselves and have the government help you that much less. It's a mean, cynical strategy. 

For the sake of good policy, Congress should let all tax cuts expire to counter trillion dollar deficits. However, in terms of politics and the recession, Congress should extend the middle-class tax cuts while letting tax cuts for the wealthy expire. Smart economists agree that letting the middle-class keep more of their money has a greater effect s the economy because the middle-class, unlike the rich, will actually spend any extra money locally and on all manner of consumer products. They will not do, like the rich, and sock it away.  

In other words, the rich won’t do what I did when I left town recently, which was take all the loose change from the house to the store to turn it into cash.  

Democrats better play the smart move and force Republicans to choose between tax cuts for the rich and for everyone else. Put Republicans in a pickle.