Yesterday, Washington Post reporter Jeff Stein noted something that should surprise no one, namely that the Republicans want to extend the Trump tax cuts for the rich if they capture the House— and go even further by cutting taxes of corporations. “With Democrats likely to lose control of the House of Representatives and possibly the Senate,” he wrote, Republicans are preparing to advance legislation that would make permanent the GOP’s 2017 changes to the tax rates paid by individuals. Republican officials will also push for scrapping some of the law’s specific tax increases on corporations that were designed to offset the cost of their enormous overall cut to the corporate tax rate. Many economists say the GOP’s plans to expand the tax cuts flies against their promises to fight inflation and reduce the federal deficit, which have emerged as central themes of their 2022 midterm campaign rhetoric. Tax cuts boost inflation just like new spending, because they increase economic demand and throw it out of balance with supply. But Republicans say they believe these efforts would put Biden in a political bind, requiring him to choose between vetoing the tax cuts— giving the GOP an attack line in the 2024 presidential election— or allowing Republicans to win on one of their central legislative agenda items.”
It boggles the mind that anyone, anywhere thinks Republicans are somehow “good for the economy.” They’re not and they never have been. A take a look at this simple graphic:
Two Republican closet cases, Adrian Smith (NE) and Jason Smith (MO), who are both vying to chair key House tax-writing committees, are plotting. Stein reminded his readers that “Without a filibuster-proof majority, Republicans would likely have to peel off several Democrats to pass such measures through the Senate to force Biden’s hand… The fight over Trump’s tax cuts could become a key feature of divided government should Republicans take control of one or both branches of Congress. Congressional lawmakers and the White House will have to come to agreements over funding the government, averting a breach of the debt ceiling and other spending bills— negotiations that will give the GOP an opportunity to press their policy demands. Democrats used control of the House after the 2018 midterm elections to push Trump into accepting many of their priorities, such as expanded domestic spending and paid leave for federal workers.”
The legislative battles could start before the end of this year. Republicans are already pushing extension of three corporate tax breaks— including two that expired at the end of last year and a third that starts to expire next year. Collectively, these three measures would add roughly $600 billion to the federal deficit over 10 years if extended, according to nonpartisan estimates, outstripping the cost of Biden’s student debt relief program (the cost of which many Republicans have criticized) and increasing federal spending at a time of surging inflation.
The 2017 GOP tax cut centered on a massive cut to the rate corporations pay, the cost of which was partially offset by ending corporate tax breaks with the expectation that lawmakers would later prevent them from actually being eliminated. Democrats tried to increase the corporate tax rate as part of their economic legislation this year, but failed in large part because of opposition from Sen. Kyrsten Sinema (D-AZ). They instead passed a minimum tax only on very large corporations.
“The Republicans did not want to look like they were giving too much away to businesses, so they had some of the business relief expire and had some offset by business tax increases,” said Steve Rosenthal, a policy analyst at the Tax Policy Center, a nonpartisan think tank. “Now to come back and extend business relief and reverse the increases would mean further tilting our tax system toward the rich and the powerful.”
Republicans are also planning to push for reductions in government spending, although the exact contours of that policy appear less clear. Bloomberg Government reported Tuesday that the four House Republicans seeking to lead the House budget committee are all exploring changes to Social Security and Medicare to reduce costs to the federal budget, seeking to use the debt ceiling or government shutdown to force the issue.
But analysts say it may be more likely that the extension of the tax cuts is paired with spending increases sought by Democrats. Senate Finance Chair Ron Wyden (D-OR) said in a statement, for instance, that additional business tax relief should only pass if Democrats secure funding for one of their policy priorities, such as Biden’s Child Tax Credit.
That combination would increase the deficit even more than only adding spending or only cutting taxes would.
“What I worry about is the kind of horse trading where Republicans get tax cuts, Democrats get expanded tax credits, and the American people are stuck with the bill,” said Marc Goldwein, senior vice president at the Committee for a Responsible Federal Budget, a nonpartisan think tank that advocates for lower deficits.
