Obama ’s tax windfall for the rich

[Antid Oto]

REPLY TO: D66 at nic.surfnet.nl

Obama’s tax windfall for the rich
10 December 2010

The deal worked out between President Obama and the Republicans to extend
Bush-era tax cuts for the richest Americans is the latest demonstration of the
dictatorship America’s financial aristocracy wields over the government and its
policies.

The agreement will extend $150 billion in income tax savings to the wealthy over
the next two years and hundreds of billions more in the form of cuts to taxes on
corporate profits, capital gains, and the estates of multimillionaires.

Obama has capitulated to the demands of the financial elite, expressed openly in
the solid Republican support for continuing the tax cut for the wealthy, despite
large Democratic majorities in both houses of the outgoing “lame duck” Congress.
He has sought to justify this latest handout to the rich by claiming that he
secured major concessions, including the continuation of tax breaks for the
lower tax brackets, a 13-month extension of federal unemployment benefits, and a
one-year cut in Social Security payroll taxes (which will actually result in a
tax increase for the bottom 40 percent of US households when balanced against
the expiration of the current Making Work Pay tax credit).

Obama claims that he reluctantly signed off on the deal because of political
realities. He had no choice, he argues, since he could not get the Republicans
to budge and the votes were simply not there to extend just the Bush tax cuts
for the middle class. He was supposedly motivated purely by concern for the
well-being of the American people and driven by his single-minded focus on
creating jobs, both of which would suffer if the tax cuts for families earning
under $250,000 expired on January 1.

This is yet one more demonstration of cynicism and contempt for the intelligence
of the people by the man whose campaign slogan was “Yes we can.” Whom does Obama
think he is kidding?

There was never serious doubt that the tax cuts for the rich would be extended.
Plenty of signals were sent by prominent Democrats in this direction before
November. However, as a December 7 article in the Washington Post spells out in
some detail, the decision to do a deal with the Republicans on the tax cut for
the rich was finalized following the Democrats’ debacle in the mid-term
election, as part of a calculated turn by the Obama White House even further to
the right.

“President Obama's willingness to extend all of the George W. Bush-era tax cuts
is part of what White House officials say is a deliberate strategy,” the Post wrote.

“The strategy emerged from hours of post-election meetings among senior
administration officials who, after poring over returns, exit polls and mid-term
history, have determined that the loss of independent voters who supported
Democrats in 2008 cost the party dozens of races this year,” the Post continued.

As exit polls and other data have shown, more critical to the Democratic defeat
than the swing of so-called “independent” voters was the huge decline in the
turnout of critical voters—youth, minorities workers, professionals—who had
turned out in large numbers for Obama two years before. ABC News calculated that
29 million Obama voters from 2008 did not go to the polls last month. This
collapse in the Democratic vote was the result of disillusionment and anger over
the abandonment by Obama of his campaign promises and the right-wing policies he
has pursued since taking office.

The invocation of the need to win back “independents” is code language for
moving further to the right in order to placate not the voters, but the
financial aristocracy. In fact, polls have shown that wide majorities among both
Democrats and independents oppose an extension of the tax cuts for the wealthy.

In the lead-up to the election, Wall Street mounted a media campaign to register
its dissatisfaction with certain elements of the administration’s policies—first
and foremost, Obama’s public stance in opposition to extending the Bush tax cuts
for the rich. Leading figures who had previously supported Obama, such as
JPMorgan CEO Jamie Dimon, began to criticize the White House for “unfairly”
blaming the banks for the economic crisis, and the US Chamber of Commerce
launched a multimillion-dollar ad campaign in support of the Republicans.

Even before the election, the White House was discreetly signaling that it had
received the message, but after the vote it moved quickly and in earnest to
reassure the banking and corporate elite that it would do nothing to restrain
their profit-making while cracking down harder on social spending and the
conditions of the working class.

The agreement to extend the tax cuts for the rich is only the beginning of this
process. On both sides of the political aisle, among Republicans and well as
Democrats, tax boondoggles for the wealthy, cuts in vital social programs, wage
freezes and reductions are presented as being motivated by a determination to
create jobs.

The supposed concern over jobs is a fraud. Both parties tacitly welcome high
unemployment as useful for driving down wages and increasing the exploitation of
the workforce. Even as unemployment has continued to rise, corporate profits
have soared and the stock market has roared ahead.

In the surreal world of US politics, measures that line the pockets of the
rich—the Obama-Republican tax deal included—are “jobs creators.” But any effort
to directly create jobs—for example, using the $150 billion the deal earmarks
for the rich for public works and infrastructure projects—is rejected out of
hand, by Obama and both parties.

What is perhaps most sinister about the agreement is that its addition of an
estimated $900 billion to the federal deficit will be used to demand new cuts in
any form of government spending that benefits the working class. It is a very
safe bet that in his forthcoming budget proposals and State of the Union address
Obama will demand rapid implementation of many of the proposals coming from the
National Commission on Fiscal Responsibility and Reform.

The commission, appointed by Obama, approved in its majority a plan that would:
cut Social Security, Medicaid and Medicare; lay off government workers by the
tens of thousands; impose new taxes on employee health care benefits and
consumer items; remove tax credits that largely benefit working class people.
But for the rich, the commission proposed cuts to the high-end income tax rate
and corporate tax rate of as much as one third, and the removal of taxes on
corporate profits earned overseas.

In his press conference the day after the announcement of the tax cut deal,
Obama significantly pointed to the need for “tax reform” as well as deficit
reduction.

These policies of social plunder will have the most devastating consequences.
But they are making clear the basic class divisions in the US—and indeed all
over the world. In every country, the working class is facing brutal attacks by
governments demanding that it pay the price for the failure of capitalism.

The Obama administration is exposing the reality of the Democratic Party as an
instrument of the financial elite, no less than the Republicans. Workers must
break from this party and build a mass movement fighting to break the grip of
the financial elite and establish a workers’ government, as part of the fight
for socialism internationally.

Tom Eley

http://wsws.org/articles/2010/dec2010/pers-d10.shtml

**********
Dit bericht is verzonden via de informele D66 discussielijst (D66 at nic.surfnet.nl).
Aanmelden: stuur een email naar LISTSERV at nic.surfnet.nl met in het tekstveld alleen: SUBSCRIBE D66 uwvoornaam uwachternaam
Afmelden: stuur een email naar LISTSERV at nic.surfnet.nl met in het tekstveld alleen: SIGNOFF D66
Het on-line archief is te vinden op: http://listserv.surfnet.nl/archives/d66.html
**********