There Was Never Going to Be ‘Bipartisanship’

 

President Obama is receiving credit, rightly, for being considerably more polite and decent to his strident opponents—neocon media personalities, the GOP in Congress, former Republican candidates for office—than George W. Bush and his cohorts ever were to Democrats. He didn’t even wear garlic, going to dine with George Will, Bill Kristol and a host of other neocons in a house presumably free of mirrors. But it’s a good thing the news cycle moves so quickly nowadays. Otherwise, that quick set-up by the GOP in DC, to make ‘lack of bipartisanship’ the putative hallmark of presidential failure, might not have been so quickly seen through–and shot down.

The simple truth, to coin a phrase, is that there was never going to be bipartisanship from Republicans in Congress and/or angling for office. That’s not what they’re there for. They’re there to protect the interests they have always protected, at least at the highest party echelons.

Hence the rapidity and the blind rigidity with which the GOP already attempts to represent every fiscal move by the new administration in the old tax-and-spend light, ‘positioning’ Republicans in Congress as in favor of ‘cuts’ and Democrats as the reverse. Disregarding budget-busting amendments to the stimulus offered by the GOP, some media outlets have gone along with this line.

Predictably, one of the biggest differences between the House version of the stimulus package and the Senate version, the latter more affected by GOP demands, was that the Senate version included more, and more regressive, ‘tax cuts’. Thus the ‘cut spending’ line—actually, a rise in deficits—melds neatly with the ‘cut taxes’ line.

 

It’s a neat formulation but an Orwellian distortion.

 

When the GOP, which recently brought about the biggest wave of government spending in U.S. history and capped it off with a Wall Street bailout for some of the biggest beneficiaries of that spending, talks about ‘cutting taxes,’ in practice the ‘cuts’ boil down to two policies:

1)      Shifting the tax burden from the wealthy and corporations to the middle class; and

2)      Shifting the burden of raising taxes from the federal government to states and localities.

Both of these shifts are in practice regressive, bearing down hardest on those least able to bear any further financial strain. Over-all, what happens to ordinary taxpayers—especially hardworking, non-indigent individuals who have to watch every dime—when the Grover Norquist types go to work drowning the government in the bathtub?

We are seeing the answer right now, most prominently in Schwarzenegger’s California. In general, taxes imposed by state and local governments tend to burden ordinary individuals more than they do the affluent or corporations (which often operate above the aegis of state law). As today’s Washington Post sums it up, the new cuts being passed in California fit the typical pattern:

 “The budget measure would trim spending by $15 billion, including $8.6 billion from funding for public schools. It would raise $14 billion in taxes by increasing the sales tax by 1 percent and the gasoline tax by 12 cents a gallon, by doubling vehicle registration fees and by levying a 2.5 percent surcharge on income taxes. The rest would come from new borrowing.”

It’s like reward-the-billionaire pinball. Of all forms of broad taxation, the most regressive is the sales tax. Such sales taxes as gasoline tax and fuel tax hit individuals and businesses dependent in transportation and housing particularly hard. Vehicle registration fees and other so-called ‘user’s fees’ are generally just a form of sales tax under another name, and btw not doing much to enhance the health of our automobile industry or our transportation sector generally. After all, the only way to avoid paying more in these sectors is to do without a car or to keep your old one. (And if you do without, you are still paying more, lately, for mass transit. See below.)

Ditto for all the ‘recordation fees’ and other fees so beloved of states and localities, imposed on you—“They’re gonna nick you every way they can,” an older guy around here commented—when you go to record your will or the deed to your house, or get a driver’s license or become a notary public, or buy a boat or hunt or fish, etc. For all the talk about a ‘death tax’—actually a very lenient estate tax—tax policy proposed by every Republican administration in memory is much like a tax on everyday living.

