The great GOP scam

This was taken from Democratic underground web site.

Is Obama overturning a hidden foundation of the Reagan “revolt of the haves”? Did Limbaugh “spill
the beans” inadvertently on the evil genius of Greenspan and Stockman–once you look past his far-right “spin” on his tax-burden analysis (“buying votes” rather restoring a semblance of tax fairness after a generation of Reaganism)?

Why do tax cuts for the poor seem to be anathema to Republicans, even though targeting tax cuts disproportionately toward the poor surely would provide the greatest stimulus to the economy?

An idea crystallized in my mind last night after years of thinking about the evil political genius of Ronald Reagan, Alan Greenspan, and David Stockman. The idea is this: much of the Republican political hold on poor working people since Reagan may have come from the very payroll taxes Reagan shifted onto them massively (see below the line in this post), while cutting marginal income tax rates for the wealthiest by two thirds. After Reagan and company shifted the tax burden from the vast incomes of rich people to the meager pay of the poor, the poor would become much more susceptible to Republican anti-tax, anti-government propaganda. But, unlike the rich, the poor never would get relief from their hefty tax increases. This cynical political ploy may have been part of what Stockman called his “SHIFT AND SHAFT” fiscal strategy.

Look carefully at the Republican tax cut plan John Mcain ran on, and that Boehner has adopted (broad details at republicanleader.house.gov/News/ … Single.a…. ). They would change the current 15 percent rate to 10 percent, and cut the current 10 percent rate to 5 percent. Those currently in the 15 percent and 10 percent brackets would get something back, but only those currently above the 15 percent bracket could get the maximum amount ($3400 a year for a married couple filing jointly). The poorest filers of income tax returns–those who currently get the maximum Earned Income Tax Credit–would get NOTHING.

Compare the Obama refundable $1000 tax credit for working families in the bill going through Congress. A flat $1000 credit is the highest percentage of income for the poorest, who cannot afford to save much and would spend most of what they’d get immediately. Obama’s plan is targeted on the people most likely to stimulate the economy with spending, while the Republican plan would give the most to those who’d likely spend the least. IMO the Republican economic wrong-headedness on stimulating the economiy may stem mainly from their fear that tax relief for the poor would make them less susceptible to Republican anti-tax, anti-government propaganda.

Compare my analysis with part of what Rush Limbaugh said last month, according to mediamatters.org/items/200901280001 :

"Media Matters for America Wed, Jan 28, 2009 8:34am ET

Number One voice for conservatism" Rush Limbaugh wastes no time leading assault on Obama

… Limbaugh attacks Obama economic recovery package as effort to ‘buy votes for the Democratic Party’

Following Obama’s reported comments to Republican leaders that ‘(y)ou can’t just listen to Rush Limbaugh and get things done,’ National Review White House correspondent Byron York asked Limbaugh for his response. According to York, Limbaugh responded:

Obama’s plan would buy votes for the Democrat Party, in the same way FDR’s New Deal established majority power for 50 years of Democrat rule. …

From the January 26 edition of The Rush Limbaugh Show:

LIMBAUGH: 'Now, to make the argument about me, folks, instead of his plan makes sense from his perspective. His plan, I think, is pretty much what FDR was trying to do back in the New Deal era. This is about establishing majority power for 50 years of Democrat rule. And it would also simultaneously damage any hope of future tax cuts. If Obama’s version of the stimulus plan goes in, you can forget tax cuts. The deficits are going to be so huge and so numerous and so frequent that the argument for tax cuts in the standard manner can never be won.

His plan would also see to it that a majority of American voters would not pay income taxes, and therefore, a minority of people who would vote for tax cuts will always lose. …'"

IMO, Limbaugh may inadvertently have helped reveal a deep but hidden-in-plain-sight fact about Reaganism and the evil genius of Alan Greenspan and David Stockman.

