MIKE BLOOMBERG IN CHINA
As quoted in the Wall Street Journal: ‘If you look at the U.S., you look at who we’re electing to Congress, to the Senate – they can’t read,’ he said. ‘I’ll bet you a bunch of these people don’t have passports. We’re about to start a trade war with China if we’re not careful here,’ he warned, ‘only because nobody knows where China is. Nobody knows what China is.’
NICK KRISTOF IN A BANANA REPUBLIC
From his column in the New York Times: ‘I regularly travel to banana republics notorious for their inequality. In some of these plutocracies, the richest 1 percent of the population gobbles up 20 percent of the national pie. But guess what? You no longer need to travel to distant and dangerous countries to observe such rapacious inequality. We now have it right here at home – and in the aftermath of Tuesday’s election, it may get worse. . . .‘
MITCH MCCONNELL FACES THE NATION
How can you not love a man who stands up for the interests of tobacco companies against the interests of sick children?
He is against virtually everything President Obama is for – everything from campaign finance reform to the Bipartisan Deficit Commission his own party proposed, but then blocked once the President signed on to it – and he says the thing he most hopes to accomplish over the next two years (job creation? infrastructure renewal? an energy policy?) is seeing to it that President Obama serves just one term.
‘A vast majority of Americans feel very, very uncomfortable with this new [health care] bill,’ said Mitch McConnell looking into the ‘Face the Nation’ camera yesterday.
(Actually, according to this poll, 45% ‘strongly favor’ repeal . . . which may not be a vast majority. But when you add in those who merely ‘favor’ repeal, the number goes up to 58%, which is about as vast as a majority can get, I guess, short of complete unanimity.)
One reason so many people hate it is that they have been told relentlessly to hate it. Senator McConnell referred to it yesterday morning as an ‘awful monstrosity’ – the AARP and the AMA both supported passage – and if you can’t trust Senator McConnell when it comes to issues of health, whom can you trust?
Did you watch?
It’s not just he, of course, it’s the whole neatly coordinated Republican Party, which includes Rush Limbaugh, Fox News and all the rest. But he is one of the worst.
Here’s the latest deception: When it comes to borrowing $700 billion over ten years to extend tax cuts on income above $250,000, it’s not millionaires and billionaires the Republicans are looking out for – it’s small business!
This isn’t about helping rich people! This is about helping small business in order to create jobs!
The Republican Party has always been a champion of the worst off, be it through Reagan’s ‘trickle down’ plan (that even George H.W. Bush called ‘voodoo economics’ until he became Reagan’s running mate) or Bush 43’s tax cuts ‘by far the vast majority’ of which, he and his team assured us over and over, would go to ‘people at the bottom of the economic ladder.’
We can’t raise taxes on income above $250,000 – we need to borrow that $700 billion over ten years – because, Senator McConnell said over and over yesterday morning on ‘Face the Nation,’ ‘it would be a mistake to raise taxes on small business in the middle of a recession.’
Mitch McConnell surely knows:
(1) Most small businesses make far less than $250,000 in taxable profit and would thus be entirely unaffected. According to this from the SBA (Table 3, Page 19), 88% of all small business tax returns in 2004 (before things got bad) had gross receipts below $250,000. The taxable net, after all costs of doing business, would have been way lower still.
(2) Allowing the tax cuts to lapse on income above $250,000 will mostly affect wealthy investors who have absolutely nothing to do with small business.
(3) The President has already pushed through 16 tax cuts specifically for small business – over Republican opposition.
(4) The tax rates we’re talking about are (more or less) the same as those that prevailed under Clinton/Gore. At the time, when Clinton pushed them through without a single Republican vote, the Republican predictions were dire, just as they are today.
(Among the mildest: ‘This plan will not work,’ Ohio Congressman John Kasich told CNN in 1993. ‘If it was to work, then I’d have to become a Democrat.’ Well, it did work. Magnificently. The economy grew, unemployment fell, we balanced the budget – but Kasich remained a Republican. Indeed, last Tuesday, riding the wave of economic misery that resulted from his party veering off the Clinton/Gore path, he became Ohio’s next governor!)
(5) Small businesses making more than $250,000 a year in profit will hire more workers if it will make them more money (regardless of the tax rate); not hire more workers if it won’t (even if we dropped their tax rate to zero).
(6) We tried the ‘borrow massively to fund tax cuts for the best off’ strategy. We have the tax rates Senator McConnell espouses. Have they led to job growth? To a resurgent middle class?
The Senator acknowledges none of this. Instead, on ‘Face the Nation,’ he says we’ll be raising taxes ‘on 750,000 of our most productive small businesses, which represents 50% of small business income and 25% of the work force.’
But let’s say you are a hedge fund with 30 employees – a nice small business. And let’s say you made $500 million last year. Your income is figured into Senator McConnell’s small business statistics. But would a hike in your tax rate really cause you to cut back your hiring plans?
Because he includes hugely profitable hedge funds in his figures – and a rock star’s ‘small business’ income – Senator McConnell harks back to the famous homeless shelter whose residents have an average $50 million net worth the day Bill Gates is visiting.
A lot of the Senator’s 750,000 small businesses are dentists and doctors and lawyers and accountants (and financial writers!) who would find themselves taxed as they were under Clinton/Gore. Would this keep them from hiring an additional hygienist or nurse or paralegal if an uptick in their business required one? Remember, the cost of that new employee is a business expense that lowers taxable income. The higher the tax rate, the lower the after-tax cost of adding him or her.
It’s this simple: we can’t afford to extend the tax cuts on income above $250,000. Those who argue that we should borrow $700 billion over 10 years to do it – and who in the next breath rail against the deficit – are at best not thinking very clearly. In McConnell’s case, as he surely understands all this, it is more sinister.
As I quoted Reagan’s own budget director Tuesday: ‘The Republican Party, as much as it pains me to say this, should be ashamed of themselves.‘
MUST SEE TV
And on a tightly related note . . . in case you missed it last week, here is why we have a huge problem making our already messy democracy work. It’s Rachel Maddow on the $200 million a day we are spending on the President’s trip to Asia. (Except: we’re not, anymore than there were death panels or that Iraq attacked us on 9/11. But it doesn’t matter: the right wing has made it fact for a huge segment of our population, an increasing number of whom will now be sitting in Congress.)
And then you have to watch this one, where she actually agrees with Rand Paul on something . . . and makes the fundamental point that adding $700 billion to the deficit by extending tax cuts on income above $250,000 will make the deficit bigger. Not smaller. Bigger. Not smaller. Bigger. Not smaller. Bigger. And yet it is the Republicans’ number one priority. And we really, really, really need to fight it.
Quote of the Day
Your average Wall Streeter, faced with nothing profitable to do, does nothing for only a brief time. Then, suddenly and hysterically, he does something which turns out to be extremely unprofitable. He is not a lazy man.~Fred Schwed, Where Are the Customers' Yachts?
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