"GOP Rep. Calls For Tax Cuts For The Wealthy, Tax Hikes For Everyone Else, And A Hit To The Economy"
Tea Party Rep. Kevin Brady (R-TX) went on CNBC today and within the course of about two minutes managed to call for extending the Bush tax cuts for the wealthy, while also hiking taxes on lower-income and working Americans. When asked by the host what he thought should be done about the upcoming “fiscal cliff,” Brady expressed frustration over the possibility that taxes could be hiked on “job creators,” the Republicans’ euphemism for the wealthiest 2 percent of the country:
BRADY: I think it’s irresponsible to drive off this fiscal cliff… What I worry about is the false choice we’ve been given right now which is either drive off that cliff and risk another recession, or raise taxes on the job creators and the professionals that actually would help get us out of the [economic hole].
A minute later, the host asked Brady what he thought about Social Security, and specifically whether he thought the payroll tax cut that was enacted in 2011 should be extended for another year.
One, the payroll tax holiday is blowing a hole in Social Security, which by the way has faced the largest deterioration in one year than in the last twenty years. And the disability program will go bankrupt in just four years. So clearly we can’t, as a nation, keep diverting one sixth of the revenue stream to that important program.
The payroll tax cut is not “blowing a hole” in Social Security’s finances. The language specifically uses general revenue to contribute to Social Security’s trust fund in lieu of the lost payroll tax revenue. The payroll tax is also regressive and thus falls especially hard on lower-income and working-class Americans — the Economic Policy Institute found that the payroll tax cut’s expiration would be one of the biggest hits to the economy in the upcoming fiscal cliff.
Conversely, EPI’s analysis also determined that, on a per dollar basis, allowing the Bush tax cuts to expire on upper income earners would do less damage to the economy than any piece of the fiscal cliff other than letting the estate tax cut expire. Even allowing the Bush tax cuts for middle and lower income Americans to expire would do more harm. So Brady is effectively calling for a tax hike on working Americans and a major hit to the economy, even as his party continues to insist on maintaining the Bush tax cuts for the wealthy. His preferred policy not only benefits the wealthy at the expense of everyone else, it’s also counterproductive to his own ostensible economic goals.