2012 Tuesday: Obama gives ‘tax the rich’ one more heave

We learned a few things yesterday with President Obama’s announcement that he wants to extend the current individual income tax rates for one more year, but only for those making less than $250,000 a year:

  • The current rates — commonly described as the “Bush tax cuts” even though they have been in full force for nine years, two years of which required Obama’s signature — apply to more than just “the rich.” Otherwise, how could they be extended for everyone who isn’t rich?
  • Even Obama understands that the economy is still too weak to withstand a major tax hike during the next presidential administration (his second, or Mitt Romney’s first). That is a pretty strong, if tacit, admission that his entire first term has failed to see a middle-class recovery of any consequence, just a stop to the bleeding — at most. Once upon a time, he theorized that such a result would lead to a “one-term proposition” for himself.
  • This move has nothing to do with being serious about the deficit, because the vast majority of the budgetary effects relate to the rates for sub-$250,000 earners, and always have.
  • If Obama were serious about the deficit, he would join other notable Democrats — and Republicans — in embracing the proposals of the Bowles-Simpson report he commissioned. Among other things, this would mean lowering rates across the board, while broadening the tax code to eliminate loopholes, carve-outs and subsidies/spending disguised as tax breaks.
  • If it doesn’t have anything to do with the deficit, it’s plainly about politics. But it’s the same “eat the rich” politics that Obama and the Democrats tried in 2010 — and which cost them spectacularly in the midterm elections. Maybe he thinks it will play better this time because his opponent is (like him) a rich guy, but I suspect most Americans still care more about what each candidate’s policies mean for their own wallets than those of other people.
  • Even other top Democrats think $250,000 is too low of a threshold: House Minority Leader Nancy Pelosi and Sen. Chuck Schumer previously argued for keeping rates steady for anyone earning up to $1 million. Obama is out of step with his own party’s leadership and trying to lead Democrats even further to the left on this issue.
  • This president still doesn’t have any new ideas. Tax the rich, borrow and spend more money, make government bigger with proposals that in some cases have been around for decades — these are the same things he’s been trotting out for four years, with the result of mediocre approval ratings and an electorate sour on the direction the nation is taking.
  • There is an enormous opportunity for Romney to talk about the need to avoid the path on which Obama would take us — to explain the benefits of free enterprise and the fairness of rewarding people for the work they do and the risks they take. But he must make that case, and not count on a strategy of criticizing Obama’s class-warfare rhetoric.

The basic campaign messages of each side so far amount to:

Romney: Obama has failed!

Obama: Never mind that; Romney is an evil, rich capitalist!

Of the two, Romney’s message has the better chance of resonating with American voters. But he must pair it with a vision of what success would look like and how he would lead us there. Obama is giving him yet another opportunity to do that. He has to start acting on those opportunities.

– By Kyle Wingfield

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335 comments Add your comment

ByteMe

July 10th, 2012
11:07 am

Still whistling past the graveyard, Kyle. Romney’s message is NOT resonating at all. Polls are showing that in the swing states when people are changing their minds, they are changing them 5:1 in favor of Obama. Romney’s base is not excited at all by his lack of a message other than “I’ll do it better, but I won’t tell you how!” Into that vacuum, hammering on Romney hiding his money in overseas tax havens and protecting the privileged class is going to have an effect where it counts most: swing states.

Even Obama understands that the economy is still too weak to withstand a major tax hike during the next presidential administration (his second, or Mitt Romney’s first).

The economy is not “too weak”. We’re in year 3 of a business expansion. That’s late in the typical business cycle. A recession is going to happen and likely within a year. For politicians, it’s better for it to happen at the beginning of a new political cycle than at the end.

Let all the tax breaks expire at the end of the year. 5-6 quarters later, we’ll be back in a new recovery. Just in time for the next election.

ByteMe

July 10th, 2012
11:08 am

Ooohhh, comments not in moderation again?

This probably won’t turn out well.

