Democrats are now starting to support the Republican call to extend the Bush tax cuts. In a recent interview, Sen. Kent Conrad (D-ND) stated that, “The general rule of thumb would be you’d not want to do tax changes, tax increases … until the recovery is on more solid ground.” I’ve got to ask, what effing “recovery” is Conrad talking about? Is he referring to the Dow being over 10,000? He’s sure not talking about the 30 million Americans who are unemployed or the countless others who are underemployed, threatened, or who have seen their nest eggs decimated.

The thing that most revolts me about this “you can’t raise taxes in a recession” pitch is that it’s spoken by the same folk who are suddenly budget conscious and focused on the deficit. Most recently, Republicans fought the extension of unemployment benefits because the $34 billion price tag was not offset with corresponding spending cuts. Now those same “leaders” are fighting for a $678 billion reduction in revenue by maintaining the Bush tax cuts for the top 2%.

To support their case, they offer the same voodoo economic tenets that supply side crooks have been spewing for decades: they claim that “tax cuts pay for themselves.” Of course, nobody actually believes this — not even the liars who say it’s so. Everyone knows that there’s ZERO empirical evidence to support this claim. In fact, all evidence supports exactly the opposite.

In a 2005 Congressional Budget Office study looking at the macroeconomic impact of an across-the-board 10% tax cut, the CBO estimated that the BEST CASE return was an offset of the loss in revenue by 22% over the first 5 years and by 32% over the second 5 year period. And those were their most optimistic projections. Their more conservative assumptions concluded that the offset over the first 5 years would be only 1%, and that the second period would actually experience a 5% increase in lost revenue. Also, it’s important to keep in mind that this study looked at across-the-board cuts, for rich and poor alike. If the cuts were isolated to only the top rates, even less of the money would find its way back into the economy.

Mark Zandi, head economist for Moody’s, provided analysis in 2009 that supports a similar conclusion. His study of the Fiscal Stimulus of 2008 shows that general tax cuts will increase the GDP by only $1.03 for every dollar of tax relief. The increase in GDP would then theoretically be taxed at some marginal rate, which at present would return no more than $0.36 in tax revenues. The bottom line is that while economists might debate whether or when tax cuts are good for the economy, they virtually all agree that cuts don’t pay for themselves.

But, where tax cuts have questionable impact, government spending provides a much better return. In stark contrast to the weak stimulus provided by tax cuts, the Zandi study concluded that an extension of unemployment benefits would grow the GDP by $1.63 for every dollar spent. The same study estimated every dollar of increased infrastructure spending would return $1.59.

So, why is it again — that we have to offset increased spending, but we don’t have to cover tax cuts?

Oh yeah . . . I remember — it’s because we need jobs, and those tax cuts for the rich are supposed to produce them.

But, wait a minute. Haven’t we tried that before? Weren’t the Bush tax cuts supposed to produce millions of jobs?

Actually, the Bush administration sold the tax cuts of 2003 by claiming they would create 1.4 million new jobs. These jobs were supposed to add to the 4.1 million jobs “expected” from earlier efforts. But in the end, only 2.4 million jobs were ever created. Of course, this shouldn’t come as a surprise, since the entire boom cycle of the Bush years only produced 5.6 million new jobs. In fact, the Bush era had the slowest rate of average job growth of any cycle since 1945, and it was even worse for those in their prime work years (ages 25 to 54), where only 1.8 million jobs were added throughout the Bush cycle.

The sad truth is that we spent most of the past decade testing the effectiveness of growing the economy and creating jobs by cutting taxes, and the entire process has been proven to be an abysmal failure. The first decade of this century produced ZERO net job growth, while no other decade going back to the 1940s produced less than 20%. Do we really want more of this medicine?

What the supply-side fallacy of tax cuts for the rich actually produces is intuitively obvious to even the most conservative observer — it’s more money for the rich. Those very same Bush policies that added all those jobs also brought the after-tax income of the top 1% to it’s highest level since 1979 (17.1%), concentrated more wealth in the top 1% than the bottom 90%, and gave average Americans the first decline of median household income of any cycle since 1967.

There’s only one reason that Republicans, and some Democrats, support tax cuts for the rich, and it’s best summed up by none other than G.W. himself: spoken at the Al Smith dinner in 2000, “This is an impressive crowd — the haves and the have mores. Some people call you the elite — I call you my base.” They owe their allegiance to the wealthy; they willfully sacrifice the average American for the top 2%; they paint government as the problem, knowing that it’s the only hope of The People, and they will do or say anything to serve themselves and further their elitist goals.

The American middle class was created through a system designed to effectively and ethically share the wealth of our great nation. At the core of that system was a structure of progressive taxation that provided the revenue required for it to function. That progressive structure once asked much of those who gained the most, and for decades it worked well. It worked to pay off the war debt and create the programs of the New Deal. But it stopped working in the 1980s, when movement conservatism worked to cut the top rates in half. It doesn’t work today for the same reason. Now those same conservatives are at work again — working to save money for their elite, working to starve government, working to end the American middle class.

Distribution of earnings is drastically skewed toward the very top, but regardless, with a GDP that’s grown 14 times larger since 1970, at least our nation must be doing well as a whole — right? Well . . . not so quick.

While the very rich have taken a constantly growing portion of the national pie, the same fallacious neoclassical economic policy that started the drain has steadily reduced their tax burden. American infrastructure is falling apart; manufacturing has all but vanished; jobs have disappeared overseas, and average wages are becoming increasingly depressed. The federal government has tried to address some of these issues, but with a debt currently pushing $13 trillion, Americans are ill at ease with more government spending. But, the bottom line is that the federal government has not the revenue to do anything without further increasing the debt.

