The Socialism Scare
Recently, the right wing has seized on Sen. Barack Obama's (D-IL) admission that he wants to "spread the wealth around" as evidence that his tax policies are somehow socialist, communist, or Marxist. Sen. Mel Martinez (R-FL) compared Obama's policies to those of Cuba, saying, "Where I come from, where I was raised, they tried wealth redistribution. We don't need that here, that's called Socialism, Communism, not Americanism." House Minority Leader John Boehner (R-OH) said, "You want to talk about socialism. You put these people in office, it's batten down the hatches and watch out." The media have also piled on, with WFTV Orlando's Barbara West asking Sen. Joe Biden (D-DE) during an interview, "How is Sen. Obama not being a Marxist if he intends to spread the wealth around?" Fox News' Sean Hannity said Obama has "doubled down on socialism for America," while Bill O'Reilly admitted that he "wouldn't have said the Marxism thing" but that Obama nevertheless espouses "quasi-socialism." All of these conservatives, however, are distorting the Obama plan, which simply makes the American tax system slightly more progressive -- an idea that the American public solidly supports.
REPEALING THE TOP BUSH TAX CUTS: As the New Yorker noted, "[T]he principle that Obama evinced, which most economists would regard as unexceptionable, can be traced to Adam Smith," who wrote in "The Wealth of Nations," "It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion." Obama's plan is to repeal the Bush tax cuts on the top two federal income tax brackets, raising their rates to 36 percent and 39 percent and from 33 and 36 percent, respectively. This returns them to the levels that President Clinton had set. A new analysis by Citizens for Tax Justice found that only 2.5 percent of Americans would lose any of their Bush tax cuts under the Obama plan. Meanwhile, making all of Bush's cuts permanent, along with the corresponding alternative minimum tax relief, would cost $4.4 trillion by 2018. Research has shown that both private business investment and job growth were significantly stronger under Clinton's tax rates than under Bush's.
AMERICANS FAVOR PROGRESSIVE TAXATION: Ever since the federal income tax was enacted in 1913, it has been progressive; rates have increased proportionally with income. And the income tax is part of an overall tax system that is otherwise regressive. All working Americans pay the payroll tax, as well as various local and state sales and property taxes. Payroll taxes are quite regressive -- the highest earning 20 percent of Americans pay a lower average rate than the lowest earning 20 percent. Additionally, the public strongly favors the concept of progressive taxation: a Financial Times/Harris Poll found that 62 percent feel "the government should tax the wealthy more." A Pew Research Poll released last week shows that the public "agrees with progressives' stance on taxation and rejects the conservative approach." Only 25 percent agree "with the centerpiece of the conservative tax program: making all of the Bush tax cuts permanent." Meanwhile, 37 percent want to repeal tax cuts for the wealthy while keeping the rest of the cuts, and 25 percent want to repeal all of the cuts.
CONSERVATIVE REVERSE SOCIALISM: Conservative economic plans also redistribute wealth, but to the wealthiest Americans in the form of tax cuts that benefit corporations and those in the top income brackets. Yesterday, Boehner unveiled his own economic recovery plan, which is focused on tax breaks that include cutting the top corporate tax rate from 35 percent to 25 percent and suspending the capital gains tax for two years. Sen. James Inhofe (R-OK) proposed a similar "six point economic plan" this month, in which he advocated completely eliminating the capital gains tax and making all of the Bush tax cuts permanent. Some of these provisions are also embraced by former Speaker of the House Newt Gingrich, and they are all propositions from which the overwhelming benefit would go to the very wealthy. As the Tax Policy Center found, 75 percent of the benefit of low taxes on capital gains and dividends "already go to those making $600,000 or more. Half goes to those making $2.8 million or more." Simply cutting the capital gains rate in half gives two-thirds of the benefit to those making $1 million or more. Meanwhile, cutting the corporate tax rate sends $175 billion to America's corporations, and these corporations would have no incentive to reinvest the extra money. As a report by the Center for American Progress found, "economic policies with tax cuts for corporations and the wealthy as their centerpiece have simply failed to produce strong economic growth by a variety of measures," including employment, investment, and wage levels.
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The Environmental Protection Agency and shipping company UPS are joining forces to launch eco-friendly hybrid delivery trucks
THINK
PROGRESS: White House on whether
convicted Sen. Ted Stevens (R-AK)
should resign: No comment.
WONK
ROOM: Six villains of the
economic crisis.
YGLESIAS:
Wild-like negotiations with the Taliban.
FEMINISTE:
The potential human consequences of the proposed abortion ban in South
Dakota.
>
FLORIDA:
"Sense of unease" in some black voters about whether their votes will
count.
CONNECTICUT:
Same-sex
couples able to start marrying on Nov. 10.
MASSACHUSETTS:
State will vote on Tuesday on whether to abolish income tax.
"[W]e don't torture, and we don't."
-- President Bush, 9/6/06
VERSUS
"Army Col. Stephen Henley said [U.S. detainee] Mohammed Jawad's statements 'were obtained by physical intimidation and threats of death which, under the circumstances, constitute torture.'"
-- AP, 10/28/08
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