Tiberius - pulling the tail of the left AND right when needed

July 10th, 2012
11:17 am

“If it doesn’t have anything to do with the deficit, it’s plainly about politics.”

It’s ALWAYS about politics with Obama. They have shown no capacity to provide leadership in over 3 years; only “How do we make ourselves look good in the eyes of the electorate” talking points.

jconservative

July 10th, 2012
11:20 am

Most of said months ago that if the election was about Obama he would lose. To date Obama has made the election about Romney and he is staying in the race as a result.

Romney needs to come clean on his finances and return the campaign to being about Obama.

Mr_B

July 10th, 2012
11:22 am

Given the rate at which the economy was hemorrhaging jobs and value in 2007-2009, “stopping the bleeding” as you call it looks pretty good. Romney’s prescription would have been to “take two tax cuts and call me in the morning.”

Dusty

July 10th, 2012
11:23 am

Kyle, I hope Romney is listening to what you say. He’s got to say it loud and clear. Obama is raising taxes and it hurts every citizen but especially even modestly rich people in his latest ruling..

Unfortunately, Obama is appealing to the majority of his supporters who seem to believe that all people who make a good living (over $250,000) are evil rich who must be punished. He wants to keep their vote.

What next? We get the Bastille and the guillotine for those “evil” rich people?

JV

July 10th, 2012
11:24 am

Excellent commentary Kyle. Keep up the good work.

Tiberius - pulling the tail of the left AND right when needed

July 10th, 2012
11:25 am

“Romney needs to come clean on his finances”

Why? They are in a trust. He has nothing to do with them.

More Obama deflecting from his dismal record.

Mr_B

July 10th, 2012
11:26 am

“It’s ALWAYS about politics with Obama”

Of course its about politics. That’s the way we make decisions in our society; determine which of a number of different options is the best one to follow in a given situation. Want a place with no politics, try the Peoples Republic of Korea.

Mr. Holmes

July 10th, 2012
11:27 am

2012 Tuesday: Obama gives ‘tax policy change that enjoys >60% approval’ one more heave”

There, Kyle. Fixed the headline for you.

I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin...

July 10th, 2012
11:27 am

This is clearly an attack on small business, forcing layoffs and creating more government dependent democrat voters.

And for the middle class who think they are getting something from obozo – wait until you see how obozocare makes this look completely insignificant.

Rafe Hollister, suffering through Oblamer's ineptocracy

July 10th, 2012
11:28 am

The “revenue” raised by not extending the cuts for taxpayers over $250,000 will fund the fed government for 8,5 days, that is it! Once again, he has proposed no spending cuts.

This brings to mind something I heard him say the other day and the light that went off in my thick head. He said something to the effect, that Romney’s plan to address the economy will not fix the economy for all the people. He emphasized “ALL” the people. Whammo it hit me.

What I think he was implying there is that, Romney’s policies might return the economy to what we had before, think the 80’s, but we are not going back there, if he has anything to do with it.

I think, MO only, that he knows how to fix the economy for the people that have always benefited from a booming economy, but he knows his people will be left behind once again. He is choosing to let most of America suffer, while he tries things that will help what he thinks are his supporters, the unprepared and unmotivated.

To me he was telegraphing his intentions to fundamentally change our economy into one where wealth is redistributed, and outcomes are equal, and in his mind, all benefit.

Ray

July 10th, 2012
11:28 am

And, how many more times will the GOP try to take away the mortgage interest deduction just to lower and flatten the tax rates? The Democrats are trying to save the middle class, while the GOP works tax laws to benefit the top 1%.

Most business owners, or “job creators” are not in the top 1%, and are far from it. We need to strengthen the middle class.

DannyX

July 10th, 2012
11:29 am

“Most of said months ago that if the election was about Obama he would lose.”

Well Kyle is doing his part. Another blog about Obama, which I understand to an extent.

