Last week I noted that Kent Conrad, the chair of the Senate Budget Committee and a member of the cat food commission, appeared to support extending all of the Bush tax cuts, including those on the top 1% of earners. This would cost hundreds of billions of dollars and not stimulate the economy in any way.
In an interview with Mike Stark, Conrad backtracked on that claim somewhat, saying that he was misinterpreted in his comments, and that he would prefer an extension of the lower-end tax cuts before those on the wealthiest. The full audio interview is at right.
Conrad says that he was asked about cutting spending or raising taxes in the midst of this economy, where the recovery is fragile, and he responded that the general rule of thumb is to defer those measures until later. “It was in the context, actually, of unemployment extension,” Conrad said. “But if you were to prioritize it, the first priority is to extend unemployment, because people are most likely to spend that money. The next highest priority would be to extend the middle-class tax cuts, because they’re the next most likely. The least likely to spend it are the highest income people. But I think, given the weakness of this economy, you could make an argument that you don’t raise taxes on anybody at the moment.”
Conrad added that raising taxes on the wealthy would be the first priority after the recovery fully blooms. This seems to be a way to extend those high-end tax cuts for two or three years; Conrad put it at 18 months.
The idea of not doing policy that takes money out of people’s hands in a downturn is generally standard economic theory, but of course extending the high-end tax cuts for a while could beget more extensions, and so on.
Conrad did say he would not join Republicans in filibustering any bill that would not extend all of the Bush tax cuts. In other words, if a bill came up with President Obama’s guidelines of extending the middle-class tax cuts only, he wouldn’t stand in its way. Extending all of the Bush tax cuts permanently, as the Republicans want to do, “would be a disaster for the deficit, it would be a disaster for the debt, it would be a disaster for the economy,” Conrad said. Furthermore, if it meant stopping the high-end tax cuts now in order to get the tax cuts for the middle class extended, Conrad said he would do that, and join his party.
As the debate over the Bush tax cuts continues, it will be crucial to pin members of Congress down on these issues, as Mike Stark has done here.




9 Comments

Support this site!
Subscribe to the newsletter
Advertise on Firedoglake
Send
us your tips
Make us your homepage
About FDL News Desk
Too bad the Dem leadership doesn’t use the “financial Incentive” argument against all the people who want to either keep or extend the tax cuts for the wealthy. The argument: Tax cuts for the wealthy realize only 38 cents on the dollar of stimulus.
However:
Food Stamps: $1.78 for each dollar spent
Unemployment Benefits: $1.32 for each dollar spent
Tax cuts for middle class: $1.27 for each dollar spent
The idea that tax cuts for the wealthy pay for themselves is just ludicrous – they cost us more than the wealthy people even get!
I also wish that anyone (MSM, Dem leadership, etc) would yell and scream or whatever to get the point across that there are only 1.7% of people in this country that would be affected by this so-called tax hike (which it is not – it’s just letting the taxes go back to where they were before).
These rich people won’t even notice it. Also – since most of their money is taxed under capital gains at only 15% – they mostly WON’T PAY IT!
Let’s get real.
Well, Conrad wasn’t taken out of context. like he wants us to believe. My guess is that he’s heard from enough constituents to realize how deeply unpopular kissing the butts of the rich is.
I love the way were being played on this whole so called deficit issue. The Blue Dogs ( Obama as leader) set up the Cat Food Commission and it doesn’t play so well, so the other part of the team the Gopers double down on the BV$H tax cuts and of course anyone with a brain knows this will vastly increase the debt, so everyone starts screaming about the debt again and that allowing these tax cuts will make it worse far worse. The pt. is that now the whole frame moves right and is all about what they want us to focus on in the first place the deficit. It’s a two part kabuki dance and we went for it hook line and sinker.
Of course, those top 1% – 2% of the wage earners are the only ones who have actually experienced anything remotely like a “recovery” so far.
But then, they didn’t feel much of the Great Recession either and the only reason they stopped buying at all was because of the optics of their consuming while the rest of us are struggling.
IMNSVHO
Tax rates for the super-rich are like tax rates for big corporations. It’s not like they pay those rates, since for the most part they don’t actually work for their money. If the ‘poor’ schlubs raking in $200k or more via actual paychecks want to yell, they should yell about the loopholes that promote that.
So why not raise the high end taxes but then recycle every dollar of new revenue raised ($50 billion a year?) back as a payroll tax cut. A revenue-neutral tax increase. :o)
They are just trying different approaches to justify both cutting SS and extending The Bush tax rates.
Soon as they find one that people will believe everyone will be repeating it.
Conrad:
Extending Bush Tax Cuts PermanentlyWould be a Disaster”There, fixed it for you.
Hey, why not.