As the end of the year approaches and the fiscal cliff looms, there is a rare bipartisan opportunity to do the right thing in this lame duck session. And while the concept of bipartisan outreach within the Republican ranks lasted about a day or two after the election, the quick return to GOP absolutism is more about pride and keeping the base happy than good, long-term political sense.
The congressional Republicans (and indirectly their corporate masters) have had the American people smack them upside the head with a clear message: the ideology of perpetual gridlock is ruining our country and the GOP is largely to blame for it. Despite all their messaging through Fox News, and the less obvious corporate tilting of other mainstream news sources, the GOP can’t spin their way out of the stain they’ve left on Congress.
The GOP stand against allowing more tax revenue, cemented in place by Grover Norquist, can kill the Republican Party for a generation if it remains unyielding. Although it’s not in his nature, Grover Norquist will just have to accept that the pledge he demanded of congressional Republicans can no longer trump the will of the people. And politicians that intend to survive the downward spiral that the GOP is experiencing must break ranks on this issue or be pulled down the drain as well.
President Obama and the Democrats have already floated a bill to extend the Bush tax cuts to those making under $250,000 but that was held hostage by Republicans, demanding that the wealthy get the same deal despite the fiscal cost - and their debt reduction hot air.
But now, the GOP has lost its leverage in this battle. Despite that, the Democrats can be the adults in the room and do actual negotiating, taking the lead and the credit for what Americans will come to see as the right course of action in fending off the financial austerity triggers that kick in at the first of the year if nothing is done.
Although there are loads of other fiscal factors such as war and education spending, I’m going to focus on altering tax law including a new “1000 Families” top tax tier and another notch at the 100 Families level. These tiers are based around the minimum that a lower middle class family of four can survive on: about $35,000. See what you think of these ideas and how they might play on both sides of the aisle:
-the Bush tax cuts remain for those making up to $350,000, not $250,000
-from $350,000 to $3.5 million per year, the tax rate will be at 38%, still lower than the 39.6% of the top tier during the Clinton era
-from $3.5 million to $35 million, the 100 Families rate will apply: 43%
-from $35 million on up, the 1000 Families rate will be 72%
-liquid asset capital gains will remain at 15% up to $800,000, but thereafter will be taxed at the regular income rate. For hard assets the transition happens at double that, $1.6 million, and beyond that the rate will be 24%
-the baseline for all corporate tax rates will go down to 28%
-ALL OFFSHORE CORPORATE TAX HAVENS used to shield companies from paying US taxes will be discontinued. If any business has more than 60% of its employees and/or 60% of its gross revenue within the US, there can be no more tax dodging
-the shielding of personal taxable income in offshore accounts will also end
When you put all these factors together, this could be the endpoint of a successful negotiation. Now I’m not looking to start negotiations by giving up 80% of what we want, like what Obama did by tossing out single-payer even before the Obamacare battle began. But there are ideas in these proposals that DON’T lump the “pretty rich” in with the “super rich.” And regarding the “small business owner” mantra that the GOP always throws around, these numbers prove that Democrats are at least listening even if we don’t agree on where the threshold of wealthy is. We’ve kept the status quo or even done better for small businesses and many millionaires, as well as medium-level players on Wall St.
But this election was clearly a referendum on the huge disparity in wealth that Republicans have been pushing for in their legislation and rhetoric. And by presenting these new top tax tiers in a tangible frame of reference, labeling wealth in terms of 100 and 1000 families, most rational people could see that increased taxation at these levels is reasonable.
I don’t know how the numbers would work specifically in this scenario in terms of increasing revenue, but my guess is that they’d provide a sizable surge that could help out strapped states, start needed infrastructure projects, and add momentum to the green energy revolution.
If the Democrats can champion a deal like this and have the House sign off on it, so many good things can happen. A teetering economic recovery can be strengthened. The Republicans can actually gain political ground by showing actual bipartisanship. Yes, the super wealthy can complain, but to be fair the impact on them will be far less than they’d ever admit.
The other thing that will benefit America is that GOP stonewalling as a political strategy will be shattered, and the public’s reaction for that may force the Republican Party towards splintering with the tea party base clinging to the Rove/Limbaugh-induced hard line approach, allowing it to wither away in indignant pride. For the GOP to remain relevant, they will have to chuck their tainted leaders like Boehner, Cantor, and McConnell and pretend to reinvent themselves using rhetoric that’s more centrist while still pulling subtly towards the corporate agenda that keeps the perks and campaign cash flowing. They’ll have to start playing smart instead of merely proud. And if some actual true conservatives do rise from the dust, I wish them success in remaking their party. Because the unearthing of what the current GOP has done, and plotted to do, is still in its infancy. Most of America knows about the iceberg, but will be over time amazed at just how much devious and un-American bulk lies beneath the surface.