While Mitt Romney was over in Europe embarrassing himself, President Obama was back in Washington, participating in the same class warfare that has plagued both parties when it comes to taxes.
As it stands now, there are a set of tax cuts set to expire at the end of the year, The Economic Growth and Tax Relief Reconciliation Act of 2001 and The Jobs and Growth Tax Relief Reconciliation Act of 2003, the former deals mostly with income tax rates, while the latter covers capital gains and dividends.
The two parties have been fighting over these tax cuts for about two years now. The Democrats have maintained that they only want them extended for couples and individuals making under $250,000 and $200,000 a year, while Republicans would rather see them stay in effect for everyone regardless of how much money they bring in.
In typical political fashion, both sides have ramped up the rhetoric to defend those positions. Republicans have been going around the country claiming that Obama and the Democrats want to take money, in the form of taxes, from corporations, small businesses, and wealthy individuals (aka, the job creators), so they can invest it in more failed social programs for poor people who sit around all day doing nothing for themselves.
Gov. Bobby Jindal summed this position up during his last appearance on The O’Reilly Factor when he said, “We’re creating an entitlement culture in this country. And what I worry about is that we’re going to have more people who are in the cart than people who are pulling the cart.”
For their part, Democrats have been launching their own version of class warfare, just from the opposite perspective. For them, it’s not that the poor don’t want to do anything for themselves. The problem is that the job creators just aren’t trickling any jobs down. Instead, the 1% (aka, the rich) are hoarding their money, either in tax shelters or bonuses that are shuffled around from one CEO to another, while the 99% (aka, the middle class and poor) work harder for what they get, if they work at all.
President Obama summed this position up in his Weekly Address when he said, “We’re still paying for trillions of dollars of tax cuts that benefited the wealthiest of Americans more than anybody else, tax cuts that didn’t lead to the middle class jobs or the higher wages we were promised, and that helped take us from record surpluses to record deficits.”
There are truth and lies in the positions of both sides. Republicans are right to worry that some people are becoming too dependent on government programs, instead of having the financial discipline or work ethic to make a living for themselves.
A case in point is the yearly-proposed $1 trillion budget deficit. Every year, the government goes more and more into debt (the total right now is approaching $16 trillion) partly because it subsidizes everything from cell phone purchases, to home, car, and student loans, to retirement benefits, down to healthcare and grocery bills.
But at the same time, Republicans have to acknowledge that the government, at times, treats corporations, investment banks, and Defense contractors as if they were welfare recipients, so if the party wants to set an example in one segment of the population, they should do the same in the other.
Democrats, for their part, are also right to worry about the wealth distribution in this country, because the only thing stopping the U.S. from becoming a go-for-what-you-know system of social Darwinism is the tax code. Sharing wealth via taxes is what makes a group of individuals united enough to be called a country. And the police departments, fire departments, highways, and roads are a result of that sharing. But Democrats need to realize that chipping in for common goals can only go so far. Just because there’s a social ailment doesn’t mean a government program is needed to fix it. Inequality isn’t always a dirty word.
As of today, citizens shouldn’t panic just yet. The present tax debate isn’t a make or break moment for the country. Sooner or later, though, before default or inflation becomes apparent, the two parties are going to have to reach some sort of compromise over taxes and the budget. But with the snail’s pace of change that takes place in Washington, and with congress and the president governing as if they’re in a perpetual election, don’t look for that to happen anytime soon.