It Takes an Act of Congress
If congress does nothing, then all the tax cuts will expire at the end of this year and everyone will pay higher taxes, neither party wants that. Unfortunately it literally takes an act of Congress to change the law, or give it another temporary extension, like they did 2 years ago. The problem is, Congress can’t agree on what to do. The Republicans hold steadfast to the ideology of “No new taxes”, and the Democrats believe everyone should “pay their fair share” of taxes, in order to balance the budget and provide services. So, they are at an impasse.Reaganomics
The Republicans argue that taxing the rich will kill jobs. After all, aren’t these rich folks the business owners who hire people? If we tax them at a higher rate, won’t that stifle business growth and prevent them from hiring new workers or even laying off existing ones? This is also known as “Trickle Down Economics” or “Reaganomics”. A term obviously coined during the Reagan era.The Democrats point to the massive deficit George W Bush visited upon us with these tax cutting measures, and that the way to reduce the deficit and continue to provide needed services to the American people is to tap into the billions of dollars in potential revenue that the rich are sitting on. And besides Reaganomics (also known to opponents as “Voodoo Economics”) has never worked.
What’s a voter to do?
It’s no coincidence that the tax cut extension was set to expire in a presidential election year . Both parties are looking for a mandate from the American people. So basically a vote for Mitt Romney means you want to keep the Bush Tax Cuts because you believe it will create jobs, and a vote for Barack Obama means you want the rich to pay taxes at the same rate or greater than you do, because you think that the way to create jobs, is to give the Federal Govt. more money to invest in services and infrastructure that historically have proven to create jobs. Sort of like Roosevelt’s “New Deal” that helped bring us out of the Great Depression.No New Taxes
So, If Reaganomics has never worked, why are the Republicans still trying to sell it? “No new taxes” is a great sound bite. Who likes to pay taxes? But this sound bite is rooted in a deeper conservative ideology. One that I believe places capitalism above the “common good” and the “general welfare” of the American people.The Conservatives believe at their core that Markets should regulate themselves. There should be no barriers to exploiting resources (including labor). Once you understand this core ideology, you can see why Republicans want a smaller, leaner government. A smaller government is a weaker government, one that will not be an effective regulator of business. It will create a void for business and corporations to privatize government services like Medicare and Social Security which represent a huge bonanza of untapped capital for the rich. They have already done this this with the creation of the 401K which effectively places your retirement funds in the hands of speculators.