The perennial fiscal question that has clouded President Obama's administration — the Republican drive to make permanent the obscenely gluttonous Bush II tax cuts for the super-wealthy — had to become one of the centerpiece issues in this year's presidential campaign. Obama rightly unfurled that banner on Tuesday.
He challenged Republicans to agree, now, to keep in place the Bush II tax cuts for 98 percent of American families with incomes under $250,000 a year, before those cuts expire next year. But he challenged extension of the vast cuts for the wealthiest two percent, where the chief beneficiaries reside: the nation's megamillionaires and billionaires, the top tenth of the top one percent of earners, who capture the lion's share of the dividend and capital taxes benefits under the wildly lopsided Bush II tax cuts.
Obama's proposal is the right thing to do. It's not a cure-all, but it would cross the dividing line in burden-sharing on the road to deficit reduction. And it would appropriately end the charade that George W. Bush adopted to camouflage the unaffordable long-term cost of his high-end tax cuts: that they would expire in 10 years.
It is also needed to fix the tax brackets on gross income that let the ultra-wealthy pay far less, as percentage of their income, than their secretaries. And it's crucial to correcting the tax inequities that have let the richest 1 percent of the population capture more than half of the nation's total income growth since 1993, while the inflation adjusted wages of ordinary Americans have declined steeply in the same period.
It's a just call, as well, because the last three Republican presidents, especially George W. Bush, are undeniably responsible for the bulk of the nation's $14-plus trillion federal deficit. Ronald Reagan and George Herbert Walker Bush contributed most of the $5.5 trillion deficit that greeted George W. Bush when he took office. He then raised the tab to over $12 trillion by the time he left office by putting the cost of his tax cuts, two wars and the Medicare prescription drug plan on the nation's credit card. He left more than $1.5 trillion in the debt pipeline for the wars and his $800 million bank bailout fund.
Yet GOP leaders have adamantly rejected multiple Democratic proposals for a balanced approach to deficit reductions mixing both spending cuts and revenue-raising measures. Their sole solution to their deficit bulge is to whack vital safety programs like Social Security and Medicare, never mind the inequity to middle class wage earners who have paid payroll taxes for decades to finance those needed benefits.
Under pressure from both corporate lobbyists and their misguided tea-party wing — a group whose agenda is bankrolled by billionaire anti-government scrooges like the Koch brothers — Republicans stymied ongoing Obama administration efforts the past three years to put a balanced deficit-reduction plan in place. Last summer, they held the country hostage to a credit crisis over raising Washington's debt ceiling in order to push deep cuts in entitlements and mainstay federal agencies.
Obama staved off the harshest cuts on safety net programs, but the contrived crisis still hurt the economy for a while. Perversely, it also generated precisely the sort of fiscal uncertainty that Republicans otherwise claim is the reason the economy has not produced the more rapid growth they profess to want.
Having purposely weakened the economy just to undermine Obama for partisan reasons, Republicans will now rant that Obama's proposal amounts to class warfare, and that it will hurt job creators and small businesses. It won't do either: 97 percent of small businesses are owned by people in the bottom 98 percent of income. And its a hoax that the trickle-down effect of tax cuts for the ultra-rich will benefit the 99.9 percent of Americans.
If Republicans choose to deny extension of the tax cuts for the broad middle class without inclusion of the high-end tax cuts, they will have to admit what has always been evident: They mainly favor their campaign financiers, the ultra-wealthy.