Wonk Room » Senate Republicans’ ‘Temporary and Targeted’ Tax Cuts Are Permanently Targeted To The Wealthy

Senate Republicans’ ‘Temporary and Targeted’ Tax Cuts Are Permanently Targeted To The Wealthy

By Pat Garofalo on Feb 2nd, 2009 at 3:29 pm

Senate Republicans’ ‘Temporary and Targeted’ Tax Cuts Are Permanently Targeted To The Wealthy

Yesterday, Senate Republicans took to the morning talk shows to discuss the proposed economic stimulus package, which the Senate will begin debating today. During their respective discussions, both Sen. Mitch McConnell (R-KY) and Sen. Jon Kyl (R-AZ) were adamant about including tax cuts that are properly targeted:

MCCONNELL: We think we ought to lower tax rates for medium- and low-income people….This is a lot of money. If we’re going to spend anywhere near this, Bob, we need to target it directly. It needs to be timely, temporary, and targeted.

KYL: The centerpiece of this is a $500 rebate to folks, about 27 percent of whom don’t even pay federal income tax. That didn’t work last year. It’s not going to work this year. And so that’s not a good place to start.

Of course, there’s a contradiction here, in that McConnell extolled the virtues of targeted tax cuts for lower-income people, while Kyl ridiculed just that sort of cut. More importantly though, the only stimulus proposal that Senate Republicans have come forward with is Sen. Jim DeMint’s (R-SC) “American Option,” which as Ben Furnas noted earlier, is $3.1 trillion in permanent tax breaks for corporations and the wealthy.

If McConnell is really concerned about giving tax breaks to lower-income people then the following statistic — the average tax break for a corporate CEO and a minimum wage worker under the DeMint plan — should be troubling:

As Ali Frick noted over at ThinkProgress, a tax credit to lower-income workers “isn’t some kind of charity; it’s one of the most effective kinds of tax cut in terms of stimulating the economy.” Since stimulus (in part) means boosting consumer demand, not padding the bank accounts of those at the top of the income scale, it makes sense that lower-income people are the ones to focus on. McConnell has the rights words, but as of yet, no action to show that he truly gets it.

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2 Responses to “Senate Republicans’ ‘Temporary and Targeted’ Tax Cuts Are Permanently Targeted To The Wealthy”

jps Says:

McConnell having to argue against buying American is typical of the Republican Party these days: having to grasp at free-trade straws when faced with the impending change from a coal-based to a clean iron-based economy, grabbing at the wrong straws, and going down in flames.

This was disappointing, but then again the AP said, “New Hampshire Gov. John Lynch confirmed the ‘understanding,’ stopping just short of promising to appoint a Republican….”

Anyway, there are always earmarks and budget reconciliation committees. I propose that Pennsylvania might be a good place to start, having as it does the only male Republican senator to support the Ledbetter Act. The Republicans remember what happened to them the last time they tried to shut down the government, and they are certainly gaining no credibility with the nations’ voters or governors by bloc-voting in favor of obstruction after general concessions — however incremental and/or ill-advised — are made. It’s only a matter of time. I hope Reid starts requiring a real filibuster if it comes to that, but the chance that it will is getting slimmer all the time.

Check out Bragg’s new Waiting for the Great Leap Forward lyrics. I especially like the part about tax havens. (Note, if you are at work or being broadcast over FCC-regulated airwaves, there are multiple occurrences of the F-Word.)

Can you believe they are still allowing the Fed to pay interest on banks’ excess reserve balances? That is a direct attack on credit liquidity. You can monitor the situation here. There is absolutely no reason those “0.25″s shouldn’t be “0.00″ or
less. I spoke with Tom Woodward who estimates federal revenue for the CBO about this recently, and it seems the only reason to keep paying interest on excess balances is apparently because the former Treasury Secretary thought it would be better to not use the TARP to rescue homeowners because banks were taking advantage of the interest payments. What would happen if the Fed started charging a fee instead of paying interest for excess balances? The commercial paper market would probably recover, which is good because the Fed only managed to cover $400 billion of the $1.8 trillion that it used to be. Who cares if the Fed’s balance sheet shrinks at this point? It would be nice to have the consumer economy back, and it depends on commercial paper for international shipping. Having the Fed purchase treasury securities would not restore the credit markets. And since the consumer economy is 2/3rds of the U.S. economy, it would make a huge difference.
February 2nd, 2009 at 7:41 pm
George P. Livesley Says:

I just don’t understand the greed of the Republicans. A person making 3.4 million does not need a $320K tax break. A person making $15,000 simply cannot afford to pay taxes, period. Bernie Madof still has a maid!He should have been made to immediately move into an apartment in one of the worse projects in the city. He ruined the lives of many, and he is still living in a palace.

Rush Limbaugh should be barbequed as he is nothing but a fat pig. Hoping that Obama fails! What kind of thinking is that? Bush ruined the country and that corpulent gas bag has the never to hope Obama fails. What the hell is wrong with those people. Karl Grove. He is a kid that even his mother should hate. Indictments need to come down and swoop up George W, Cheney, Condi, Rumsfield, and Ashcroft and they all need to be sentenced to significant terms in the penitentiary for the murder of our soldiers and for other high crimes and misdemeanors too numerous to even attempt to list!

It is difficult to even talk about those people without ranting.
February 3rd, 2009 at 3:29 pm