Columns » Ernest Dumas

When math fails, GOP lies

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In a rational world where two plus two always equaled four there would be one idea today that would be so compelling and popular that every politician would have to be for it. The consequences of discarding the idea are so frightful and apparent that it ought to be political suicide to follow that course.

But reason in political discourse took flight years ago, and it is possible to argue that sound mathematical equations and rudimentary logic are probably wrong if they produce results that you don't like. You can also simply supply people the wrong facts and convince lots of them of the better results that the error produces.

The compelling idea is that the country needs to let the Bush tax cuts on the rich expire next year as President Bush and Congress intended when they made the cuts in 2001 and 2003.

Is that rational? The tax cuts plunged the country into the deepest deficit spending in history and produced the poorest economic growth in modern times (in terms of job creation). Everyone finally is persuaded that the debt growth threatens the nation's survival, and returning the tax rates on the top 2 percent of the country's taxpayers to the levels of 2001 would shave $1 trillion from the national debt over the next 10 years and larger sums in succeeding decades.

The vast majority of Americans think Congress went too far in the serial tax cuts for the rich and that the super rich particularly are responsible for the nation's economic grief and should pay more taxes because of it. But you can't tell that from the public debate. Republicans, all but a few in their congressional quotient, think they can turn in their favor the issue of keeping the tax cuts. It makes no sense, but don't count them out.

The Republicans don't argue, at the moment, that the rich need to pay low tax rates. They say now is not the time to raise the top marginal tax rate 3 percent because those people would stop going out and creating jobs. Like they are now? The fact is that the tax cuts did not lead to job creation and restoring the tax to 2000 levels won't stop it.

The Republican candidates for Congress in Arkansas repeat the national theme, that restoring the tax on upper incomes will kill small businesses. It is nonsense. Fewer than 2 percent of tax returns reporting small-business income are filed by taxpayers earning more than $170,000 a year and families earning more than $210,000, which are the top brackets. The tax would be restored only on individuals earning more than $200,000 and families earning more than $250,000.

Those arguments won't fly with many people, so Republicans fall back on a surer strategy. They just lie about what the president proposes to do.

Here's John Boozman, the Senate candidate: "We're 151 days away from a tax hike that will impact every American. The Tax Foundation estimates Arkansans on average will have to pay $1,400 more in taxes."

And Tim Griffin, the Republican candidate for Congress in the Second District: "In just 155 days, tax relief for American families and small businesses is set to expire, resulting in the largest tax increase in our nation's history."

They insinuate that the president and the Democrats will restore all the taxes, not simply those on high incomes. The only person who wants to restore all the taxes is Alan Greenspan, the Republican former Fed chairman who was until now the fount of all wisdom on economic matters for his party. Congress passed the tax cuts in 2001 and 2003 after Greenspan placed his reluctant imprimatur on them. Now he says they all must be repealed to get the country back on track. But that is not what the president proposes to do.

The 2001-level taxes (and 2003 on investment income), which were historically low, will be restored on fewer than 2 percent of taxpayers, the only Americans who have experienced large income gains the past eight years. Two thirds of the nation's total income gains from 2002 to 2007, when the recession began, flowed to the top 1 percent of U. S. households, who will account for nearly all the revenue gains under President Obama's plan. A middle-income Arkansas family will not pay a cent more in taxes.

The impact is especially poignant for Arkansas. Here is an issue that tells you who a politician's real constituency is. Who will he represent when the chips are down?

Of some 1.2 million Arkansas individuals and families who file federal tax returns, no more than 15,000 — fewer than 1.5 percent — would pay a dime more in taxes if Congress adopts the Obama plan. Here are the best figures: In 2006, the last year for which the Treasury Department has figures, only 19,309 Arkansans reported adjusted gross incomes of more than $200,000. All but 2,000 of them filed joint returns, which means their threshold would be $250,000 gross income, not $200,000.

If Congress does not enact the Obama plan or something like it, middle-class families will indeed see a small tax increase next year. Eventually, that will have to happen to get the deficit under control but the Republican strategy will perversely produce it in January.

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