Still, the GOP’s push for tax cuts could also undermine their claims to be determined to bring down inflation. Jason Furman, a former Obama administration economist who has been critical of Biden’s spending record, said the GOP plans would increase inflation at a time of the fastest price hikes in decades.
“The corporate tax cuts the Republicans are pushing would add to inflation, add to the deficit, and do little or nothing for economic growth,” said Furman, now a professor at Harvard. “They were a budget gimmick to start with. Extending them without paying for them now would be doubling down on the original gimmick.”
Every poll I’ve seem this cycle shows that peoples’ top concerns are financial and the economy. It should be the perfect battleground for Democrats. Instead, the Wall Street whores who are leading them— Sean Patrick Maloney, Hakeem Jefferies, Chuck Schumer— are taking them in the other direction, away from the economy, into battles, important but less concerning to most voters, about abortion, democracy, gender identity, racial justice…
Last week Andrew Perez and David Sirota vigorously pointed out that “Republican candidates and political groups have spent $44 million on TV ads focused on the economy and inflation since Labor Day… [while] Democrats have spotlighted these issues in just $12 million worth of ads, less than 7 percent of the party’s total ad spending during that time. The party has put another $18 million into ads mentioning jobs and infrastructure— but overall, Republicans are significantly outspending them on messaging around economic issues. The takeaway is clear: Caught between a bad economy and not wanting to offend big donors, Democrats have not aired a unified populist message hammering the business profiteering fueling inflation. Instead, they have spent much of their resources— $67 million— on ads related to abortion rights, a topic of heightened significance after the repeal of Roe v. Wade, but one that does not raise the ire of their corporate sponsors nor generate as much interest from midterm voters this year… The discordance between voters’ economic anxiety and Democrats’ ads is so acute, that even one of the party establishment’s own voices recently spoke up to sound an alarm:
Americans’ focus on the economy in the midterms should come as no surprise, given that government figures show workers are facing the harshest cost-of-living conditions in a quarter century, and a staggering number of Americans are having trouble paying their bills.
“A majority of workers are finding their wages falling even further behind inflation,” said a recent Federal Reserve study, issuing an uncharacteristically loud warning for the typically muted bank. “While the past 25 years have witnessed episodes that show either a greater incidence or larger magnitude of real wage declines, the current time period is unparalleled in terms of the challenge employed workers face.”
…It’s not clear how the Fed’s actions will drive down the costs of basic necessities like rent, food, or health insurance. In fact, higher interest rates may be exacerbating the housing crisis.
Thanks to the rate hikes, Americans are facing these higher costs with reduced labor power and declining wages, as inflation continues to get worse. If the Fed keeps increasing rates, it will inevitably lead to higher unemployment, too.
Meanwhile, corporations continue to enjoy record profits, which has been the primary driver of inflation all along.
As for Bernie, he’s been sounding the alarm for Democrats loud and clear: campaign on the economy. Sunday he was on Meet The Press making the same case. Take a look:
About a month and half ago Bernie warned the Democrats in an OpEd he did for The Guardian that if they don’t compete on economic issues, they’ll be ceding the working class to the Republicans. “Let’s be clear,” he wrote. “The most important economic and political issues facing this country are the extraordinary levels of income and wealth inequality, the rapidly growing concentration of ownership, the long-term decline of the American middle class and the evolution of this country into oligarchy.”
It would unimaginable for Wall Street puppets— New Dems and Blue Dogs and characters like Hakeem Jeffries, Sean Patrick Maloney, Pete Aguilar who are calling the shots— to run on that kind of a populist narrative. Those people underwrite their careers. The working class doesn’t.
When Bernie wrote that “We know how important these issues are because our ruling class works overtime to prevent them from being seriously discussed,” he was certainly aware that his position is not the majority position inside the Democratic Establishment. “They are barely mentioned in the halls of Congress, where most members are dependent on the campaign contributions of the wealthy and their Super Pacs. They are not much discussed in the corporate media, in which a handful of conglomerates determine what we see, hear and discuss. So what’s going on?”
