The Bush tax cuts are scheduled to expire in January, and since he was on the campaign trail, President Obama has expressed a desire to preserve the cuts for the middle class while letting tax rates for the wealthy reset to where they were during the Clinton administration. Most Democrats in Congress have embraced that proposal.
Conservative lawmakers and pundits, however, have been fearmongering that allowing the tax cuts for the wealthy to expire will kill job creation and small businesses (despite the fact that fewer than 2 percent of small business owners will be affected). “Republicans must emphasize that they stand for small and medium-size business,” wrote Karl Rove in an op-ed today. “A GOP growth agenda would keep intact the 2001 and 2003 tax cuts.”
Last night on CNBC, Wall Street Journal editorial board member Stephen Moore took this one step further, saying that he can’t “see the sense” of allowing cuts for the rich to expire, and then advocating that taxes be raised on the poorest Americans in order to finance tax cuts for the rich and corporations:
I just don’t see the sense of this. In fact, if I could have my ‘druthers, I’d raise the ten percent tax rate to fifteen percent and lower the [top] rates…Let’s bring the [corporate] rate down.
This is a stunning admission from Moore, as he explicitly advocated raising the lowest tax bracket while simultaneously cutting the highest. But he’s not the only one on the right who would like to see such a plan implemented. Rep. Paul Ryan (R-WI) has crafted a budget plan that raises taxes on 90 percent of Americans while cutting them for the richest 10 percent.
Adopting such a plan would only exacerbate income inequality that is already the worst it has been since the 1920′s. According to the latest data, “the gaps in after-tax income between the richest 1 percent of Americans and the middle and poorest fifths of the country more than tripled between 1979 and 2007.” The top 1 percent of families now receive nearly 25 percent of the country’s income, after earning less than 10 percent in the 1970s.
At the same time, tax cuts for the rich have pushed the difference in tax burden between the wealthy and the middle class to the smallest in modern history. In fact, this year the Bush tax cuts will give millionaires more in tax breaks than 90 percent of Americans will make in total income.
Retaining the tax cuts for the rich in a time of long-term structural deficits and vast income inequality would be bad enough. To actually cuts those rates while raising rates for those on the bottom of the income scale would be unconscionable.