REICH: Tax cuts for the rest of us
TEXT OF COMMENTARY
Kai Ryssdal: Today's election day for the 112th Congress. Democrats and Republicans who'll be in the House when it convenes in January chose their leadership this afternoon. No new names: Nancy Pelosi for the Democrats, John Boehner for the GOP. He'll be the new Speaker come January. 'Course, there are still a couple of weeks left in the current session and that small matter of what to do about the Bush tax cuts -- keep 'em or let them go.
Here's commentator Robert Reich.
Robert Reich: The Bush tax cut should be extended -- not just to families earning up to $250,000, but up to half a million dollars for two years. In other words, to everyone except the top 1 percent.
Why not the top 1 percent? Because they don't need it and don't deserve it. The top 1 percent now takes home almost a quarter of the nation's total income; that's up from 10 percent as recently as 1980. A wide chasm has opened up between the upper-middle class -- lawyers, doctors and small business owners -- and the very rich, now in executive suites and on Wall Street who rake in millions. Extending the tax cut to them would create almost no economic stimulus, because they spend a much smaller proportion of their income than everyone else.
But it would cost $130 billion over two years, blowing a giant hole in the deficit. I'd rather use that $130 billion to re-hire every teacher, firefighter and police officer laid off over the last two years, and save jobs that are now on the chopping block.
Supply-side economists argue that the top 1 percent will stop working as hard if they have to go back to paying what they did under Bill Clinton. That's baloney. The Clinton years were great years for them. And the Bush tax cuts they received never trickled down anyway. Between 2001 and 2007, the median wage actually dropped.
So, will Congress do the right thing and not extend the Bush tax cuts to the top 1 percent? Don't hold your breath. The political power of the top 1 percent is evident in everything from hedge fund to private equity fund managers who can treat their incomes are capital gains subject to just a 15 percent tax to multimillion-dollar home interest reductions on executive mansion.
But it's possible Americans have had it with power and privilege at the top. Many people are mad as hell and not gonna take it anymore!
Ryssdal: Robert Reich was Secretary of Labor for President Clinton in his first term. His most recent book is called "Aftershock: The Next Economy and America's Future." Next week, back in his regular spot, David Frum. As always, your thoughts are welcome anytime.