Last week, some members of Congress threatened to stall any further legislation (legislation that is crucial for the government to function smoothly) so tax breaks could be secured for the richest Americans.
Please tell me how these legislators can call themselves deficit hawks and then hold unemployment insurance hostage until tax cuts are passed for the richest two percent of Americans (at a cost of $80 billion over a 2-year period).
It might be argued that these members of Congress believe raising taxes on the rich is a job killer. If only this were true, I might be sympathetic to their stance. But lowering taxes for the richest two percent of households has not been shown to stimulate job growth. They have had the lower taxes for the last nine years, during which unemployment grew!
Lowering middle class taxes, however, has been shown to stimulate the economy because the middle and lower income households spend their tax savings, instead of stashing that savings away or investing in the stock market.
Where is the outrage, America? This recent compromise is such a blatant attempt to passify the rich; members of Congress are unashamedly directing benefits to the wealthiest Americans. The compromise announced on Tuesday sends 33.3% of income and estate tax cuts to the top 1% of income earners. The average income of the top 1% is $1,397,100, while those in the lowest income quintile, with an average income of $13,000, receive just 2.2% of the cuts.
According to Moody's Analytics , simply extending unemployment insurance for one-year without the high income tax breaks would reduce the amount added to the deficit by $30 billion. The party that was so concerned with the deficit, debt and spending initially refused to pass extended unemployment insurance, which puts $1.60 to $2.00 back into the economy for every dollar invested, so they could protect high income tax breaks with a mere return of $.40 per dollar.
Extended federal unemployment benefits kept 3.3 million people out of poverty. History told us that extended federal unemployment insurance had never been discontinued when the unemployment rate remained so stubbornly high, yet its survival was used as a bargaining chip for high income tax breaks. We must not allow members of Congress to hold programs for the middle class and economically marginalized captive in exchange for bonuses for the rich!