After 31 House Democrats signed a letter urging keeping tax breaks for the very wealthy as well as everyone else, a new letter signed by 47 House Democrats proposes keeping a low cap on the capital gains and dividends tax rate -- 15 percent. Wealth keeps whittling away at the poorer majority.
John McKinnon reports in today's Wall Street Journal,
Forty-seven House Democrats have signed a letter to Speaker Nancy Pelosi urging that tax rates on capital gains and dividends be maintained at the current level of up to 15% for all earners.
It's the latest sign of widening divisions among Democrats over plans by the party leadership and President Barack Obama to allow Bush-era tax breaks to expire for higher earners, defined as families making more than $250,000, while extending them for middle-income earners.
Many centrist Democrats in the House and Senate have objected, saying raising any taxes could harm job creation and slow economic recovery. The letter urging extension of the tax breaks for dividends and capital gains joins another letter to Mrs. Pelosi, signed earlier this month by 31 House Democrats, that called for a temporary extension of all the tax breaks for ordinary income.
The Senate last week abandoned its own plan to vote on a leadership-backed partial extension of the breaks, amid complaints from vulnerable incumbents that it could hurt their chances at re-election.
House Democratic leaders have given conflicting signals in recent days, but they appear unlikely to seek a floor vote on extending just some of the tax breaks before Congress adjourns this week to campaign ahead of the elections.
The "Party of the People" always must deal with a temptation to think first of the people who fill its candidates campaign coffers. For most Democrats, this temptation is still just a tendency (unlike the Republicans, for whom it is the First Commandment).
Now that Citizens United has resulted in an avalanche of cash at campaign time -- it was reported on Countdown last night that the ratio of corporate/Republican money to labor/Democratic contributions is now 26:1 -- there's a lot of second-guessing going on.
Inevitably the old saw comes up, "If you can't can't play" (i.e., don't get elected), "you can't win (i.e., do good in the world). It's a good excuse for throwing in the towel, as the 47 Democratic signatories to the letter arguing for a low tax rate (15 percent) on capital gains and dividends have done.
It's worth noting that President Obama has proposed a tax on capital gains and dividends only slightly higher, at 20 percent. This is the least productive form of wealth, since it is largely speculative.
American democracy finds itself in the midst of an historic transformation from a poorly functioning democracy to a poorly functioning oligarchy, but an oligarchy capable of establishing a perpetual hegemony while it tidies up. Until the pressure builds and society blows up. Glad tidings on election eve.