Don't we all support small businesses?

A study done by the National Center for Policy Analysis has the current health care law negatively impacting the incentives for small businesses to hire more workers. This is likely due to the provision which provides a 50% tax credit for businesses with less than 10 employees, who make an average of $25,000 a year. The tax credit is reduced as more employees are hired. This naturally gives an incentive to keep businesses small. Why is this a bad thing? Local businesses do wonders for both working conditions and community development. Small businesses are run by locals, who keep most of the earnings in the community. This stimulates the local economy and keeps the wages of the management from skyrocketing out of proportion. In terms of the health care law, small businesses are the ones who need the most assistance with providing health coverage, and do wonders for the local community.

Yay, spending cuts!

House Republican minority whip Eric Cantor has now released a fun online interactive tool. It allows participants to choose their favorite spending cut, and the winners will be voted on in the house sometime in the future. How fun! Lets take a loot at some of these cuts:

1.) Presidential Election Fund

2.) Taxpayer subsidized union activities

3.) HUD program for doctoral dissertations

4.) Welfare

5.) Community Development Block Grants

This all seems really fun. Lets take a pick; do you want to cut funding for presidential elections so corporations control our elections? How about reduce wages and benefits? Maybe eliminate your safety net if you are unemployed and cannot find a job? Or maybe tell your community to fend for itself if its economically disadvantaged?

This interactive tool masks the true cost of spending cuts. Spending cuts should be the last option on the table when our taxes are at our lowest levels since the Truman administration. Why are we even considering the most painful option first, without even considering raising our unrealistically low taxes? When we have to make painful decisions, we should not even be considering spending cuts during a recession. And if you're going cut welfare for poor Americans, lets have the decency not to make a game out of it.

High taxes? Yeah right.

As tax day approaches, around 35% of Americans actually believe that Obama has raised taxes on them. The media has been focused for so long on the Tea Party movement that seeks among other things to lower taxes which they view as having gone up under the Democrats. So this will be news to some of the country, that Obama in fact passed the largest tax cut in recent history as a part of the American Recovery and Reinvestment Act of 2009. Tax refunds in the form of a Making Work Pay tax credit are at their highest levels for at least twenty years. So what makes people think that the Democrats have raised taxes?

First of all, Democrats have mostly been supportive of tax increases more recently. They opposed the Bush tax cuts, supported Bill Clinton's tax increases, and have proposed numerous other ideas such as the carbon tax and tax on high end insurance policies. The truth of the matter is: Democrats would raise our taxes if presented with the opportunity to do so.

Now I agree with Paul Krugman in that I believe that the Republicans don't oppose taxes because they believe in "fiscal responsibility". The Republicans realized in the 1970s that they could not cut spending on Social Security, Medicare and other popular programs without facing a massive public backlash. At this point they began a strategy that deprived these programs of funding so the government would be forced to eliminate them. And how could they go about cutting spending? By cutting taxes.

Clearly the Republicans are winning the messaging war over the tax issue. When you have Democrats bragging about cutting taxes, clearly there has been a paradigm shift in America. But there is a difference between the parties on this issue. The Democrats have cut taxes on the middle and lower class whereas the Republicans have cut taxes for the wealthy. Liberals, including myself, have always argued that the wealthy should pay the most taxes because they have the ability to pay them. Also, depriving the upper classes of inherited wealth leads to increased social mobility, hence the American dream.

So the next time the Republicans say they want to cut taxes, lets ask them whose taxes they want to cut and for what purpose. As far as the Democrats go, the middle class should not see their taxes go up disproportionately under Obama though everyone will have to help bring down our deficit.