Romney: Obama’s Tax Cut for the Middle Class Is an Attack on the Middle Class
Yep. That’s essentially what he said:
Previewing the message that he will bring Tuesday to the swing state of Colorado, Mitt Romney told a conservative talk-radio host that President Obama’s tax cut extension proposal would “kill jobs” and harm the middle class.
“What the president is proposing is therefore a massive tax increase on job creators and on small business,” the unofficial Republican presidential nominee told Virginia-based conservative radio host John Fredericks in a taped interview that will air Tuesday. “Small businesses are overwhelmingly being taxed not at a corporate rate but at the individual tax rate. So successful small businesses will see their taxes go up dramatically, and that will kill jobs.”
“That will be another kick in the gut to the middle class in America.”
This is the most laughable whopper since the right-wing claim that Obama hates the troops because he gives them so many benefits–thus making them dependent on the government teat, not respecting their ability to stand on their own two feet.
What Romney is saying is that by giving a tax cut for the middle class and not giving an even bigger one to the rich, Obama will destroy jobs and thus hurt the middle class. Again, a lie along the lines of “give huge amounts of money to the rich and maybe some will trickle down on the heads of the poor and middle class.” When we did that, there was trickling all right, and they had the gall to call it “rain.”
What he doesn’t mention is that (a) there is zero evidence to support his claim, (b) that tax cuts for the rich in the past have shown no propensity to create jobs, and that (c) the tax cuts he is demanding for the rich (excuse me, for “job creators” and “small business owners,” the usual false fronts) will continue to create trillions of dollars more in debt, the same debt he and others in the GOP (1) created, (2) blame Obama for, and (3) claim is killing jobs. There are, as it turns out, multiple dimensions to the GOP’s lies and hypocrisies on this one.
Once again the GOP wants to kick the middle class in the family jewels and tell them it’s for their own good, counting on the American people’s known tendency to vote against their own best interests.
Betcha the media doesn’t call him out on the mass of inconsistencies, dishonest euphemisms, and outright lies packed into this line of BS. They would not want to actually tell the truth and therefore become part of the “liberal media elite,” no sir.
More on Romney’s BS: the median small-business owner makes an income roughly in line with a standard wage-earner. While they are apt to have a broader income distribution–more have higher incomes than do wage earners–the number making over $250,000 is not great–only 3% of them, and many if not most of those are rich people disguising themselves as “small businesses.” As 97% of small business owners would get tax cuts under Obama’s plan, what Romney really means by “small businesses” is those rich people pretending to be small businesses.
As for “job creators,” Romney again means “rich people.” And that BS has been debunked, most notably by Nick Hanauer, an Amazon.com founder, in his TED talk (which TED awkwardly has not posted) where he points out that business owners are, by nature, job eliminators, that they hire only when forced to and cut jobs at every opportunity–and that the actual job creators are the middle class–the very people Obama is trying to give the tax cut to, which Romney is now trying to hold hostage so that the job eliminators can get crushing-debt-creating tax cuts.
Nick Hanauer’s must-see talk:
“massive tax increase on job creators and on small business”
We should ask Romney for a number where these alleged “job creators” ends and the parasitical wealthy of his ilk begin.
The whole tax bracket system is designed to allow conservatives to shelter the 0.1% and 1% behind the 5%, since it’s much easier to find a sympathetic 5%er.
The top 1% average a million in annual income and collectively earn 17% of the national income.
The top 1-5% average $200,000 and make 15% of the total income.
As for returning to the Clinton tax rates, here’s some dire predictions from 1993.
However, it needs to be said that 2013 is not 1993.
Greenspan was in an immensely accommodative mood in 1993-1994 and the rise of global trade, Windows 3, and dirt-cheap oil gave us one helluva economic expansion in the 1990s.
http://research.stlouisfed.org/fred2/graph/?g=8C9
blue line is the Fed funds rate and shows how the Fed came off of slowing the economy down in 1989 and actively eased in 1991 through 1993, returning rates to “neutral” for 1995-1998.
