None of Us is as Irresponsible as All of Us - Obama Lacks Spine

I’m back after a respite.

My thoughts on the Obama tax cut deal? Obama has no spine. My second thought? None of us is as stupid as all of us! Or better yet; none of us is as irresponsible as all of us!

Proof? The estate tax is currently set to automatically revert to pre-Bush era levels. There will be a $1,000,000.00 exemption for individuals ($2,000,000.00 for couples), after which an estate’s assets will be taxed at 55%. This will happen if the lame duck Congress does nothing. Republicans currently have no power to bring bills up for a vote. Democrats are in complete control over what bills are brought to the floor.

Additionally, Congress has already passed a bill retaining the Bush era income tax rates for all wage/salary income below $200,000.00 ($250,000.00 for couples). Obama has said repeatedly, and correctly, that extending the Bush tax cuts for income above these levels does nothing to stimulate our economy, and is harmful to our long-term budget outlook. All that has to happen to retain the tax cuts on lower levels of income, without extending the tax cuts to the higher levels of income, is to get the Senate to pass the House bill.

One would think that if Obama really believed what he’s said repeatedly on these matters, he would go to the Republican Senators, point to the House bill, and say, “take it or leave it. But if you leave it, know now that I will veto any legislation passed by the next Congress that cuts taxes on higher levels of income.”

He could also say, “I understand the problem with the estate tax and small businesses, so I’m willing to accept a deal in which estate tax exemptions are raised to $3,500,000.00 for individuals ($7,000.000.00 couples), with a 45% assessment on assets above those levels. That way, only the super-rich will face estate tax liability.” Obama could even do this in concert with Nancy Pelocy, who could promise not to bring up any other bills during the lame duck session. Harry Reid could even get in on the act by promissing not to hold a vote on the House bill until the Senate allows an up or down (no filibuster) vote on the Dream Act and the repeal of DADT. All of this would encourage and please the millions of liberals who constitute the Democratic base.

Such a strategy would also project strength and conviction from a political party famous for its fecklessness.

Frankly, except for spite, I don’t see how Republicans wouldn’t fold. Republicans would be responsible for allowing tax increases on all levels of income, when they could have lowered taxes on all income below $250,000.00 – which exhausts the income earned by 97 percent of U.S. families. They would also be responsible for allowing the estate tax to revert back to Clinton era levels, when they could have gotten a reduction to protect small businesses. And what would Republicans (and their rich supporters) gain by their obstruction? Nothing!

So what does Obama do? Instead of cooperating with Congressional Democrats in executing this squeeze play, Obama goes to the Republicans and cuts a deal extending the Bush tax cuts for all levels of income. The deal further sets the estate tax exemptions at $5,000,000.00 and $10,000.000.00 for individuals and couples respectively, with a new rate of 35% for assets above those levels. Obama then rebuffs Congressional Democrats for pointing out the obvious - that this was a terrible deal – and that what Obama got in return, mainly an extension of unemployment benefits - would almost certainly have happened anyway.

Negotiate with your adversaries instead of cooperating with your friends, and, in the process, disparage your supporters while abandoning your principles. That’s Obama’s strategy, in a nutshell.

Also, think about the difference between a 35% rate on estate assets above $10,000,000.00, verses a 55% rate. This cuts taxes $200,000,000.00 for estates with assets totaling $1,000,000,000.00. The Walmart family alone stands to gain $32,000,000,000.00 in tax relief from this deal.

What kind of country borrows money from China to finance a $32,000,000,000.00 tax break for its wealthiest family?

As I said – Obama lacks spine. And none of us is as irresponsible as all of us.

Joe H.