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A Tea Party rally at the state capitol in Denver on April 15th, Tax Day. (AP Photo)

If the Tea Party wins, who benefits? Not its members.

COMMENTARY | May 06, 2011

Martin Lobel holds that the Tea Party rank and file, knowingly or not, are led around by the rich and powerful. That in the name of reform, their plans would make things worse, not better for most Americans, including themselves. That right-wing think tanks are calling the shots, and the press is pretty much missing the story.


By Martin Lobel
Lobel@LNLlaw.com

Members of the Tea Party appear to be overwhelmingly middle class individuals threatened by economic pressures and upset at the failure of government to solve problems. The irony is that they are espousing remedies that will only make things worse for themselves. Yet, with very few exceptions, the media have ignored this contradiction.

Tea Party members are absolutely correct that economic policies over the last 30 years have hurt them and the rest of the shrinking middle class. The shift in income to the very wealthy has been dramatic. According to The Economic Policy Institute, 100 percent of the average income growth between 2000 and 2007 – all of it – went to the top 10 percent of the population, and 63.5 percent of the wealth is now held by just the top 5 percent.

Instead of dealing with the causes of this shift in income, Tea Party leaders have focused on cutting spending and cutting taxes. These remedies will benefit the very wealthy but not the endangered middle class. The proposals by Rep. Paul Ryan (R-Wisc.), considered by some to be among the more rational Tea Party ideas, would cut government spending on health care by shifting it to individuals. The point has been made repeatedly but bears restatement: Putting such a burden on ordinary citizens will cost drastically more and even be ruinous in many cases. The great majority of people have neither the economic power nor the sophistication to negotiate health care fees. Only the insurance companies will benefit by this aspect of Ryan’s budget, which was passed by the House with only four GOP members dissenting. The Ryan budget also cuts the top tax rate from 35 percent to 25 percent. That’s a decrease of almost 30 percent, a fat savings limited to the most wealthy – the extremely wealthy, that is – and one more move to end progressivity in income taxes.

Why does the Tea Party take positions like these that injure its members?

For the answer, look to the think tanks. And to a complicit press.

A couple of the more prominent Tea Party think tanks are Dick Armey's Freedom Works and Tim Phillips' Americans for Prosperity. Some older, prominent groups that long pre-date the Tea Party serve the same function, such as the American Legislative Exchange Council, which is helping to obliterate public employee unions.

It is the right-wing think tanks, funded by the very wealthy who stand to gain from cutting taxes and spending – the Kochs, the multinational corporations, Wall Street, etc. – that mold these proposals intellectually, trying to make them appear presentable, and fobbing them off to reporters. Although their proposals cannot withstand serious scrutiny, the average citizen wouldn't know it because the news media, so lax in covering them, have become part of the problem.

A classic example is that of Grover Norquist, who, among other titles, is president of group called Americans for Tax Reform. Norquist is against cutting any of the tax expenditures, aka tax subsidies to special interests like the oil industry, whether they are justified or not, because that would be “raising taxes”. Whose taxes exactly? Not yours or mine. (There is one issue on which Norquist deserves to be heard: removing troops from Afghanistan. Beyond that, it is hard to find any instance in which he takes a side that benefits any but the very powerful.)

The ultimate irony is that Congress cannot solve our economic problems as long as the Tea Party members in Congress force House Republicans to reject proposals that don’t radically cut spending and taxes. No one disputes that we have to take action to cut the deficit. I know of no reputable economist who doesn’t believe that will have to entail cutting tax expenditures, i.e., closing the loopholes in the tax code that subsidize special interests, and cutting future spending. But most of the Tea Party proposals would be costly to the middle class, lowering demand and slowing economic recovery. The only ones who would benefit from the proposed tax and spending cuts are the very wealthy who, not surprisingly, proposed the idea in the first place.

The government will continue to be dysfunctional until the media explain to middle-income citizens why they are hurting so badly and what needs to be done. Real reform would simplify the tax code. It would eliminate tax expenditures that subsidize the multinational corporations’ export of jobs and profits. It would really regulate Wall Street so that the taxpayers are not on the hook for those who are “too big to fail”. It would require hedge fund operators to pay taxes on their exorbitant profits like us mere mortals. Money needs to be put into infrastructure and education so that our children will not become victims of an ideology designed by the very rich and powerful and promoted by so-called think tanks. The media need to explain that, also.
 



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