Barak Obama says Republicans practice "Social Darwinism"

Class Warfare with Taxes
Class Warfare with Taxes
By Robert Reich
tompaine.com
Thursday 08 December 2005

Tax bills now wending their way through the House and Senate would cut about $60 billion in taxes next year. But there's a huge difference between the two. The biggest item in House bill is a two-year extension of the president's tax cuts on stock dividends and capital gains. The House bill doesn't touch what's called the Alternative Minimum Tax (AMT). By contrast, the biggest item in Senate bill is temporary relief from the AMT. But the Senate bill doesn't extend the dividend and capital gains tax cuts.

No legislative choice in recent years has so clearly pitted the super-rich against the suburban middle class. Most of benefits of the House's proposed extension of the dividend and capital gains tax cuts would go to the top one percent of taxpayers, with average annual incomes of more than $1 million. Most of the benefits of the Senate's cut in the AMT would go to households earning between $75,000 and $100,000 a year, who would otherwise get slammed.

The AMT was enacted more than three decades ago to prevent the super-rich from using tax breaks to avoid paying income taxes. But it's now the super-rich who are making off like bandits, while the AMT is about to hit the middle class. That's because the AMT was never indexed to inflation, which means it's starting to reach taxpayers considerably below the super-rich.

This year. the AMT will affect more than three million middle-class taxpayers who will no longer be able to deduct state and local taxes or use the child tax credit. Next year, if not adjusted, it will affect ten million more taxpayers. So unless the Senate version of the new tax bill prevails, middle-class taxes will rise-even as the Bush tax cuts of 2001 and 2003 continue to reduce taxes on the very wealthy.

Here's where things get politically interesting. Both groups-the super-rich and the upper middle class-have lots of political clout in Washington, especially in Republican circles. So as these two tax bills move on a collision course, the multi-billion dollar question is: Which group will win?

The likely answer: Both! Here's betting the Senate and House will compromise by extending the dividend and capital gains tax cuts and cutting the AMT. It's an elegant compromise, of the sort Washington is skilled at making. There's only one problem. With it, the budget deficit will explode even more.

The underlying question is, who ends up paying for Iraq, the Katrina cleanup, the Medicare drug benefit, homeland security, everything else? If the House has its way, it won't be the super-rich, who will get their capital gains and dividend tax cuts extended. If the Senate gets its way, it won't be the middle class, who would otherwise be hit by the AMT. If the House and Senate compromise by giving both groups what they want, there's only one group left.

That group is the poor and near-poor. Cut more taxes on the super-rich and the middle class, and the only way Congress can say it's grappling with the soaring budget deficit is to cut more programs for the poor. That means fewer food stamps, less Medicaid and vanishing housing assistance.

Of course, this won't be nearly enough to shrink the deficit. So in order to extend the tax breaks for the rich and to avoid the AMT, America will have to rely even more on foreigners-from whom we're already borrowing more than $2 billion a day.

In the end, it will be our kids and grandchildren who get the tab, because they'll have to pay foreigners back. And our current political leaders? They couldn't care less-because by then, they'll be long gone.
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Robert B. Reich is the Maurice B. Hexter Professor of Social and Economic Policy at Brandeis University, and was the secretary of labor under former President Bill Clinton.

the taxpayers contribute BILLIONS and private Donations contribute BILLIONS and you are trying to tell us that these local politicians and the local citizens can;'t figure out how to rebuild or relocate?

And this is GW's fault HOW???

If the local Pols and the citizens themselves can not fix THEIR homes, then they are either lazy, stupid, corrupt or all 3.

Obama should not be criticizing the govt, he should be criticizing the local pols and the citizens themselves.

Haven't people figured it out yet.Anything that goes wrong is the gorernments fault. And, It's always GW's fault.
Ever since Roosevelt brought in social programs, people have demanded more from the government. I agree that there needs to be some social programs, but they are there fora safety net, not as a way of life. Perhaps we should limit welfare to 12 months and make it a fixed level, regardless of how many children there are.
All of this and when Democrats where in "power" they did not accomplish one thing.

