For all the superheated rhetoric of yet another election cycle, it's as clear as ever that the Republican and Democratic parties in Washington pretty much support the same economic policies. Indeed, any honest perusal of congressional votes proves that the party establishments are roughly the same when it comes to financial deregulation (less of it), job-killing free trade (more of it), bailouts (more of them) and corporate taxes (less of them).
Politicians and partisan media outlets deny this obvious reality, of course. But they do so because they have a vested interest in the red-versus-blue "polarization" narrative from which they generate campaign contributions and ratings, respectively. This is why their hysterical attacks on their foes -- and their refusal to acknowledge the political duopoly -- has such a grating "doth protest too much" quality. It's also why more Americans are wholly tuning out of politics -- we're less and less interested in gazing at two heads of the same economic monster.
That said, if you are still gullible enough to believe the illusion of huge differences on economics, behold the "debate" over taxes that is now roiling the presidential race.
President Obama kicked it off with his claim last week that he wants to stop "another tax cut for the wealthy." As supposed proof, he asserts that by proposing to extend all of the Bush tax cuts except those applying to top marginal tax rates, he will make sure everyone "making over $250,000 a year (will) go back to the income tax rates (they) were paying under Bill Clinton." In response, Republican presidential nominee Mitt Romney, who wants every Bush tax cut extended, played his role in the kabuki theater, claiming Obama "plans on extending (the tax cuts), just for certain classes of Americans" -- an idea that he says "will kill jobs." Not surprisingly, almost every news outlet echoed it all, insisting that this is an epic dispute over whether to only extend "the Bush-era tax cuts for people earning less than $250,000 a year," as the New York Times put it.
There's just one problem: Obama, Romney and the media are all lying.
Because of America's progressive tax system, all taxpayers under Obama's plan -- including those making more than $250,000 a year -- will get a tax cut on their first $250,000 of income. According to the Institute for Taxation and Economic Policy, this means that Obama's initiative, which would cost $150 billion, will give a one-year $20,130 tax cut to the top 1 percent of income earners. Meanwhile, the $210 billion Republican plan would give that income group a $70,790 tax cut.
In other words, this supposedly monumental debate isn't over whether to punish or further enrich households in the top 1 percent -- both proposals do the latter. Instead, this is a minute dispute over whether the tax code should give each of those households the equivalent salary of one butler (Obama's plan) or three butlers (Romney's plan). For every other income group, the two proposals are identical.
Now sure, at a time of deficits, Obama is right to oppose devoting an additional $60 billion to giving the wealthy two more butler salaries on top of the one they will already get under his plan. And he's especially right when we know that, despite Romney's hysterical job-loss claims, the economy did far better when the rich were paying Clinton tax rates on their top income.
However, pretending this is some big divide is yet another farce. Both parties are proposing to enrich the already rich, meaning the whole conflagration is yet another attempt to hide the two-headed monster behind a mask of conflict.
Unfortunately, that monster is still under there -- still rigging the economy against us.
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