However, Kyle rarely, if ever, writes about Romney and his ideas. Romney never talks about anything of substance. Maybe Kyle hasn’t “fallen in love” with Romney yet. Seems like that is a problem with a lot of Republicans.

What is the plan Mitt?

Tiberius - pulling the tail of the left AND right when needed

July 10th, 2012
11:30 am

“Of course its about politics. That’s the way we make decisions in our society; determine which of a number of different options is the best one to follow in a given situation.”

Mr. B, SOME people actually vote on POLICIES and PERFORMANCE, not on politics.

We call them responsible, intelligent voters.

Don't Forget

July 10th, 2012
11:31 am

You can’t fix anything if you don’t make the correct diagnosis. This applies to your car, your health, your computer and yes to our economy. When Reagan took office the problem was, largely, on the supply side. Most taxes were double what they are today. Raising taxes on the wealthy is not punishment it is based on the fact that don’t provide the demand like the middle class does. Governing by ideology, whether it is from the right or the left is doomed to failure once the conditions change. It is not 1980 and supply side is no longer working.

JDW

July 10th, 2012
11:34 am

I think he is wrong. He should let the misguided tax cuts expire. Fact is they have done no good whatsoever and tons of harm.

Interesting to see Kyle tout Bowles-Simpson which is the right path. It moves us to where I think we ultimately end up with spending and revenues in equilibrium at around 21% of GDP. Kyle is this a shift? You usually like to shoot for 18% of GDP.

Of course as always the problem is that we have a choice between Obama who wants to move too slowly in the correct direction and Romney who wants to go backwards.

Mr_B

July 10th, 2012
11:34 am

“The “revenue” raised by not extending the cuts for taxpayers over $250,000 will fund the fed government for 8,5 days, that is it”

Or, approximately 2.33%. If someone offered me a 2 1/3 percent raise, I sure wouldn’t turn it down.

Don't Forget

July 10th, 2012
11:37 am

A little off topic Kyle but I applaud your attempt to restore civility. The fact is that on almost any topic, there are intelligent points to be made by either side. I’ll make one suggestion though. You can increase the civiity of the blog by increasing the civility of the bloggers names. Partisanship is one thing but there are those who taunt every time they post by using taunts in their names.

Tiberius - pulling the tail of the left AND right when needed

July 10th, 2012
11:37 am

How many times must you be told to Google Romney’s 59-point economic plan before it sinks in, DannyX?

Just because you don’t like it, doesn’t mean it doesn’t exist, nor have more substance than Obama’s “Tax the rich and run up the deficit with more stimulus that doesn’t work” plan.

Gravy Train

July 10th, 2012
11:37 am

There is nothing wrong with being a capitalist. What’s wrong is using your money to rig the system in your favor. For example there is the case of Bane Capital being one of the primary sponsors of the Supreme Court case that eventually classified corporations as individuals. What is Willard’s “plan” then? Up to today, we’ve heard nothing but hot air and positions that change with the wind from the Romney camp. The “weak economy” statement is weak when you consider that the Grand Poo-bah of the GOP, Ronald Reagan, raised taxes multiple times during his tenure also during “weak economies.” All of the loopholes and shelters that top earners have implicated through their bought politicians should be removed, then there would be no need for a tax increase because they will actually be paying taxes then. I would also like to see a penalty put on folks who hide their money overseas to avoid taxation. Also, this may sound a bit myopic, but, it’s only a matter of time until Romney has to deal with his cult affiliation and how that cult defines themselves as the “one true church” (which means that all others are false) They believe they have the power to grant priesthood to just about every male among their membership, including Willard “Mitt” Romney. (That’s right, they also call him a priest.) He doesn’t want to talk about it because he doesn’t want the true practices of his cult to be revealed. He doesn’t want to have to testify about Joseph Smith publicly.

Mr_B

July 10th, 2012
11:38 am

Tiberius: I believe that you were formerly an elected official, were you not? How did you get into office to implement any ideas you had?

There is nothing inherently evil about politics, just as there is nothing inherently evil about great wealth. Politics is just our way of sorting out ideas.