Again, the problem isn’t lack of American productivity. The problem is a broken social contract with the American people. Our system is a democratic form of capitalism. Capitalism stresses the virtue of the free market and brings us more value and lower prices as consumers, along with higher returns as investors. American market economics have thrived for the past several decades. This is evidenced in our GDP. But what sets America apart is not our capitalism — China is now a capitalist society. The American difference is our democracy. But sadly, while our free market is triumphant, our democracy is in shambles.

Nobody wants to see their hard-earned money siphoned away in the form of taxes, but we all must do our part to help fund the shared services that government provides. This burden was once metered out in accordance with the degree to which benefit was gained from the economy. Our progressive income tax system is predicated on the idea that the more an individual earns, the more benefit they extract from the system, and the better their capacity to chip in with taxes. The concept was to fund needed governmental services while mitigating the impact on the average American’s ability to acquire the basic necessities of life. In order to achieve this, tax tables were designed to take a minimum from the earnings needed for essentials, and a progressively larger chunk as discretionary income grew.

Under Republican President, Dwight D. Eisenhower, the top marginal tax bracket was set at 91 percent. Under President John F. Kennedy, the top rate was cut to 70 percent. That rate remained relatively constant until 1980 and the birth of Reaganomics. Since then it’s been cut in half to 35 percent. There’s no mystery who benefitted from these changes, but the story doesn’t end there. Equally troubling as the top rate is the threshold at which it takes effect. Since 1942, that point has ranged between $200 thousand and $400 thousand. But it wasn’t always such. From 1936 until 1942, the threshold for the top bracket was $5 million, which equates to around $75 million in today’s dollars. In 1941, the associated tax rate for that top bracket was 81.1 percent. For 2010, the top rate kicks in at $373,650 and the 35 percent applies to all incomes above that point.

The progressive structure was intended to ensure that everyone pays the same percentage of earnings up to each stepped threshold. Those folk who paid 81.1 percent in 1941 did so only on the portion of their earnings over $5 million. Today, a person earning $50,000 would have their earnings above $34,000 taxed at 25 percent. Another taxpayer who earns $250,000 would find their top marginal rate to be 33 percent. In this example, the higher income individual makes 5 times the earnings and pays an additional 8 percent at their highest step. Does this sound fair to you? It does to me, and I’ve spent most of my adult life as the guy paying the larger chunk. What bothers me is that the equity of this example is soon lost when the truly rich enter the picture. You have to ask yourself, what possible rationale is there for the person earning 5 times more again, or $1.25 million, only paying an additional 2 percent? Why do the progressive steps end where they do?

The answer is simple — there is no legitimate rationale; there’s only a failure of our political system to serve The People. Our government has been bought by the rich, and our media is owned by them. They’ve managed to play on middle-class fears and cast “redistribution of wealth” as a negative term that evokes visions of hard-earned dollars becoming handouts to the needy (or as more often portrayed — the lazy). This diversion has drawn attention while the real redistribution of wealth was occurring right under our noses. Their misdirection has been extremely successful. They managed to effectively redistribute the wealth directly to themselves, and they did so at the expense of the middle class.

It’s time for the heart of America to open their eyes and stop believing the lies perpetrated on us by the new American royalty. Trickle-down was a fallacy, and Reaganomics an unmitigated disaster for the average American. The policies of the past 30 years have done nothing but serve the rich and further widen the gap between the haves and have-nots. The call for small government is nothing more than code talk for capitalism over democracy and further deterioration of the middle class. We don’t need small government; we need effective, right-sized government. We need jobs and education and sound energy policy. We need infrastructure, emergency services, healthcare, security . . . and we need the tax revenues to pay for them without piling on more debt.

It time we wake up. We’ve been sold a bad bill of goods. The American dream is being stolen, and it isn’t by the poor. The thieves are the very rich, and they want us distracted. We must stop buying their diversion and keep our eye on the ball. We can no longer afford to allow ourselves to be taken in by sound bites and talking points. Instead, we must seek the facts and make up our own minds.

We are The People, and it’s up to Us to save America.

“But that’s because MEG 2010: Building a New California isn’t really a policy document. It’s more like a text-based game of Three-card Monte. Keep your eye on the red queen.”

Chris Kelly, Writer for Bill Maher

I’m a Californian, and this Meg Whitman thing is pretty darn scary. She has a bunch of money and is willing to spend whatever it takes to get elected. Of course, if she can eliminate capital gains tax, she’ll get an immediate return on her campaign investment.

Right now, Meg’s winning the battle for name recognition hands down, and that’s sadly how you get elcted. She’s playing on the same distorted mental models that the conservatives always uphold: government is inefficient and rips off the public by taking taxes and wasting money . . . so, the solution must be to cut taxes, right? It’s just so much talking point BS: America Needs Dialog, and unfortunately — it works!

When will a serious politician stand up and refute the fallacy of trickle-down? When will we as a people take an honest look at what conservative tax reforms have done to the division of wealth and power in America?

I’m sorry rich folk, but you have prospered on the backs of the poor and middle class for far too long. It’s time you pay your fair share! I’ve spent much of my adult life at the unenviable bottom of the top marginal tax rate, with insufficient funds to invest. I’ve also benefited from Prop-13 but fully understand what it’s done to State revenues. I’m willing to pay more to help fix the problems plaguing California and the Country, but I want those who have taken the most to give a little back.

This article provides some serious insight into who Meg Whitman really is. I hope my fellow Californians read, heed, and get their eyes opened before the axe falls in November:

Read the Article at HuffingtonPost