Top 1% tax cuts worth more than bottom 99% salaries
by David Atkins
Via Pat Garofalo at Think Progress, another depressing data point about income inequality in America:
As Occupy Wall Street protestors continue to demonstrate across the country, congress’ fiscal super committee failed to craft a deficit reduction package due to Republican refusal to consider tax increases on the super wealthy. In fact, the only package that the GOP officially submitted to the committee included lowering the top tax rate from 35 percent to 28 percent, even as new research shows that the optimal top tax rate is closer to 70 percent.
Sen. Patty Murray (D-WA), who co-chaired the super committee, explained that the major sticking point during negotiations with the GOP was what to do with the Bush tax cuts. With that in mind, the National Priorities Project points out that those tax cuts this year will give the richest 1 percent of Americans a bigger tax cut than the other 99 percent will receive in average income:
The average Bush tax cut in 2011 for a taxpayer in the richest one percent is greater than the average income of the other 99 percent ($66,384 compared to $58,506).
“The super committee failed to grapple with the extraordinarily costly Bush tax cuts for the richest—tax policies that, according to the Congressional Budget Office, cost more in added federal debt than they add in additional economic activity,” explained Jo Comerford, NPP’s Executive Director. Frank Knapp, vice chairman of the American Sustainable Business Council, added in a statement yesterday, “the high-end Bush tax cuts are a big part of the problem – not the solution…It’s obscene to keep slashing infrastructure and services for everybody on Main Street to keep up tax giveaways for millionaires and multinational corporations.”
As Digby and I have often said in the past, making significant cuts to Social Security and Medicare in exchange for tax increases is a bad deal regardless. On the other hand, our political system is built on compromise and sausage-making.
But any sort of compromise being remotely considered by Democrats must start with ending the Bush tax cuts for the wealthy. If Republicans won't cooperate, there's no sense even talking about a deal. Better to do nothing and simply let the triggers go off, and let the tax cuts expire through inaction.