It’s easy to miss between all the cable news diatribes and political posturing, but there are real philosophical differences in how Democrats and Republicans believe we can produce prosperity. My fellow Democrats and I believe the middle class drives our economy — when middle-class families do well, America does well. Republicans believe that when we help the richest get richer, the benefits trickle down to the rest of us.
The debate over which elements of the 2001 and 2003 tax cuts to repeat puts these differing philosophies front and center.
There is broad agreement across the political spectrum that the tax cuts for middle-class families should be renewed. But the difference comes in how the two parties treat millionaires and billionaires and what that means for the deficit.
The Democratic tax plan is simple: Tax cuts for all Americans on the first $250,000 of their income. That means if you make $30,000 a year, you get a tax cut. If you make $60,000 a year, you get a tax cut. If you make $10 million a year, you get a tax cut.
The Democratic tax plan is focused on helping middle-class families and small businesses that drive our economy, but Americans who make more money are going to benefit as well. In fact, under President Obama’s proposal, Americans making $250,000 a year or more would still get a tax cut of about $7,000.
Now the Republicans are holding these tax cuts hostage. The ransom? More than $100 thousand each year in bonus tax benefits for each millionaire and billionaire. In total, the Republicans’ millionaire bonus benefits would add $700 billion to the federal deficit during the next 10 years, according to the Congressional Budget Office. When you include interest on the debt, the plan would add $840 billion to the deficit.
And it doesn’t end there. The overall Republican tax plan includes even more bonus giveaways for millionaires and billionaires and would add about $4 trillion to the federal deficit over the next decade. $4 trillion!
In other words, Republicans refuse to cut taxes for middle-class families because $7,000 isn’t enough for the millionaires. Instead, they insist we borrow trillions from countries such as China in order to give hundreds of thousands of dollars to the richest.