“Tax cuts for the rich: not a Minnesota value,” appeared as an op-ed piece in last Tuesday’s Minneapolis Tribune, contributed by Tim Walz, our congressman from Minnesota’s first congressional district. If only as a representative compendium of lame Democratic talking points, revisionist history, and cheap demagoguery, it deserves comment.
It was written as counterpoint to an earlier piece by Walz’ opponent, Republican Randy Demmer, who took him and congressional Democrats to task for postponing a vote on the Bush income tax rates set back in 2002, due to expire soon and revert back to older, higher ones. Allowing that to happen is being called a massive tax increase by Republicans. Leaving the current rates in place, at least the top bracket, would constitute tax breaks for millionaires, according to the Dems. This is the sort of semantical wrangle that politicians love, but I would submit that a raise in rates after nearly ten years is a tax hike, absolutely to be avoided in a recession.
But the interesting question is how, from Mr. Walz’ and the Democrats’ viewpoint, leaving the top rate in place represents “the same failed policies of the past that got us into this mess in the first place.” They love this formulation and you can hear it repeated over and over again from President Obama down to city council candidates.
Not raising the top income tax rate would be a policy of small government and low taxes, consistent with good business conditions and individual freedom, at least as conservatives view it. The “mess” we are in is the long recession with high unemployment and a sputtering recovery. These are compounded, complicated, and arguably prolonged, by massive government debt resultant of a nearly trillion dollar stimulus package that did the opposite of what was advertised by its proponents, including Rep. Walz.
The mess, or recession, never had the slightest thing to do with tax rates, high or low. It was caused by the bursting of a housing bubble and consequent banking crisis which, in tandem, brought the the U.S. and world economies to near ruin. The bubble was fueled by the U.S. government mandating that banks debauch their mortgage lending standards by lending to people without sufficient income or down payment – this was termed “creative lending” – so that minorities and poor people could own homes. It was federal regulators that saw to it that the banks complied, and the practices they enforced spread industry wide.
Now Mr. Walz would have it that the massive new bill to regulate the banks and Wall Street is putting the “cops back on the beat” so that taxpayers won’t have to “bail out reckless decisions by the big banks.” In fact, the reckless decisions were made in Washington by politicians and bureaucrats. Raising money and passing legislation to create more regulators and bureaucrats to meddle in mortgage or any banking would be, in fact, peddling the same old failed policies of the past.
Walz begins his piece with happy talk about tackling the national debt and reining in spending, but he has done just the opposite since he got to Washington. He goes on to call for the championing of small business, but the legislation and socialist approach to governing he has championed in Washington is loathed nearly universally by that community, where a strong recovery and new job formation must eventually begin.
Two years ago record numbers of Republican politicians landed on the ash heap because it was seen that they had been co-opted by the corrupt and free-spending culture of the nation’s capitol. Now that the voters have seen how much worse things can get, and how quickly, it appears that Mr. Walz and many, many of his cohorts may be joining them on that ash heap in November.