Throughout the tax cut debate, the most essential political reality, the sine qua non of politics, remains unaddressed: the vicious cycle of campaign funding. It works like this, as far as I can tell:
• Republicans argue that tax cuts for the very wealthy are so important to job creation that they will stall every other piece of legislation to get them. Yet the Bush tax cuts failed to promote job creation. The George W. Bush years were the worst for job creation since the government began keeping records, according to The Wall Street Journal. (The best job creation years were the 1990s – after taxes were raised in order to reduce the Reagan deficits.)
• In order to pay for those tax cuts, the U.S. Treasury must borrow huge sums from other countries, like China. This increases payments on the national debt, which requires budget cuts elsewhere. Social Security and Medicare, which are of crucial importance to lower-income people, get the ax. Low- and middle-income people wind up paying for high income tax breaks but do not benefit from them.
• Tax cuts for the wealthy don’t stimulate jobs, but they do stimulate campaign contributions. What do many high-income people do with their windfall? They contribute to Republican campaign coffers.
• Campaign funding buys Republican seats in Congress, and the cycle continues.
The tax cut plan for high-income people is a job protection plan for Republican (and some Democratic) politicians.