I think we could regurgitate the same old tired arguments for either side but let me just throw this thought out there. The New Deal came about because it had to. If the government doesn't step up, people will mobilize in unions, churches, ethnic groups, and gangs. Conservative folks will say that's how it should be, and my tendency is to agree. But from a government's point of view, you don't want these groups competing with your authority. It's about power. If people's loyalties start to align with subgroups and factions because that's the only way for them to feel secure, then the government has a problem. Had there been no New Deal, what do you think might have happened?

Just to be clear, I don't have a strong feeling about it other than either extreme -- too strong or too weak -- is bad. But when I think about it from a government's point of view, one I'm not terribly sympathetic to, it looks a little different.

The PEOPLE should be alligning themselves with the LOCAL GOVT and using the resources the FEDERAL GOVT provided to REBUILD THEIR OWN neighborhoods.

Why are the LOACAL POLS waiting for the FEDS to get involved in any actual rebuilding??

Well maybe all the PEOPLE are gone along with their JOBS and the tax base for the LOCAL GOVT is diminished and it costs an awful lot of money to REBUILD and the FEDERAL GOVT agencies prevented them from returning to their homes until fairly recently. I don't know what they're waiting for there but I can imagine that not one city in this nation could recover from a disaster like that without federal assistance. I think what Obama is referring to reaches a lot further than New Orleans.

Re: Barak Obama says Republicans practice "Social Darwi

If only he was right. The Republican boom in government spending is now almost as big as the "Great Society" expansion under Johnson.

That's a good question. I think the answer depends on what the alternative would have been. In one alternative scenario, the Federal Reserve Bank wouldn't have done the opposite of the job it was created to do, and there would never have been a Great Depression to get out of. When the liberal side of this argument says that government intervention got America out of the Great Depression, it usually fails to mention that government intervention probably created the Great Depression in the first place.

In another alternative scenario, Hoover would have been re-elected. In that case, America would have seen a very careful extension of the progressive-society legislation he had implemented in his first term. In my view, that probably would have worked less bad than the New Deal. But since voters in that alternative scenario wouldn't have known how the New Deal actually did, they might have voted down the Republican platform for an even more radical program at some later election. What the conservative side of this argument usually forgets is how many voters had (falsely) seen laissez-faire as a failure, and (even more falsely) fascism and communism as successes. Therefore, as detrimental as Roosevelt was to the laissez-faire society America had become since the reconstruction, he may well have prevented worse.

Re: Barak Obama says Republicans practice "Social Darwi


The growth in government spending does not necessarily mean that the Republicans are not attempting to dismantle the regulatory agencies and oversight agencies which have grown up since 1929. In fact, that has been a prime directive of Reagan Republicanism. The growth in spending by this Congress has been, more than anything else, and expansion in "pork"--spending more and more federal dollars through existing agencies and programs to enhance the image of incumbents through new allocations of tax dollars to their districts.

I agree -- and take it that you, I, and Herbert Spencer all dislike that kind of pork.

But as Mr. Reich indicates, the really interesting figure to watch will be the "debt on the national debt position". I'm afraid that this one is going to turn pretty ugly pretty soon.

I'd say it's butt-ugly already . . .

... and the butt-ugly mentality that created all this seems to spread throughout the world. Mr. Schröder, our former chancellor, just accepted a well-paying job at a Russian oil company he had helped make rich in an internationally controversial decision.

Miss Angela will want to get busy and set up her retirement fund as well, i take it?

We'll see. It certainly would help her that Germany has no real opposition.

my opinion is, conservative Christians should be told that the GOP is "Darwinist," so they'll vote for Democrats from now on.

That's a pretty good answer.

Re: Barak Obama says Republicans practice "Social Darwi

In every election, Republican candidates proclaim that "government is the problem, not the solution." And once they are in office, they spend most of their time trying to prove it.

Good line, Joe.