Dusty

July 10th, 2012
11:39 am

jconservative, 11:20

You want Romney to “come clean” about his finances. He already has. Background:Family enrichment, governship, business acumen, advanced degrees in business, profitable business enterprises.

How about Obama coming clean about his finances and tell us how to get rich in a hurry like he did?
Background: Community organizer, short term assistant professor, wife on advisory board, advanced degrees in law, writes a book.

Who has the most to explain about finances?

stands for decibels

July 10th, 2012
11:40 am

Obama is out of step with his own party’s leadership and trying to lead Democrats even further to the left on this issue.

Can someone provide me with evidence that Obama is out of step with the voting public on this issue?

Aquagirl

July 10th, 2012
11:40 am

What next? We get the Bastille and the guillotine for those “evil” rich people?

Like it or not, that’s what ultimately happens in a society with a few rich people at the top and everyone else way down the ladder.

stands for decibels

July 10th, 2012
11:41 am

You can increase the civiity of the blog by increasing the civility of the bloggers names

Like he said. I’ve been complaining about deliberately trollish screen handles for years, myself.

Tiberius - pulling the tail of the left AND right when needed

July 10th, 2012
11:42 am

“Or, approximately 2.33%. If someone offered me a 2 1/3 percent raise, I sure wouldn’t turn it down.”

As if you’re going to see that 2.3% in any paycheck . . . :roll:

The Fresh Prince of Bill Ayers

July 10th, 2012
11:42 am

Romney needs to articulate what he can do to improve things. If he can’t, he won’t win the swing vote. People want ideas and solutions, not another O’blamer.

JDW

July 10th, 2012
11:43 am

@Tiberius…”How many times must you be told to Google Romney’s 59-point economic plan before it sinks in”

Bullet points AREN’T a plan…they are bullet points.

From the WaPost

“It’s true that Mitt Romney has a jobs plan, and that it includes 59 bullet points. But it’s not true that Obama hasn’t released anything similarly detailed. He’s released the American Jobs Act, which has 41 bullet points on its fact sheet. So Romney has a slight advantage in bullet points. But Obama’s plan has actually been written up as a 423-page piece of legislation, making it considerably more specific than anything Romney has put forward.”

http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/07/06/comparing-romneys-and-obamas-jobs-plans/

stands for decibels

July 10th, 2012
11:44 am

What next? We get the Bastille and the guillotine for those “evil” rich people?

Well, it *is* the logical next step, after raising tax rates on income above $250K by 4.6%. Says so here in the DFH handbook.

DannyX

July 10th, 2012
11:44 am

“How many times must you be told to Google Romney’s 59-point economic plan before it sinks in, DannyX?”

Maybe Kyle can will write about Romney’s mysterious 59-point plan one of these days. It sounds important.

Obama’s tax plan is actually pretty popular. Romney on the other hand wants more tax cuts, that’s not going to sell well.

Common Sense

July 10th, 2012
11:45 am

The beauty of the Obama scheme is that he parades out folks claiming to give them tax cuts while he had done no such thing.

Extending the Bush tax cuts is not creating something new. And how have those tax cuts been working for those families he puts on display?

Poorly.

We need a new direction. Keynesian economics is a failure. See Krugman taken to task over his economic strategies(more government spending is the answer).

http://www.zerohedge.com/news/ultimate-krugman-take-down

The ONLY reason we can have so much debt and interest rates have not skyrocketed is because the Fed is buying up all that paper the government has issued. Without that buyer, rates would skyrocket.

Obama likes to speak about how he is one of America’s wealthy. How did he get there? Off the backs of working class Americans. Not by anything he has produced.

AmVet

July 10th, 2012
11:45 am

It appears that the new GOP talking point is, “broadening the tax code to eliminate loopholes, carve-outs and subsidies/spending disguised as tax breaks.”

But who is kidding who, here?

