[Originally published in The Herald of Randolph.]
The struggle between the Republicans and Democrats over the Bush-era tax cuts was most interesting in the context of the underlying reasons that the partisans have taken their chosen positions.
Many of the nation’s political observers have said that the primary reason the Republicans have clung to an extension of the entire Bush era tax cuts is that the beneficiaries of the top end of those cuts (over $250,000 a year) are important Republican constituents.
Statistics from 2008 show that there were 1,699,000 households in the United States that had earnings of $250,000 per year and above. That represents 1.5% of the nation’s households. The statistics further say that the mean size for such households is three people over the age of 18. That means that the total number of voters in the nation who live in such households totals just over 5 million of the 207,643,594 eligible voters in the US.
It’s really hard to believe that 1.5 % of the electorate represents anything more than a drop in the bucket in terms of its numerical significance to the Republican Party. After all, out of over 200 million eligible voters, they bring only 2.5% to the table—and some of them probably vote for Democrats, further diminishing their impact.
No, the only truly significant thing about this tiny group of voters is their income and their contribution to the federal coffers through taxation. They pay over 40% of all the income tax paid to the federal government. That puts the Republican Party’s interest in this group in a completely different light.
Since the metamorphosis of the Republican Party really got going during the 1960s, a number of hard and fast rules have inched into the Republican economic platform. The economic policies are most relevant here.
The fiscally conservative Republicans believe in free markets and a laissez faire approach to economic activity. That brings with it minimal regulation of business and financial markets, with an underlying belief that such markets should and can be selfregulating. Further, Republicans favor removing or mitigating impediments like estate, income and capital gains taxes.
The theory of supply-side economics also presupposes that by putting as much money as possible in the hands of corporations and the wealthy, as opposed to the federal government, that money will be spent creating jobs and wealth, and that the wealth will then trickle down to all economic levels in the economy.
Finally, there has long been Republican opposition to Social Security, Medicaid, Medicare and any other social program, like Obamacare, that is run by the federal government. It is the Republican conviction that the federal government should not and cannot efficiently run such social programs. If any social programs are to exist at all, and it is not clear exactly how the Republicans feel about that, they should be run by the private sector. That philosophy precipitated the discussion in the Bush II Administration about the privatization of Social Security.
If you put together the two basic Republican convictions: (a) that the federal government is not only incapable of running the social programs it runs now or in the future, and (b) that the only way to run the economy is to keep as many economic programs as possible in the hands of private enterprise, then you begin to see why the Republicans of 2010 are so fixed in their absolutely inflexible approach to tax legislation—tax cuts for all, including the richest, not just for the middle class! Reduce Social Security contributions. Remove the estate tax.
Their convictions absolutely demand that they do everything they possibly can to cut the flow of money to the federal government through as much reduction as possible in taxation. They need to starve the federal beast! The best way to do it is to cut taxes and put the money in private hands.
If you believe that man is perfectible and will act for the greater good, you could be a Republican. If you do not share that belief and contend that without oversight and careful regulations, man is in it solely for himself, then you may be a Democrat.
A close look at what has happened in the last two years in our financial markets might give some clues on what is needed here.
Haviland Smith is a longtime resident of Brookfield who now lives in Williston.