Wednesday, December 15, 2010

Obama Tax Cuts: The Esau Principle

Remember Esau?

In the Old Testament, Esau was the fraternal twin of Jacob, and the oldest son of Isaac and Rebekah. He was first in line to receive what was then a large inheritance, long before the notion of "estate tax" was a glimmer in anyone's eye, but he sold his birthright to his brother for a plate of lentils.

I can't help thinking of Esau now that the Senate approved the president's extension of all the Bush tax cuts, including those granted to the wealthiest 2% of the population, and wonder if giving up his birthright, the Democratic platform on which he ran, is a wise move for Obama.

Don't get me wrong. Hunger for hunger's sake is never worth it. Compromise is necessary. Arguably, if not for compromise there never would have been a Declaration of Independence, but there comes a time to draw a line in the sand. Sooner or later that time must come. The debate over the keepers of the keys to the safe has only been deferred not resolved.

Just think of what might have happened if the original colonists had decided to compromise with the Brits.

Now the compromised tax plan migrates to the House where it either becomes yet another nail in the coffin of congressional regulation of runaway wealth, or an opportunity to revisit those "new deal" values that have long separated the Democrats from the Republicans.

This is not just about renewing a deficit-building, egregious tax reduction to those who least need it in this country. This is about selling a platform that claims to defend the rights of workers for some crumbs from the table of the financial elite.

This is not just about tax cuts, but a tip of the hat to deregulation, and smaller government where government is most urgently needed.

Just when it looked like we were approaching fiscal sanity with assurances from the Obama administration of greater oversight into dubious bank practices, and lending companies, the deregulators are now the comeback kids. From Rand Paul to Sarah Palin, the mantra of "smaller government" and free markets is merely repackaged trickle down Reaganism. While George W. Bush might like you to think it was his idea, it was actually Ronald Reagan whose supply-side economics first conceived of tax shelter safety nets for millionaires.

But, anyone who views tax cuts to the rich as a way to job creation by way of consumer spending doesn't understand that cutting taxes to the rich will only mean increased spending on yachts, Mercedes, and trips to the Carribean.

The added padding to the pockets of the upper 2% may mean that more Porsches will be sold; stores like Nordstrom's, and Saks will experience a boost, but this will do nothing for consumer sales generally. The best impetus for jobs is to put more money into the hands of the greatest number of Americans who will only be minimally impacted by a one year payroll tax furlough.

Further, this compromise only shows that the stage has been set for when the Republicans regain control in January, and that Congress and federal regulators will go back to being subservient to the banks and big business that put them there.

The man set to replace Massachusetts Democrat Barney Frank, Spencer Bachus, Republican from Alabama, as reported by Raw Story, recently said "In Washington, the view is that banks are to be regulated, and my view is that Washington and regulators are there to serve the banks." And, Rep. Bachus must think that we are there to serve the banks, too.

If so, he is not alone. With their Citizens United ruling, the Supreme Court proves that they are there to serve the corporations and the special interests. Moreover, their support of so-called Second Amendment rights only proves the high court's fealty to the gun lobby.

On December 14th alone, there were two public shootings; one at a school board meeting in Florida where a gunman miraculously missed everyone except himself, and another at a barber shop in a Sacramento mall which took the life of the 30 year old while her two year old waited in the car. This is where that Court ruling took us. Greater entitlement for those who think it's their constitutional right to own, and brandish firearms.

When the Court rolls over for lobbies, and big business, Congress and the president can't be far behind.

Clearly, the resurgence of conservative Republican values nationally doesn't mean complete deregulation. By blocking a challenge to the new law that requires anyone under 18 to notify their parents before obtaining an abortion, a Superior Court judge in Alaska shows that regulation flourishes when it comes to a woman's reproductive choices.

But, those who consider the right to life something that pertains only to embryos will raise their eyebrows at the notion of anyone selling their birthright for a plate of food. Those who say "never let the perfect be the enemy of the good" might think otherwise.

As one who is inclined to opt, when hungry enough, for a plate of lentils over anything on paper, it is hard not to sympathize with Obama in doing what he thinks is right for the neediest among us. The vast majority of working and middle class people would be adversely affected if all the Bush tax cuts would be allowed to expire. When passed by the House, the longterm unemployed will have their benefits extended by another year, a good thing, and the majority of the rest of us will have a one year payroll tax holiday. In the short term, passing this measure is the only sensible thing to do.

But, in the long run, it is not in the best interests of the leader of any party that purports to value economic justice that wants to end a gross, and growing disparity in wealth, to postpone another battle, and risk being known as the president who made the Bush tax cuts permanent. As of today, they are no longer Bush's tax cuts, but Obama's.

This is not to suggest that the president should let all of his predecessor's tax cuts expire, but instead that he take responsibility that those cuts are now his just as Lyndon B. Johnson inherited the war in Vietnam, then escalated it. It is up to the House to insist on those amendments to the tax bill that guarantee the tax breaks to the upper 2% will expire in two years.

The bill must stipulate that the two year extension of tax cuts to the rich are nonrenewable. Yes, that's right--nonrenewable. One simple word can radically change the course of history.

The House might also move to raise the corporate tax to 35%, and enjoin the IRS to collect all back taxes on some 400 companies that received TARP money, which would amount to many millions of dollars.

There must also be an amendment ot the bill to cut take the revenue for the one year payroll tax cut from the defense budget and not from social security. To do otherwise would amount to selling one's birthright not for a plate of food, but for a pile of manure. People who are hungry have a hard time standing on principle, but we sometimes have no choice.

Importantly, too, overturning the "Make Work Pay" tax credit the Obama administration inaugurated in 2008 might actually mean a tax bill for millions of Americans while giving the wealthiest among us a tax break.

Hold on to your birthright, Mr. President. Franklin D. Roosevelt would say if you must strike a deal with the devil, make sure it comes with an expiration date.