ANY attempts to reign in the gargantuan corporate welfare and welfare for the super-wealthy will be met with the same furious resistance by the Republican machinery.

Tell me that I am wrong about this Kyle.

Because I’m not sure that you can propose any specific, substantive examples that the cons would agree to…

Logical Dude

July 10th, 2012
11:47 am

Kyle says Obama will: Tax the rich, borrow and spend more money, make government bigger

Amazingly, Obama does it, as well as Republicans! Wow! BOTH sides to the SAME thing!

At this time, I’d rather have a realistic tax code (”tax and spend”) that Obama touts, than the unrealistic tax code (”borrow and spend”) that Republicans would rather have, and what Obama is doing now anyway.

I do agree, though that following Bowles- Simpson would be a good start, but of course, it will result in some unpopularity. Tough decisions are unpopular, but MUST be done. Unfortunately BOTH sides have not had the guts to go through these tough decisions.

Tiberius - pulling the tail of the left AND right when needed

July 10th, 2012
11:47 am

“How did you get into office to implement any ideas you had? ”

The tried and true way – bribes and kickbacks. ;)

Actually, I told voters what I believed and what I’d try to do – NOT what I thought they wanted to hear.

Tiberius - pulling the tail of the left AND right when needed

July 10th, 2012
11:48 am

And I see it only took Gravy Train about 30 minutes to throw down the religious bigotry card.

JDW

July 10th, 2012
11:49 am

@Dusty…”Who has the most to explain about finances?”

Romney by far. Outside of tax havens, offshore companies and Swiss bank accounts the bit I really want to know is how one amasses $100 million in a 401K…when contribution limits run around $22K per year now and much less when he was contributing.

The only way is pure fraud by stuffing it full of deliberately undervalued assets in an attempt to avoid taxes.

Don't Forget

July 10th, 2012
11:50 am

•If Obama were serious about the deficit, he would join other notable Democrats — and Republicans — in embracing the proposals of the Bowles-Simpson report he commissioned. Among other things, this would mean lowering rates across the board, while broadening the tax code to eliminate loopholes, carve-outs and subsidies/spending disguised as tax breaks.

I also with Obama would come out in support of Simpson Bowles but lets be real about this. Simpson Bowles was put to a vote in the house in March of this year. It got crushed. The final tally was 382-38. Twenty-two of the supporters were Democrats, while 16 were Republicans. But overall, the rejection was overwhelming, and overwhelmingly bipartisan.

This was, of course, what the White House always complained would happen if they had listened to the pundits and brought Simpson-Bowles to a vote. Republicans would reject it because it included $2 trillion in new taxes and $800 billion in defense cuts. Democrats would reject it because they weren’t going to vote for a doomed proposal that included deep Medicare and Social Security cuts in addition to a large tax increase just to show how much they cared about deficits.

Tiberius - pulling the tail of the left AND right when needed

July 10th, 2012
11:53 am

“But Obama’s plan has actually been written up as a 423-page piece of legislation, making it considerably more specific than anything Romney has put forward.”

Well considering Obama is actually IN office, one would expect him to actually have a bill in place (even if it is tax, borrow, and spend – why that takes 423 pages is beyond me).

I have no doubt that once in office in 2013, Romney will file similar, if not separate bills to accomplish his goals.

Gravy Train

July 10th, 2012
11:59 am

Tiberius- What is bigoted about what I wrote? I did not call names. I did not make false accusations. If you do your own research on Joseph Smith and the LDS movement, you will see that I provided only facts, not opinions. When a man is running for the most important office in the world, we should examine him as thoroughly as was Mr. Obama (attempts to link him to Islam, domestic terrorism, inflammatory comments by his minister). Unfortunately for Willard, his connection to a cult and the cult’s financial connection to Willard is a matter of facts and should be considered by anyone with a fully functioning brain.

iggy

July 10th, 2012
12:00 pm

Obama is just pitiful and sad.

eagle1

July 10th, 2012
12:01 pm

OBummer,

Worst President ever! He doesn’t have a clue about fixing the economy! Come on November, so we can get this bafoon and his idiot ole lady out of the White House!

td

July 10th, 2012
12:01 pm

DannyX

July 10th, 2012
11:29 am

This is because all re election campaigns of an incumbent is about if that person has a good enough record to deserve a second term (will be the same thing in the governors race here in two years). Voters will look to see if the other person running is qualified (many Dems including Bill Clinton) have said Romney is more then qualified to be Presidents but then the rest of the race is suppose to be about the record of the incumbent.

