Yesterday, the Census Bureau released a report showing that one in seven Americans is currently living in poverty, and that the median income decreased by nearly five percent during the last decade. At the same time, Congress is debating whether to adopt President Obama’s plan to allow the Bush tax cuts for the richest two percent of Americans to expire on schedule, or whether to extend the entire package of cuts as Republicans desire.
Sen. Evan Bayh (D-IN) has adopted the Republican line when it comes to the Bush tax cuts, even though he likes to style himself as a deficit-hawk. Today, MSNBC’s Chuck Todd asked Bayh about the poverty data, and whether there is a disconnect between the real economic pain that people are feeling and lawmakers squabbling over tax rates for the wealthy. Bayh agreed that there is a disconnect, but then concluded that the poverty increase means lawmakers should forget about “fairness and things like that” and cut taxes for the rich:
TODD: Yesterday, the Census came out and said one in seven Americans are living below the poverty line. Do you look at that story today — you know, you open up your USA Today, right, and you see that story — and you see Washington is debating the tax rates for the wealthy, and you sit there and say, isn’t that a disconnect in America right now?
BAYH: It is a disconnect, Chuck. What we need to be focused on is growth, how do we create jobs, how do we expand businesses. That needs to be job one right now. And all these other issues involving, oh, fairness and things like that can wait.
So Bayh thinks that Congress should forget about:
— Income inequality, which is the worst its been since 1928. Currently, the top one percent of households make nearly 25 percent of the total income in the country. 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.”
In order to:
— Borrow and spend $830 billion on the richest two percent of households. Extending the Bush tax cuts for the rich will give a millionaire an annual tax cut of $128,832, which is nearly two and a half times the median household income.
Bayh conceded that the top two percent of earners doesn’t include many small businesses, but said that we should spend more than $800 billion to cut their taxes anyway, because “we want them doing more hiring, more investing, and at least hanging in there from a consumption standpoint.” However, according to a new study from Moody’s Analytics, the rich are more likely to save the money if their taxes are cut than spend it.