Senate Floor Speech on the Middle Class Tax Cut Act
Tuesday, July 24, 2012
Madame President, many Republicans argue that we cannot extend tax relief for middle-class families unless we also extend tax cuts for the wealthy. They argue that without tax cuts for the wealthiest 2 percent, we will harm “job creators” and slow the economy.
Their arguments rely on faulty assumptions, mistaken beliefs and misleading statements. Let’s get to the facts.
It is a fact that every American taxpayer, every single one, would receive a tax cut under this bill on the first $250,000 of their income.
It is a fact that, compared to the Middle Class Tax Cut Act now before us, the plan Republicans have put forward would increase the deficit by $155 billion dollars.
It is a fact that that the bill Republicans have put forward, despite their professed support for tax cuts, would raise taxes on the middle class by failing to extend the 2009 tax cuts for middle-class families, including the American Opportunity Tax Credit and credits that help families with children.
What’s unfolding now on the Senate floor is the culmination of a rigid Republican adherence to tax cuts for the wealthy as the supreme goal of public policy. Republicans have demonstrated a willingness to risk government shutdowns, to risk grave economic damage, and to risk rising taxes on the vast majority of Americans in pursuit of their highest of priority: lower taxes on the wealthiest 2 percent of us.
They want to risk all that in service to an idea that has already proved a failure. When historians look back at the Republican dedication to tax cuts for the wealthy, they will find it remarkable that so many fought so long and so hard to go back to a failed policy.
Income for the typical American family peaked in the year 2000 – not coincidentally, just before the Republican tax-cuts-for-the-wealthy mania reached its zenith. A June study by the Federal Reserve found that the average middle-class family’s net worth had fallen by 40 percent from 2007 to 2010. And in 2010, the bottom 99 percent of income earners reaped just 7 percent of total income growth, while 93 percent of all growth flowed to the top 1 percent.
As David Leonhardt of The New York Times reported on Monday, “The top-earning 1 percent of households now bring home about 20 percent of total income, up from less than 10 percent 40 years ago.” He continued, “The top earning 1/10,000th of households – each earning at least $7.8 million a year, many of them working in finance – bring home almost 5 percent of income, up from 1 percent 40 years ago.”
Now, perhaps this vast accumulation of wealth would arguably be acceptable if it had resulted in faster economic growth; if it had produced new jobs and helped average Americans prosper. Indeed, since the time of President Reagan, America has been told that the rising tide lifting up the wealthy would lift all boats, that the benefits would trickle down to all Americans. And our Republican colleagues today argue that we must continue the Bush tax cuts for the wealthy or risk harm to “job creators.”
But the Republican emphasis on policies that are more and more generous to the wealthiest has utterly failed to spark economic growth or create the jobs we need. Their experiment has failed. The Bush tax cuts coincided with the slowest rate of job growth in recent American history. Economic growth, even before the financial crisis nearly sent our economy into depression, was woefully short by historic standards.
The failure of the Bush policies to spur economic growth and job creation underlies the failure of another promise from supporters of tax cuts for the wealthy – the promise that those cuts would pay for themselves. Republicans backing the tax cuts of 2001 and 2003 painted grand scenarios of growth so rapid that it would yield increased tax revenue. But instead of growing federal coffers, we have gotten a flood of red ink.
So the policy of tax cuts for the wealthy failed as fiscal policy; it added to our deficit. It failed as economic policy, coinciding with weak growth in economic output and job creation. And it failed as a vital test of public policy in a democratic society because it failed the fairness test. Instead, it facilitated massive accumulations of wealth for a fortunate few while most Americans have struggled just to tread water.
And yet our Republican colleagues persist in their pursuit of this failed policy – persist, in fact, to the point that they are willing to force a tax increase on more than 90 percent of taxpayers, and potentially send our economy tumbling back into recession, in adherence to that failed policy.
Madame President, we’re not arguing against this policy of tax cuts for the wealthiest because we seek to “denigrate success,” or to stoke class warfare, as some Republicans allege. We are arguing against these policies because they are broken. They have failed. They are unfair. We should reject them lest they do even more harm. We should reject the Republican pursuit of tax cuts for the wealthy at all costs, every other consideration be damned. We should allow middle-class families to keep a few of their hard-earned dollars and pass the Middle Class Tax Cut Act. We should at a minimum overcome the Republican filibuster threat and move to proceed to debate on this singularly important issue.