More on the steal-in-plain-sight Reagan tax burden shift from rich to poor: IIRC from an old book called “The Education of David Stockman”, Alan Greenspan, who was a Reagan campaign economic adviser in 1980, was concerned that the poor did not pay their fair share of taxes! This kind of extremist right-wing fantasyland evidently is where Ayn Rand Objectivist philosphy can lead.

Stockman, who was Reagan’s budget director, realized that drastic income-tax cuts for the wealthy would create a huge deficit “hole” in the long-term budget. Under the ruse of concern for the soundness of Social Security when baby-boomers would start retiring 25 years into the future, Stockman and Reagan put Greenspan in charge of a Social Security Commission. This Commission recommended huge increases in payroll taxes that those above the “income cap” would be spared. However, Greenspan saw to it that, unlike pension deductions for workers in individual States, Social Security payroll tax revenues would not go into pension funds whose sole purpose was payouts to old people. Instead, they would serve to hide budget deficits from absurdly large tax cuts for the rich, and they would be spent just like income tax revenues, for wars, defense waste, and future “tax cuts” for the rich.

Stockman realized that the poor would not like having their tax burden increased. But, and this is the genius part, he may have figured out that such resentment among the poor would make them more susceptible to the GOP’s anti-tax message. Unlike the rich, however, the poor would get no tax relief from Republicans. Add in spurious “social issues” trotted out at every election–but seldom leading to any legislation–that would make many of the poor lean even more toward the Republicans, and the rest is history. Reagan won 49 States in the re-election of 1984, changing the Presidential voting patterns of white workers who’d supported progressive Democrats for 50 years.

And now the Republicans claim Social Security is “going broke”? Very few are even asking what happened to the TRILLIONS FICA took from them over 25 years ostensibly just to prevent the current baby-boomer retirement “crisis”. Reagan, Greenspan, and Stockman concocted such a brilliant scam that most of the “suckers”–poor and middle-class people who voted Republican against their own economic interests for a generation–still don’t even realize they’ve been had."

K: absolutely brilliant.

Kropotkin

all of that is a lie

bike_seat:all of that is a lie"

K: What a complex and in depth analysis of this thread.
You really caught the complexities of what Reagan did.
Whoooo-weeee, I mean I have never seen a more comprehensive
insightful, well documented rebuttel of a post ever.
Great Job bike_seat, you have clearly outdone every
poster that has ever posted here. I am ashamed of
my previous post as being woefully inadequate in comparision to yours.

Kropotkin

it’s not my fault you distort facts and lie through your teeth

Well, I mostly agree with the article. But since its only detractor is Bike Seat, who either can’t or doesn’t want to express why he disagrees with it, I’ll play devil’s advocate.

For one thing, the article is an ad hominem. Ultimately, it doesn’t matter if the republican higher ups believe what they’re saying, or whether they are actually motivated by the same arguments they use to defend their position. If they are making a sound argument about US economic policy, it doesn’t matter if they actually believe it, the argument is still sound.

And I think their argument isn’t obviously unsound. The argument is that taxes are a disincentive, and that by reducing taxes for the wealthy (who in an achievement-based meritocracy are the most productive), we reduce the disincentive for the most productive sector of society. A ‘flat tax’ is fairest because it taxes everyone equally. Poorer workers should have to pay Social Security taxes and other similar taxes, and wealthy people shouldn’t, because poorer people will be the ones that benefit from those social programs, and wealthy people will not.
As with the Democrats, the position is a mix of pragmatic and principled. Pragmatic, because the tax cuts they propose are designed to encourage productivity and reduce disincentives to entrepreneurship, and principled because they can be described as ‘fair’, ‘level’, ‘flat’ (as in a playing field), etc.

Those are the reasons that should be attacked. It’s trivial that we shouldn’t endorse plans because they will manipulate people into voting against their own interests. But that’s not how the plans are being defended, and it’s not obvious that we shouldn’t endorse plans that are practical and fair.

EDIT: Fixed punctuation.