Property taxes are only somewhat less regressive—and they are pinned to a ‘market’ that may be nonexistent and is skewed to start with. Full discussion of the way the term ‘markets’ is used is far beyond the scope of this article, but just try to imagine what would happen to housing prices in your neighborhood if—here’s the paradox—your neighborhood became the most ideally stable in the country, with everybody paying off the mortgage and nobody moving. The effect: Since the most recent house sales, on a totally-paid-up block, would be years in the past, house prices as set by the ‘market,’ without correcting for lack of indebtedness, would be destructively low.

Be it noted that ‘small business,’ which we sometimes hear about a lot from GOP lawmakers, who have recently emphasized the talking point about reducing the tax burden on small business, is also hit hard by the most regressive taxes. As with individuals of modest means, genuine small businesses struggle the most with higher fuel prices, more recording and other user’s fees. They also have the hardest time maintaining adequate paperwork for ever-increasing sales taxes, which can also eat into their sales.

Then there’s the steadily rising cost of getting to the store or other place of business. Unsurprisingly, customers are numerous for delivery businesses–UPS, FedEx—and for online shopping centers—eBay, Amazon. That rise, good news in a commercial sense for some buyers and sellers, is directly related to transportation costs (as well as to the desire to save time and effort).

As I have noticed before, the subway and train station near my home illustrate the effects of federal ‘tax cuts’ connected to reduced federal transportation subsidies. Parking at the nearest Metro station, while limited, used to cost $1.75 per day, and you could get out for free if you left before 3:00 p.m.  Now, the price has more than doubled and stays the same regardless of what time you leave.

A small item, by itself. But multiply $1.75 by 5, and you get a weekly increase of $8.75; multiply that by 4, and you get a monthly increase of $35.00; multiply that by 12, and you get a yearly increase of $420.00, give or take a little for either vacations or overtime.  Meanwhile, both train fares and subway fares have also gone up, partly because of the pressure of fuel costs and maintenance costs.

Obviously, increases in the cost of transportation hit those people hardest who can least afford to pay. They hit the middle class, the going-to-work-class, much harder than the wealthy. But the nation’s counties, cities, towns and states have to levy such increases to pay for services. We have a growing population that requires transportation, and a shrinking proportion of the over-all percentage of taxes paid by the wealthy and by corporations.

NOTE

Below is a partial list, which used to be passed around by email, of taxes-by-any-other-name. None of these taxes have gone down in any state or locale:

Accounts Receivable Tax                  Building Permit Tax
CDL license Tax                                Cigarette Tax
Court Fines (indirect taxes)               Dog License 
Fishing License                                  Food License 
Fuel permit tax                                   Gasoline Tax (42 cents per gallon [dated])
Hunting License Tax                                     Liquor Tax
Local Income Tax                              Luxury Taxes
Marriage License                              Medicare Tax
Property Tax                                      Real Estate Tax

Septic Permit                                      Service Charge Taxes
Road Usage Taxes (Truckers)                      Sales Taxes
Recreational Vehicle Tax                  Road Toll Booths
School Tax                                          State Income Tax
State Unemployment Tax (SUTA)    Telephone federal excise tax
Telephone federal universal service fee tax
Telephone federal, state and local surcharge taxes
Telephone minimum usage surcharge tax
Telephone recurring and non-recurring charges tax
Telephone state and local tax                       Telephone usage charge tax
Toll Bridges                                        Toll Tunnels
Traffic Fines (indirect taxation)        Trailer registration tax
Utility Taxes                                       Vehicle License Registration Tax
Vehicle Sales Tax                              Watercraft registration Tax

Well Permit Tax

This partial list does not include every ‘recordation fee,’ mentioned above, for everyday official documents like deeds and wills, or the raft of ‘license fees’ levied on entrance to most occupations or professions, or the extra sales taxes levied on airport parking and airplane tickets. Again, all these measures become more essential to small governments when they can count on neither federal support nor general economic prosperity.

Soaking the middle class, of course, goes much farther even than fees and indirect taxes, as everyone knows who has faced rising college tuition and rising health care costs. If people are now hoping fervently that President Obama will be a new FDR, it is in large part because President Bush implemented the unstated platform of reversing everything positive accomplished by FDR’s New Deal.