Why the tax “compromise” is wrong:
- The Bush era tax cuts flattened the tax structure, but did not remove any of the deductions available only to the rich, so the result has been to make our tax structure more regressive. If these tax cuts for the rich continue, our tax structure will become permanently regressive (meaning that the poor pay more than the rich).
- The FICA social security tax should not be reduced, as this is the income that keeps the program going. Instead, the cap should be removed so that everyone pays the same percentage of income, no exception for the rich. I can’t believe that Obama is trying to sell this as a benefit, when it weakens the social security system and puts off removal of the cap.
- If the middle class tax cuts expire, so be it. I won’t be happy, but unlike the rich, I am willing to pay my fair share to keep the country operating and/or reduce the deficit.
- The estate tax should not be reduced, in fact it should be increased. The United States now has the greatest income inequality of any developed nation (if we can consider ourselves to be in that category), and it is largely because we allow too much wealth to be passed along through inheritance. The single greatest indicator of economic success is the wealth of one’s parents. Isn’t it time that we returned to our ideals of equal opportunity rather than inherited privilege?
- Extension of unemployment benefits are critically important, but not worth giving in to the Republican demand for tax cuts for the rich. I’d like to see unemployment benefits extended for as long as the unemployment rate is above 8%, not these little 13 month extensions. That would provide an incentive for both Republicans and Democrats to really get to work on putting people back to work instead of just hand-wringing over the “jobless recovery.”
- Though I’ve not been able to get a handle on the details, it would appear that the “compromise” will actually increase tax rates for people below the federal poverty level.
If this tax “compromise” does not pass at this time, the Republicans will introduce far worse in the next congressional session, but the difference is that the blood will then be on their hands, and anything so regressive will be unlikely to pass. It is important to remember that more than half the people voted in the last presidential election to end the Bush era and return to a progressive ideal of compassion and solutions. Despite the Republican majority in the House, right wing legislation is unlikely to pass either house.