Carleas:Well, I mostly agree with the article. But since its only detractor is Bike Seat, who either can’t or doesn’t want to express why he disagrees with it, I’ll play devil’s advocate.

K: fair enough.

Car. For one thing, the article is an ad hominem. Ultimately, it doesn’t matter if the republican higher ups believe what they’re saying, or whether they are actually motivated by the same arguments they use to defend their position. If they are making a sound argument about US economic policy, it doesn’t matter if they actually believe it, the argument is still sound.

K: I disagree with your assessment that the article is an ad hominem attack. It does mention rush, stockman and reagan but then goes one step further
and talks about what they either said or did. If it had said, rush believes this so it must be… then I would agree with your assessment. Your point also includes a assumption and that assumption is “if they are making a sound argument about US economic…” I would disagree they are making a sound argument and thus what they have is cynical statements only made to score points.

C: And I think their argument isn’t obviously unsound. The argument is that taxes are a disincentive, and that by reducing taxes for the wealthy (who in an achievement-based meritocracy are the most productive), we reduce the disincentive for the most productive sector of society. A ‘flat tax’ is fairest because it taxes everyone equally. Poorer workers should have to pay Social Security taxes and other similar taxes, and wealthy people shouldn’t, because poorer people will be the ones that benefit from those social programs, and wealthy people will not.
As with the Democrats, the position is a mix of pragmatic and principled. Pragmatic, because the tax cuts they propose are designed to encourage productivity and reduce disincentives to entrepreneurship, and principled because they can be described as ‘fair’, ‘level’, ‘flat’ (as in a playing field, etc.

K: Again you have made several assumptions. One is that the wealthy is the most productive sector of society. the a second assumption is that we
have an achievement-based meritocracy. I only need to point out that in the list of the fortune magazine 400 wealthiest Americans, someone went
through and discovered that 50% of the list were people who at BIRTH could have made the list. They were born into substantial wealth which had
nothing to do with their being achievement based. think of the Ford family. Billionaires and yet their only claim to fame is being born a ford,
nothing more. they had nothing to do with the creation of the wealth. A flat tax in theory sounds like a decent proposal, but in reality is just wrong. Such diverse thinkers as Adam smith and Karl Marx both felt that a progressive tax rate was the fairest way to equalize the inevitable tax rate. A flat tax simply rewards the one who happens to be wealthy at the time of the implement of the flat rate. Any understanding of taxes must begin with who benefits from taxes?
The middle and lower class are the groups that benefit from taxes. The wealthy do not and thus that explains their hatred of taxes.

C: Those are the reasons that should be attacked. It’s trivial that we shouldn’t endorse plans because they will manipulate people into voting against their own interests. But that’s not how the plans are being defended, and it’s not obvious that we shouldn’t endorse plans that are practical and fair.
[/quote]
K: One of the points that has been lost in this country is a simple one. We have a majority based system. And this means the majority rules.
the rules are created to benefit the majority, that is point of majority based system. Right now, we seem to think we have to pander to the wealthy
but we don’t, they aren’t the majority. And they have to sit in the back of the bus and take whatever the majority gives them because that
is the point of a majority based system. Right now, the minority, wealthy rules and that is not only wrong, but violates the very principle of the majority based
system we live under.

Kropotkin

These are good criticisms of the GOP position, but I think they are different from those made in the article. As I understood it, the article makes the case that the reason the GOP shifted the tax burden was to turn the middle and lower classes against taxes in general. That argument is ad hominem, not in that it attacks a cerain person, but in that it attempts to discredit an economic policy based on the reasons that a certain group of people endorsed it. It skirts the ostensible reasons for endorsing the policy (which I presented and you addressed), and attempts to defeat the argument without addressing it.

The rest of your points try the limits of my diabolical advocacy. I think the ostensible reasons that the GOP provides are misguided and easily defeasible. But that bolsters my case against the line of argument made in the article: if the arguments the GOP is presenting are so weak, why even bother deflecting them and arguing against some other supposed ‘real’ reason?