Democrats Pull Away From Obama on Bush Tax Cuts
Other Democrats understand Americans can't afford a tax increase
July 11, 2012
In late 2010, President Barack Obama went against his party's grain and extended the Bush-era tax cuts for another two years because, as he said at the time, raising taxes in a struggling economy is "the last thing you want to do." Two years later, the economy continues to struggle, but the president has changed his tune. He wants to raise taxes on those making in excess of $250,000.
His goal is to put Republicans, principally presumptive presidential nominee Mitt Romney, in a bind. Either they oppose a tax cut for middle-class Americans, or they accept the president's plan and try to preserve the Bush tax cuts for the $250,000 to $1 million-per-year set in stand-alone legislation that would paint them as coddling the rich.
So far, the only politicians to feel the heat from this are Democrats in tight Senate races. Bill Nelson in Florida, Heidi Heitkamp in North Dakota, Claire McCaskill in Missouri, Bob Kerrey in Nebraska, Tim Kaine in Virginia, and Shelley Berkley in Nevada all have expressed reservations about the president's plan. Even Sen. Charles Schumer of New York, a reliable ally of the president, has suggested the limit might be too low for those in large metropolitan areas, where $250,000 doesn't go far.
And Republicans, at least so far, seem unwilling to take the bait. They point to the 940,000 small business owners who put business income on their individual returns and ask if a president who can't get unemployment below 8 percent truly wants to increase taxes on job creators. They point out the rich will take a hit on Jan. 1, 2013, regardless of whether the Bush cuts are extended because of the increase in capital gains taxes—from 15 percent to 18.8 percent—that will be used to finance Obamacare.
It's unlikely President Obama's plan will put Romney or any Republicans into a bind. Americans understand the economy won't recover until investors invest, small businesses expand, and hiring improves.
They hear about billions of dollars sitting on the sidelines awaiting some signal that certainty, growth, and vitality—as opposed to class warfare—again have become the goals of administration's economic policy. They, like Democrats running for Congress, know 3.8 million American households make $200,000 or more, and those households are unlikely to look kindly on the president's plan come November.
Charles Krauthammer says President Obama's proposal shows he has given up on growing the economy and now pins his re-election hopes on fomenting class warfare. All Romney has to do is ask Americans if it's worth it to tax away all that potential growth to raise $65 billion in additional government revenue in a country with a $1.2 trillion annual deficit. No one serious about economic growth could say it is.