Thursday, December 2, 2010

Senate Republicans Hold Congress Hostage For Tax Cuts For Rich

All current Senate Republicans have signed a letter pledging to hold congress hostage until they get tax cuts for all Americans, not just for those making under $250,000. Economist Mark Thoma doesn't think that Republicans are receiving the message intended by American voters in the past election. See the following post from Economist's View.

Republicans have decided to block all bills unless they get their way over extending tax cuts for the wealthy:
Senate GOP pledges to block all bills until tax dispute resolved, by Alan Silverleib, CNN: Senate Republicans promised Wednesday to block legislative action on every issue being considered by the lame-duck Congress until the dispute over extending the Bush-era tax cuts is resolved and an extension of current government funding is approved.

All 42 Senate Republicans signed a letter to Senate Majority Leader Harry Reid, D-Nevada...

Democrats and Republicans disagree sharply over whether the current tax rates should be extended just for families earning $250,000 or under per year, or should be extended for everyone regardless of income. ...

Reid blasted the GOP letter on the Senate floor Wednesday morning, calling it part of a "cynical" and transparent" Republican strategy to "obstruct" and "delay" legislative progress while blaming the Democrats for failing to effectively govern.

"Last month, the American people issued their verdict on the Democrat's priorities," replied Senate Minority Leader Mitch McConnell, R-Kentucky. ...
I think Republicans are misreading the message of the election, especially if they think it was a call to extend tax cuts for the wealthy. Democrats should say no, we're not giving in. If taxes go up for most people, it's the GOP's fault for not having the courage to fund the tax cuts when they were first enacted, and for refusing to go along with an extension for the majority of households.

If they are so worried about the "a job-killing tax hike" discussed in their letter (a distinctly Keynesian perspective by the way), then use the money gained from allowing the tax cuts to expire for the wealthy to fund an extension of the Making Work Pay tax cuts in the stimulus package that went to middle and lower class households. The GOP is refusing to extend the Making Work Pay tax cuts, apparently the jobs lost when taxes go up for the non-wealthy don't count. Since these tax cuts are likely to result in more spending than tax cuts for the wealthy, this would increase rather than decrease jobs. If the GOP really cares about jobs, they'll get on board. If they block the legislation, as they most likely would, then we'll see who is reading the "verdict" from the election correctly.

This post has been republished from Mark Thoma's blog, Economist's View.

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