President Obama renewed his fight over the Bush tax cuts yesterday. He called on Congress to send him a bill that would let those tax cuts expire for those lucky folks making more than $250,000. As you might imagine, this didn’t go over well with Republicans.
“The president’s announcement that he plans on extending (the tax cuts), just for certain classes of Americans — what he’s really saying is that those that are job-creators and small businesses are going to see a massive tax increase,” presumptive Republican presidential nominee Mitt Romney said, “and that will kill jobs.” He added, “The president’s plan is aimed at small business and job creators. It will kill jobs in this country and hurt the middle class,”
So, that got me to thinking. What would the president’s plan looks like as a pie chart?
As the president said yesterday, letting the Bush tax cuts expire for the wealthy would not impact 98 percent of American wage earners and 97 percent of small-business owners.
“The upper-income cuts return $850 billion over 10 years to the Treasury, simply by reverting to the top rates under Clinton, when the wealthy fared perfectly well, the budget balanced, and growth was much stronger and more broadly shared than in the Bush years,” wrote Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities and the former chief economist and economic adviser to Vice President Joe Biden. “The fact that these upper-income increases hit only the top 2% — and that’s considering both households and small businesses — is also important. They won’t hurt the wobbly recovery, as these folks are not income constrained in the first place.”
Bernstein clearly articulates why I will never understand Republican reticence to help the middle class, despite rhetoric to the contrary. As E. J. Dionne points out, a key statement in Obama’s speech yesterday was, “Let's agree to do what we agree on. Right?”