Attention Republicans: Cutting Services Raises Expenses. That’s a tax hike!
Speaker of the House John Boehner has been leading the GOP’s new battle cry (whine?) that “you don’t raise taxes in a Recession.” Republicans are playing a dangerous game of chicken with the Debt Ceiling, threatening to vote against raising it next month, in hopes that Democrats will “blink first” and capitulate with Republicans… again. And why shouldn’t they? They’ve done this repeatedly since President Obama took office (remember the Lame Duck Congress agreeing to a one-year extension of unemployment benefits in exchange for a TWO-year extension of the budget-busting tax cuts for the Top 2 percent?)
Senator Mitch McConnell repeated this GOP Talking Point on Fox “news” Sunday yesterday with the (reasonable-sounding) claim that “You don’t raise taxes in a Recession.” So instead, they want to bring the budget into balance entirely with cuts. EXCEPT that they don’t want to cut subsidies to big oil, or even a tax break on corporate jets (though continued support for their wars has become iffy.)
So if (short term) Defense cuts are off the table, ending Big Oil subsidies is off the table, and raising taxes on even people who’ve been making out like bandits is off the table, what’s left? “Entitlements”… most of which service the poor.
Utah Senator Orin Hatch announced on the floor last week that, “the poor need to shoulder more of the responsibility”, bemoaning that “The top 1 percent of the so-called wealthy pay 38 percent of all income tax”. Maybe that’s because the Top 1 percent control 42% of all the wealth in this country. Translation: Grandma needs to step up to the plate so Bill Gates can have his tax cut. In Hatch’s mind, this is “shared sacrifice”. (I’d also remind the Senator that some of the biggest corporations paid ZERO in income taxes over the past few years. And what did it get us?)
Lower tax rates don’t translate into job growth. – July 6, 2011
The very argument for corporate tax cuts is that “they create jobs”. But the fact is, No. No they don’t. DEMAND creates jobs. Even if you cut corporate taxes to ZERO, they STILL wouldn’t hire you unless there was an increased DEMAND for their products/services.
So now, the very basis for why corporations need tax cuts is a fallacy. But tax cuts for Consumers is more defensible (though, as Bush’s “tax rebate checks” proved, in a bad economy, people either pay off PAST debts or put the money in the bank, not the economy. It takes GOVERNMENT to spend when consumers cannot). More money in the hands of Consumers means more money to spend, meaning more demand, which translates into more jobs. But when you cut services to the poor & middle class, they end up having to spend more of their money on things that DON’T stimulate the economy (like doctors bills), with less money left over to pour into the economy (and any Right-wingers thinking “spending more on your doctor also goes into the economy”, the doctor isn’t making MORE money, he’s just getting more of it from YOU. The economy isn’t “growing” when you do that.)
Here’s the problem with McConnell, Boehner, and all the other Republicans demanding that we “cut spending” on the grounds that it would hurt the economy to “raise taxes” in a Recession: IF YOU CUT SERVICES, AND PEOPLE END UP PAYING MORE OUT OF POCKET, IT LEAVES THEM WITH LESS MONEY TO PUT BACK INTO THE ECONOMY. How is that not every bit as bad as a tax increase? We’re already seeing this with the increase in gas prices cutting into spending and slowing the economy. If you cut Medicare payments, and Grandma’s co-pays go up, how is that not a “tax increase”? How does that not have the EXACT SAME negative economic impact as raising taxes?
Now Republicans are threatening to not raise the Debt Ceiling, period, demanding that we get by on “budget cuts” alone. I think this cartoon sums it up the best:
God save us all from Conservative “logic”.
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