Tax deal: Where should the trickle start?

By Jayson Jacoby, The Baker City Herald

We used to believe that Congressman Peter DeFazio, who represents Oregon's 4th District, west of the Cascades, had a greater immunity than most politicians to the peculiar effects of long-term exposure to Washington, D.C.

Although we sometimes disagree with DeFazio's positions, we admire his independence and his knack for slipping out of the powerful grip of dogmatic partisanship.

Then we read his recent op-ed in The Oregonian.

The subject was the tax deal that President Obama negotiated with Republicans earlier this month.

Actually we read DeFazio's column a few times to make sure we hadn't misunderstood him the first go-round.

But his message, as is his custom, is admirably clear.

Not so admirable, though, are DeFazio's reliance on tired platitudes

about the unfairness of America's progressive federal income tax

system, and his inconsistent stance on the efficacy of using public

dollars to roust the slumbering economy.

DeFazio describes the tax deal, which prevents federal income tax rates

from increasing for all brackets on Jan. 1, as a "financial disaster

for 98 percent of the American people."

He also accuses Republicans of "hold(ing) the middle class and

unemployed Americans hostage until the millionaires and billionaires

get their ransom."

Now we understand that exaggeration is a favorite arrow in most politicians' quivers.

But we're confident that the vast majority of those 98 percent of

Americans to whom DeFazio referred, on learning that, thanks to the tax

deal, their paychecks will not get smaller when 2011 debuts, would not

call the situation a "financial disaster."

Nor will they think of themselves as hostages.

The plight of the 98 percent is not the crux of this matter, of course.

It's the 2 percent - those millionaires and billionaires - that DeFazio is so worked up about.

Continuing the Bush tax cuts for that tiny minority, by DeFazio's reckoning, constitutes "needless generosity."

(Why it's not also a financial disaster, considering the 2 percent is

getting the same basic deal as the 98 percent, the congressman does not

say.)

Although we're troubled that DeFazio thinks the government's setting of

income tax rates is a form of generosity, we also concede his point.

The wealthiest 2 percent of Americans don't "need" their tax rate to

stay steady, in the conventional sense of that word. They can afford to

pay more.

The salient question, though, is whether the 98 percent will fare

better or worse as a result of Obama's and the GOP's "needless

generosity."

"Worse" is DeFazio's answer.

But the case he lays out in his op-ed is flimsy at best.

He raises the specter that the tax deal will render Social Security

vulnerable to "the attacks of privatization advocates," yet his

evidence consists largely of his own predictions about what Republicans

will do a year from now.

DeFazio larded his column with a few predictable cliches as well,

claiming, for instance, that Obama was "outmaneuvered by Republican

devotees of the trickle-down-at-all-cost economic theory.

But here's the thing: DeFazio's proposal relies just as much on the notion of money trickling downhill.

The key difference is that DeFazio thinks the trickling should start, as it were, from the top of the Capitol dome.

The way to revive the flagging economy, he writes, is to make

"significant investments in our crumbling infrastructure (which) will

create tens of thousands of living-wage American jobs and produce

tangible benefits for future generations."

Another federal stimulus, in other words.

Trouble is, Congressman, we already tried that, $730 billion worth, and

it has proved not to be anything like the tonic we were led to expect.

Besides which, you voted against that stimulus bill in February 2009.

What part of its failure convinced you to reverse your position?

By contrast, Obama, along with a majority of DeFazio's colleagues in

the capital, has concluded that the better option now is to leave more

money in the private sector.

Lacking DeFazio's claimed prescience, we can't say whether this

strategy will benefit the economy any more than siphoning more dollars

to the federal government would, or passing the stimulus package did.

We do know, thanks to the U.S. Census Bureau, that just 19 percent of

Baker County's workforce is employed by a government agency (including

state and local levels as well as the feds).

Which means most workers in this county draw a paycheck from private rather than public accounts.

Given those statistics, we'd rather that local private employers

continue to keep more of their earnings. This includes small businesses

whose owners' incomes put them in the 98 percent category - DeFazio's

purported "hostages" - as well as big companies such as Ash Grove

Cement, Behlen and Marvin Wood Products, whose management teams no

doubt include some who belong to that 2 percent club.

Let's ensure that these employers, the heart of our local economy, are

healthy before tackling the ticklish matter of whether they're also

being "generous" enough to the federal government.

Returning to DeFazio's castigation of GOP trickle-down theory, think of it this way:

When it comes to trickles of money, we think we're more likely around

here to catch a refreshing shower if the dollars flow into private

rather than public channels.

13108975
The Baker City Herald
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