Fiscal Cliff Deal Favors the Wealthy, But Don’t Tell Anybody

President Obama and the American people scored a major victory with the recent Fiscal Cliff deal. At least, this is what we’re supposed to believe. That is, if you listen to “certain people” in the media of course. I don’t really feel like naming names, but let’s just say that there’s a lot that they’re not telling you. Surely they’re telling you that this is a major victory because taxes were raised on the super wealthy in America. The truth, however, is that the Fiscal Cliff deal favors the wealthy, but don’t tell anybody. Let them tell it, Obama has fulfilled yet another campaign promise. Yes, thanks to the Fiscal Cliff deal, the wealthy in America are finally paying their fair share in taxes. Yes, score this as a win because with the simple stroke of the pen, everything’s equal in America.

Or so we’re supposed to think, right?

Oh, so did you get that? Yep, eliminating the payroll tax cut not only raises taxes for workers. It also runs counter to the idea of providing any stimulus in an already slow rolling economy. This is amazing when you stop and think that the central idea behind this deal in the interest of deficit reduction. Why? Because as the CBO reports, the Cliff deal adds $4 trillion to the deficit and over 10 years, and raises an estimated $620 billion in revenue. Now I don’t know what you may think, but this isn’t a win. Seriously, considering the pending cuts to programs in two months with the Debt Ceiling charade. Where exactly would the government get any money to fund programs like an infrastructure investment in the interest of creating jobs, and boosting demand that sparks growth?

Meanwhile, checkout the clip below to see how well the wealthy made out:

So let’s recap, shall we? Taxes were only increased on 0.016% of the top earners in the country; and, of course as Think Progress points out, the deal makes it easier for corporations to pay less taxes than before. And of course this is bad because it’s not like they’ve been paying anyway:

US banks and other large cross-border companies will retain a key tax break covering billions of dollars in foreign income under this week’s fiscal cliff deal.

Extending the so-called “subpart F exception for active financing income” will allow multinationals to defer paying US taxes on certain financial transactions undertaken outside the US. The companies are taxed by the US on that income only when it is brought back to the country. […]

Companies including Bank of America, Bank of New York Mellon, Citigroup, General Electric and JPMorgan Chase have banded together to form the Active Financing Working Group, to lobby for renewing the exemption in recent years.

The group has paid $1.03m to lobbying firm Elmendorf Ryan since 2009 to campaign for the tax break to be extended, according to the Center for Responsive Politics.

Extending the exemption will cost the US Treasury some $9.4bn in lost revenue in 2013, according to estimates from the Senate Joint Tax Committee.

Yep, who needs to create jobs here in the US when you can invest overseas, and not pay a dime on your returns, right? Correct me if I’m wrong, but wasn’t this one of the reasons we refused to vote for Mitt Romney last November? OK, don’t answer that. But isn’t it nice to know that while banks are able to borrow from the Fed at 0% and sit on $1.4 trillion in cash, that 2 million unemployed people are able to get an unemployment check for at least one more year? Never mind the fact that jobs aren’t being created while interest rates will remain at 0% until the unemployment rate hits 6.5% as Ben Bernanke said recently — it’s estimated that the US will not see 6.5% unemployment until 2016. Yep, let’s just keep feeding the wealthy at the expense of the poor. So again I ask: How’s that inequality thing working out for you again? OK, don’t answer that one: I’d hate to force you to think.