On tax cuts, conservatives won’t even listen to the Oracle
Cambridge Day is part of a project called Voices of MainStreet — a weekly, nationwide Q&A in which editors at the money and lifestyle site MainStreet.com ask questions and bloggers answer them. For this entry, I was asked about the likely extension of the Bush-era tax cuts.
As the second-richest man in America, and by getting there using old-fashioned common sense in his investment strategy and lifestyle, Warren Buffett has become known as the Oracle of Omaha. Meaning when he talks, people listen. On the Bush tax cuts, though — even as Facebook’s Mark Zuckerberg and 17 more of the nation’s richest 2 percent stepped forward Thursday to follow Buffett’s example of giving away half their wealth — America’s conservatives have stopped listening.
“Quit speaking for all those 2 percenters,” said Neil Cavuto of Fox News on Nov. 22, leading a networkwide charge against Buffett’s Giving Pledge. “And while you’re at it, quit speaking for even millionaires now. Maybe they’re against paying more now, not because they can’t afford to, but because they simply don’t want to.”
Conservatives in Congress don’t want to hear it either. They won an agreement to extend tax cuts for the nation’s richest, grudgingly doing the same for benefits for the long-term unemployed in return. As The New York Times noted, at least a quarter of the tax savings will go to the wealthiest 1 percent of the population, when U.S. Census data released last week showed the gap between our richest and poorest is already the widest in history.
Even though congressional conservatives cite out-of-control deficits for their eagerness to hack away at government spending, the extension of Bush-era tax cuts for those earning more than $250,000 per year will help add $900 billion to a $1.3 trillion federal deficit. They insist on keeping those top-rate tax cuts because the people getting them are the ones creating jobs.
I’ve never seen the facts to back that up.
When George W. Bush replaced Bill Clinton as president in January 2000, there was an unemployment rate of 4.2 percent, a 29-year low. When President Barack Obama replaced Bush in January 2009 long after tax cuts in 2001, 2002 and 2003, the unemployment rate was 7.6 percent. There was a net gain of 22.7 million jobs during Clinton’s years in office, according to the Department of Labor’s Bureau of Labor Statistics, and only 1.08 million during Bush’s two terms, despite those three rounds of tax cuts. Bush-era job growth generally lagged behind population growth, with economics writer Dave Manuel breaking it down as 10 jobs added for every 100 new members of the population versus Clinton’s record of 98 jobs per every 100 new members.
Those tax cuts — and two wars, with the arguably unnecessary one in Iraq costing $751 billion as of September, according to a Congressional Research Service report — also helped Bush take $5.6 trillion in federal debt at the start of his presidency and turn it into $10 trillion at the end.
It’s kind of astonishing that despite these figures, and three decades after David Stockman revealed President Ronald Reagan’s supply-side economics as “always a Trojan horse to bring down the top rate” of taxation, conservatives are still pushing, and getting traction on, tax cuts for the wealthy.
Bush started pushing for tax cuts on the campaign trail, during our country’s good times. “If there is a recession, it’s important to cut the taxes to make sure our economy grows. It’s also important to cut the taxes when there’s apparent times of plenty as an insurance policy against an economic slowdown,” Bush said on Jan. 6, 2000, during a New Hampshire debate.
(That’s one insurance policy for which we definitely overpaid.)
His opponent, John McCain, called Bush’s tax cut plan “fiscally irresponsible.” Illinois Republican Ray LaHood, now Secretary of Transportation but at the time a member of the House of Representatives, was also a skeptic. “The polls showed the American people weren’t interested in that big huge bill,” he said at the time of the Bush proposal, based on a suddenly quaint reading of the electorate. “They were interested in a balanced budget and paying down the debt. We were just getting pulverized on this ‘tax cut for the rich’ stuff.”
Given that, the lack of facts backing up claims of tax cut-based job growth and supply-side economics in general and conservatives’ claimed interest in cutting the deficit, you’d think there would be general applause when Buffett acknowledges the very rich “have it better than we’ve ever had it … I think people at the high end, people like myself, should be paying a lot more in taxes.”
Nope. Certainly not in Congress.
And the response from Fox News?
“Quit lecturing,” Cavuto said.