What's in you wallet?

Congress's grand exercise in statesmanship yesterday was extending the Bush dividend and capital gains tax cuts from 2008 to 2010. Here is some of the arithmetic as reported by Edmund L. Andrews in today's NYT piece, Senate Approves Extension of Bush Tax Cuts.

The Senate voted 54 to 44 on Thursday to pass almost $70 billion in tax cuts, mostly for the nation's wealthiest taxpayers. The action ensures that virtually all of President Bush's tax cuts will be locked in place until after the next presidential election.

The vote went along party lines.

The overwhelming share of the tax cuts the Senate voted to extend will flow to the wealthiest taxpayers. People earning $1 million a year would save about $42,700, and reap about 22 percent of the total tax cut, according to the Tax Policy Center, a research group in Washington. People earning $40,000 to $50,000 a year would save about $47 and receive less than 1 percent of the benefits.

The devotees of trickle down economics are dancing in the streets right now. The sad part is that most of these devotees are shoveling shit for doodly squat and own 10 shares of stock that they inherited from their Aunt Millie. As for the rich devotees of trickle down economics they are dancing on their yachts, an act, which to them, is more seemly than some ugly public lower middle class display. But I digress.

Then there are the folks in the double taxation school. They are more sophisticated than the trickle down economics crowd. The argument goes that the rich owners of financial assets are double taxed, once through corporate income taxes, and twice via dividends and capital gains taxes. But we all know about double, triple, and quadruple taxation of income. There is no reason why excusing returns to capital from double taxation should be privileged over excusing double taxation on returns to labor. Both forms of taxation provide the basic public services we have come to enjoy and expect. Both forms of taxation provide disincentives to work, invest, and save. In a universe filled to the brim with cosmic justice there would be neither death nor taxes. However, I digress again.

Meanwhile, the Congress hopelessly grapples with the real public finance issues. The tax cuts will be paid for by cuts to programs such as Medicaid and other services that hit the low and middle income worker the hardest. That, as mean spirited as it may be, is small compared to the train wreck known as the U. S. Federal debt.

One is left wondering why tax cuts not set to expire until 2008 received the top priority. One of the first answers that comes to mind is that Republicans may see the writing on the wall as far as controlling Congress and the White House past 2008. Whether it is fair or not to compare a $47 tax cut for the average worker against a $42,700 tax cut for the millionaire, the size of the numbers startles the eye.

I predict that this particular visible form of greed will adversely affect those who voted for it. Even in country renowned for its economic illiteracy, most people can still tell what is in their wallets and what isn't.

To those who say I am being unfair and mean spirited, I reply, "compared to whom?"