President Barack Obama is proposing to extend the Bush tax cuts for middle class families while letting tax cuts for those earning over $250,000 expire. He believes that we must grow our economy from “the middle class out” and that the rich “can afford to pay a little more.” In my humble opinion, this is smart legislation and good political strategy.
I am a supporter of our President. During the midst of the recession, he refused to raise taxes as that was an unwise thing to do at that time. Despite protestations from the left wing, Obama extended the Bush tax cuts for everyone for another two years back in 2010. He said it was the right thing to do for jobs and it was the right thing to do for the middle class.
Republicans like to say that, “you can’t tax a nation into prosperity.” We Democrats like to say, “you can’t balance the budget on the backs of the middle class.” We know just as well that you can’t tax a nation into prosperity, but we don’t possess knee-jerk reactions against taxes. We are not anti-business. Most small businesses are not in the top 1%. Most small businesses are run by middle class and working class people who provide vital products and services to the community in order to pay for their mortgage, put food on the table, and send their kids to school.
I believe that raising the tax rate for top earners back to 1990 levels (39.6%) is not class warfare. We have come a long way from when the top tax rate was 70%.
We cannot have an honest conversation about how to pay down the debt and close the deficit if we do not talk about tax increases to go along with spending cuts. A multi-millionaire can pay the difference between the Clinton-era tax rate and the Bush-era tax rate like it is chump change. A middle class and working class family cannot. To a multi-millionaire, $5000 can pay for a lavish party. For the middle class and the working class, $5000 does not even cover one semester of college for a child.
Those who can afford to pay a little bit more should do so. Those who can’t should not. Societies with strong middle classes have stronger economies in the long run and more stable societies. We need to fix our financial situation. It did not happen overnight and it will not be fixed overnight, but we cannot let partisan bickering cause our working families to suffer.
On the issue of this matter being part of a political strategy, the President also has an advantage. Anti-tax advocate Grover Norquist is the de facto leader of the Republican Party. He and his numerous followers in the Republican Party oppose all tax increases, fee increases, and even see red light cameras as a tax instead of a penalty for breaking the law. The latter is pretty crazy!
Obama will push his middle class tax cuts. However, without tax cuts for the rich included, Republicans will balk. Two things will happen after that.
1. The legislation dies and Obama can blame obstructionist Congressional Republicans for putting the middle class at risk. Everyone on both sides believes in middle class tax cuts, but this legislation died all because Republicans wanted to cut taxes for the top 1%, the very people on Wall Street who have fleeced Main Street, and won’t let middle class tax cuts go by without getting some for the rich as well.
2. Despite making statements that he wants to let the Bush tax cuts expire for top earners this time around, Obama could once again compromise like he did in 2010 and extend the Bush tax cuts for all. The policy is not ideal and this will especially anger the left wing, but they will vote for Obama anyway because they can’t stand the alternative. This will also make Obama look like a leader who can get things done by making concessions in order to advance his priorities.
Either way, the spin doctors on both sides will have a field day with this.