We now have more income and wealth inequality than at any time in the last hundred years. In the year 2022, three multibillionaires own more wealth than the bottom half of American society– 160 million Americans. Today, 45% of all new income goes to the top 1%, and CEOs of large corporations make a record-breaking 350 times what their workers earn.
Meanwhile, as the very rich become much richer, working families continue to struggle. Unbelievably, despite huge increases in worker productivity, wages (accounting for real inflation) are lower today than they were almost 50 years ago. When I was a kid growing up, most families were able to be supported by one breadwinner. Now an overwhelming majority of households need two paychecks to survive.
Today, half of our people live paycheck to paycheck and millions struggle on starvation wages. Despite a lifetime of work, half of older Americans have no savings and no idea how they will ever be able to retire with dignity, while 55% of seniors are trying to survive on an income of less than $25,000 a year.
Since 1975, there has been a massive redistribution of wealth in America that has gone in exactly the wrong direction. Over the past 47 years, according to the Rand Corporation, $50 trillion in wealth has been redistributed from the bottom 90% of American society to the top 1%, primarily because a growing percentage of corporate profits has been flowing into the stock portfolios of the wealthy and the powerful.
During this terrible pandemic, when thousands of essential workers died doing their jobs, some 700 billionaires in America became nearly $2tn richer. Today, while the working class falls further behind, multibillionaires like Elon Musk, Jeff Bezos and Richard Branson are off taking joyrides on rocket ships to outer space, buying $500m super-yachts and living in mansions with 25 bathrooms.
Disgracefully, we now have the highest rate of childhood poverty of almost any developed nation on Earth and millions of kids, disproportionately Black and brown, face food insecurity. While psychologists tell us that the first four years are the most important for human development, our childcare system is largely dysfunctional – with an inadequate number of slots, outrageously high costs and pathetically low wages for staff. We remain the only major country without paid family and medical leave.
In terms of higher education, we should remember that 50 years ago tuition was free or virtually free in major public universities throughout the country. Today, higher education is unaffordable for millions of young people. There are now some 45 million Americans struggling with student debt.
Today over 70 million Americans are uninsured or underinsured and millions more are finding it hard to pay for the rising cost of healthcare and prescription drugs, which are more expensive here than anywhere else in the world. The cost of housing is also soaring. Not only are some 600,000 Americans homeless, but nearly 18m households are spending 50% or more of their limited incomes on housing.
It’s not just income and wealth inequality that is plaguing our nation. It is the maldistribution of economic and political power.
Today we have more concentration of ownership than at any time in the modern history of this country. In sector after sector a handful of giant corporations control what is produced and how much we pay for it. Unbelievably, just three Wall Street firms (Blackrock, Vanguard and State Street) control assets of over $20 trillion and are the major stockholders in 96% of S&P 500 companies. In terms of media, some eight multinational media conglomerates control what we see, hear and read.
In terms of political power, the situation is the same. A small number of billionaires and CEOs, through their Super Pacs, dark money and campaign contributions, play a huge role in determining who gets elected and who gets defeated. There are now an increasing number of campaigns in which Super Pacs actually spend more money on campaigns than the candidates, who become the puppets to their big money puppeteers. In the 2022 Democratic primaries, billionaires spent tens of millions trying to defeat progressive candidates who were standing up for working families.
Dr Martin Luther King Jr was right when he said: “We must recognize that we can’t solve our problem now until there is a radical redistribution of economic and political power” in America. That statement is even more true today.
Let us have the courage to stand together and fight back against corporate greed. Let us fight back against massive income and wealth inequality. Let us fight back against a corrupt political system.
Let us stand together and finally create an economy and a government that works for all, not just the 1%.
Bernie is closing out the cycle campaigning for candidates who are making the economic case and who do have a chance to win in November like Summer Lee in Pennsylvania and Greg Casar and Michelle Vallejo in Texas.