1961_Xer

July 10th, 2012
12:04 pm

The basic campaign messages of each side so far amount to:

Romney: Obama has failed!

Obama: Never mind that; Romney is an evil, rich capitalist!

Bingo! Of the two arguments, the one that affects ME most is:

“Obama has FAILED”

Let me tell you a story about venture capital. I have worked for two firms (still working at one of them) that were funded by venture capital. The first was sold to a fortune 500 company, where I got a 50% pay raise and stock incentives. I continued to work there for 10 more years. The company I am at now is also funded by venture capital, and has been for about 8 years. They could have pulled the plug at any time, and let 80 people lose their jobs. But they have stuck with it, and we will make a profit for the first time this year.

I owe ~6 years of my working life to venture capitalists who thought enough of our company to fund us and (my) our salaries. If the company fails, it will not be their fault for sending 80 people to the unemployment lines. They should be commended for pumping millions of dollars into this company while waiting patiently for a return on their investment… a return that is not, and was never, guaranteed. They aren’t doing this to be kind to our 80 employees. They want only one thing in return: a profit. They are not evil. They have MILLION$ on the line. They might lose it all, and it certainly looked that way a few years back.

So yeah, I am a middle class worker who realizes that Obama’s class warfare line misses the mark. The folks who fund us are not Bain Capital in size. They are a local venture firm with about $25 million in local investments in 5 companies. They are responsible for keeping about 500 people in jobs in Atlanta, at the risk of their own $$$. They are not evil. To the 500 of us employed through this recession, they are a godsend.

Tiberius - pulling the tail of the left AND right when needed

July 10th, 2012
12:06 pm

“What is bigoted about what I wrote?”

Oh, gee, I don’t know . . . . How about calling his religion “a cult”?

And then doubling down on it?

And does it really matter to you what Romney’s religion is, or are you simply typing in more talking points because you don’t like his policies?

Really, Gravy Train?

From the Center

July 10th, 2012
12:09 pm

“Can someone provide me with evidence that Obama is out of step with the voting public on this issue?”

November 7th will provide the evidence

AmVet

July 10th, 2012
12:09 pm

Of course, Mitt is qualified to be POTUS.

Like everyone of his recent predecessors he will dutifully take his marching orders from his paymasters on Wall Street, K Street and in corporate board rooms across the land.

His ethics are the real question? He appears staggeringly unprincipled to me.

And has completely reversed himself on a wide range of topics from gun control to abortion to support for Ronald Reagan’s policies to signing a no-tax pledge to stem cell research to lying about seeing his dad march with MLK Jr to the grand daddy of them all individual mandates and socialized health care…

I honestly don’t think that there is much of ANYTHING he won’t compromise himself on to get a few more votes…

carlosgvv

July 10th, 2012
12:11 pm

Obama is simply asking the rich to pay their fair share of taxes.

As to the objection that this will punish the job creators – if they were truly creating jobs we would not still have an over 8% unemployment rate.

eagle1

July 10th, 2012
12:12 pm

There is no way America can survive 4 more years of Obama’s ultra liberal, racist, class warfare policies!!!!! He will bankrupt the country in 4 more years! He is totally unqualified to be POTUS!

JDW

July 10th, 2012
12:13 pm

@Tiberius…”I have no doubt that once in office in 2013, Romney will file similar, if not separate bills to accomplish his goals.”

Given that as the bar I guess we will never know.