The Washington Post has the story Democrats, in a stark shift in messaging, to make big tax-break pitch for middle class.
The centerpiece of the proposal, set to be unveiled Monday by Rep. Chris Van Hollen (D-Md.), is a “paycheck bonus credit” that would shave $2,000 a year off the tax bills of couples earning less than $200,000. Other provisions would nearly triple the tax credit for child care and reward people who save at least $500 a year.
The windfall — about $1.2 trillion over a decade — would come directly from the pockets of Wall Street “high rollers” through a new fee on financial transactions, and from the top 1 percent of earners, who would lose billions of dollars in lucrative tax breaks.
All told, the package is about a third of the size of tax cuts enacted under President George W. Bush. It would transfer about 0.6 percent of national income, or gross domestic product, from millionaires and Wall Street traders to about 150 million American workers, with the paycheck bonus alone reaching at least 100 million workers.
I wonder if The Washington Post called it a windfall when President George W. Bush had tax cuts three times larger enacted during his administration.
If you read the story, it says that this proposal is an attempt to go beyond playing around the edges of extending the benefits of a “booming” economy to the middle-class and the poor. To me, this plan is certainly headed more to the crux of the problem, but it is still playing around the edges. $1.2 trillion over a decade is maybe 10 times too small. Where is the massive investment in infrastructure, education, research, and fair trade that should amount to $1 trillion in a lot less than ten years?
Though the article may think that:
Enter Van Hollen, 56, the senior Democrat on the House Budget Committee and a former chairman of the party’s campaign arm for House races. Close to Pelosi and the White House, he has emerged as one of the party’s big thinkers on economic policy and political strategy.
I’d call him a medium thinker, or at least not extra small.
To avoid increasing federal budget deficits, Van Hollen proposes
You see, right there, he is repeating the Republican lie. Bernie Sander’s has chosen a Chief Economist for the Minority on the Senate Budget Committee. Stephanie Kelton will try to educate the politicians about how counter-productive it is to talk about avoiding increasing federal budget deficits in the current circumstances. Did you see the emphasis, IN THE CURRENT CIRCUMSTANCES?
IN THE CURRENT CIRCUMSTANCES
Let me repeat that,
It is easy to know what special current circumstances are. The inflation rate is well below the target 2% a year, and it is approaching negative territory. See the previous post Replacing the Budget Constraint with an Inflation Constraint.