The red line shows the rise in the money supply, to facilitate all this new global trade going on (especially with China).
But now, things are all f’d up all over.
Thing is, we dare not cut spending. Doing so will throw the nation right back into recession.
http://research.stlouisfed.org/fred2/graph/?g=8Ca
shows how the $1.2T+/yr deficit (red) is the only thing keeping job growth positive at all.
All this is because the US consumer economy is basically terminally ill.
Our $8000 per capita health costs are ripping $10,000 or more per family out of the 99%’s paychecks and to the 1%’s bank accounts.
The $600B/yr trade deficit is ripping that money also out of our economy to China, Mexico, Germany, and Japan.
http://www.census.gov/foreign-trade/top/dst/current/deficit.html
The last component of the parasitical drain on the middle quintiles is housing rents.
They keep going up & up, and this is a big monthly drain from working America to the wealthy like Romney — maybe the largest, at $1.5T or so.
http://research.stlouisfed.org/fred2/graph/?g=8Cb
shows rents are up one third since the end of the dotcom recession.
We need to shut off the rent-seeking on working America, so more money stays within the paycheck economy and does not just bleed out to the 1% or overseas.
http://research.stlouisfed.org/fred2/series/MZMV
graphs the declining velocity of money in our economy. Low velocity means low economic activity.
The “job creator” framing is pure bullshit.
Missing from the discussion — even Hanauer’s — is what wealth-creation actually is.
To understand wealth-creation you must understand what wealth is — the absence of poverty.
Poverty is having unmet needs (or wants).
Our entire economy is structured on satisfying these needs and wants (and creating them if they don’t exist in the first place).
Why do we have houses? Because it sucks in many ways to live like a caveman. Why do we have paved ways? Because the raw earth is difficult to navigate.
So the most primary form of wealth is that which makes us well by satisfying unmet need or want.
I’ll skip some steps in my usual rant here and get to the meat — so many economic actors in modern society are not actually creating wealth at all, but merely profiting from being gatekeepers and skimmers on existing wealth.
Real estate agents in Japan — there’s a good example! And landlords, too! So much of what we pay in housing rents is just the consideration required to outbid the next guy who wants to rent the place, not actually recompense to the landlord for the capital cost of the housing itself (nor its depreciation).
I think with Japan’s continual depopulation this century the rent-seekers in real estate will be liquidated at least.
And Japan does have its medical sector rent-seeking under control apparently, unlike the US:
http://www.kff.org/insurance/snapshot/images/OECDChart1.gif
pretty cool, huh?
So what Hanauer is missing here is that as we “untax” the middle class (and below), what happens is this extra spending power we get just gets sucked out of the middle class (and below) via rents, mainly in housing and medical care.
This results in rent-seekers earning in the same brackets as he, who is a bona-fide capitalist “captain of industry” who at least has some connection to actual wealth-creation.
The high-tax, high-service economies of Scandinavia (which, by the way, are doing reasonably well still, something the Republicans will studiously ignore) solve the rent-seeker problem by taxing away all high-earners.
I’d like to think it’d be better to actually tax the rent-takers directly and leave the bona-fide capitalists their loot.
But Hanauer is right that we still need to redistribute wealth back from the top to the middle (and below).
What he didn’t get into either is that since the dotcom recession we’ve been using debt take-on to accomplish the redistribution, first via the mortgage credit bubble (blue) and now via the federal budget deficit (red):
http://research.stlouisfed.org/fred2/graph/?g=8Cd
The Romney argument is denying that those who are buying the $1T+ of treasury debt each year could easily just be taxed for it instead.
But to do that requires going against the 1%’s billion-dollar message machine, lobbyists, and PACs.
I think Romney winning will be worse for the US’s long-term prospects than GWB winning, if that is possible.
Not that Obama is going to be able to do anything, with a Republican congress.