How the GOP can turn Obama’s ‘I won’ attitude against him
So far, President Obama and Speaker John Boehner aren’t negotiating a way to rein in budget deficits in private this time. They’re negotiating in the press, and Obama is taking the hardest line.
While Boehner has signaled a willingness to increase tax revenue by limiting and eliminating deductions rather than by raising tax rates, Obama says his idea of compromise is to do both. He wants $1.6 trillion in new revenues over the next decade, which is double what he and Boehner nearly agreed to do during the 2011 debt-ceiling talks.
Virtually all of this new revenue would come from high earners: individuals making more than $200,000 or couples making more than $250,000. Raising their tax rates and capping their itemized deductions is estimated to bring in more than $1.43 trillion. The “Buffett Rule” would tack on another $47 billion, bringing the tab to $1.48 trillion for those at the top of what’s already the most progressive tax system in the industrialized world.
Obama is so committed to his position that his spokesman says the president will veto any tax bill that leaves rates intact for the top two income-tax brackets (currently 33 percent and 35 percent). The rates for these brackets are scheduled to expire Jan. 1 and rise to 36 percent and 39.6 percent, respectively. Problem is, the current rates for everyone else are also scheduled to expire Jan. 1.
You gotta love Obama and the Democrats. They care so much about the middle class that they will let middle-class tax rates rise, if that’s what it takes to stick it to “the rich.” Somehow, though, Obama succeeded in making a majority of the electorate believe it’s the GOP that is holding the middle class hostage by insisting on keeping all rates the same next year.
It is ludicrous to claim Republicans are playing tax-rate chicken more than the president. In fact, it’s closer to the opposite, because Boehner is saying he’s willing to raise revenues, just not in the same way as the president. Obama is not only insisting on his end but his means — and saying everyone will feel the pain if he doesn’t get both.
It’s ludicrous, but . . .
It’s also brilliant politics. Obama knows voters gave him the benefit of the doubt and that he’s got limited time to take advantage of that (as all second-term presidents do, particularly those whose party doesn’t control Congress). However, he may be able to turn it into a longer-term advantage with this little two-step:
1. Force House Republicans to accept higher taxes on “the rich” before Jan. 1 on high earners to stave off tax hikes on everyone else, for which he knows Republicans know they would be blamed; and then
2. When the GOP comes back next year seeking spending cuts and structural changes to entitlements as their part of the “balanced” “compromise” Obama keeps insisting he wants, he can either tell them to take a hike or make a deal that puts all the onus for unpopular cuts on Republicans. (I’m sorry, my fellow Americans, but just to get the rich to pay their Fair Share, those evil Republicans insisted on ending Medicare as we know it…)
Some of you will say I’m making the president out to be unserious about our fiscal challenges. To you I say: No, his two campaigns and first term revealed him to be that way.
After all, that’s the only way to explain a proposal that raises an average of $160 billion more per year — when the deficit last month alone rose to $120 billion — while double-counting spending cuts such as those for ending the Iraq and Afghanistan wars (decisions that were already made and thus don’t represent new savings) and seeking to increase expand spending (er, “investments”) in certain favored areas.
What we’re really seeing here
So, to Obama, this clearly is more about good politics than good policy. The House GOP should respond in kind.
It should pass the “Buffett Rule” bill that failed to pass the Senate in April, amended to include an extension of all current tax rates through 2013, as a down payment. While the Buffett Rule is projected to raise $47 billion during the next decade if the current tax rates for high earners are not extended, I’ve seen projections of more than $160 billion in 10 years if rates don’t rise. That’s an increase of approximately $16 billion next year, and it comes from real millionaires — not Obama’s “millionaire” couples who earn $250,00 a year.
Given the support for Obama in America’s wealthiest counties, not to mention Hollywood, I’d chalk this up to a paraphrase of Mencken: It appears the truly rich know what they want, and they deserve to get it good and hard.
At the same time, House Republicans should introduce a bill outlining the deductions-cutting approach for which Boehner has expressed support. Many deductions represent subsidies that are merely located in the tax code rather than an appropriations bill, and this approach allows Republicans to talk about the importance of getting government out of private decision-making without reducing incentives to work, save and invest (by increasing marginal tax rates). I’d go ahead and include a corresponding reduction in tax rates but make clear that’s negotiable, depending on what happens on the spending side.
What might this look like? Capping deductions at $50,000 a year would, according to an analysis by the Tax Policy Center, raise almost $750 billion over 10 years, with about 80 percent of that money coming from the top 1 percent of earners. The change in the average tax payment for the three lowest income quintiles would range from zero to $12 a year. Again, this approach does not leave taxes on “the rich” intact.
Your turn, Democrats
For now, that’s it. Dare Senate Democrats not to pass, and president to veto, a bill that includes their cherished Buffett Rule, just because it also keeps all tax rates in place for one more year while the two sides negotiate further. Further call their bluff with that second bill to raise even more revenue, almost all of it from the very highest earners, in the most economically sound way. Then, explain you’re looking forward to tackling the country’s real fiscal problems next year, and adjourn.
And leave it to Harry Reid and President Obama to explain to 99 percent of tax filers why their taxes are going up so that taxes can rise even more on the top 1 percent.
– By Kyle Wingfield
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542 comments Add your comment
Lil' Barry Bailout - OBAMAPHONE!!!
November 14th, 2012
1:21 pm
Obozo has increased spending by about $500 billion per year above what Our President Bush spent. And yes, that includes the off-budget spending.
If you doubt me, check out Obozo’s 2013 budget, table 1.1.
It’s the spending, stupid.
Finn McCool (The System isn't Broken; It's Fixed)
November 14th, 2012
1:22 pm
Fiscal Cliff is part of the shock doctrine.
http://www.alternet.org/economy/fiscal-cliff-scare-talk-follows-shock-doctrine-script
JF McNamara
November 14th, 2012
1:23 pm
Rates SHOULD rise on everyone. We all dug the hole, and we should all get a shovel. I’m hoping they fail so that this happens.
Finn McCool (The System isn't Broken; It's Fixed)
November 14th, 2012
1:24 pm
Dan is on the right page!
Centrist
November 14th, 2012
1:25 pm
It’s more than just the tax rates set to expire on the tax side of the fiscal cliff:
* The Marriage Penalty would return, so that couples who file jointly would not get the same value of a standard deduction as two single tax filers
* The Child Tax Credit would drop from $1,000 to $500
* Estate taxes would again go to 55%; the exemption would drop back to $1 million from over $5 million
* Taxes on dividends would go from 15% to the tax rate that applies to your income.
* Capital gains taxes would go to 20%, plus a possible 3.8% cap gains levy on some high income earners that is part of the Obama health reform law. That same 3.8% tax would apply to dividend income as well for those at the top end.
* The phaseouts for personal exemptions would return and certain high income earners would also see their deductions limited.
* The Social Security Payroll tax holiday approved the last two years by Congress, which costs about $120 billion per year
* A patch to keep the Alternative Minimum Tax from hitting more taxpayers
* A series of business and personal “tax extenders” like provisions that give residents of states without income taxes (Florida, for example) the ability to write off state sales taxes on their federal tax form; they also include tax breaks for NASCAR race tracks, a popular research and development tax credit and more.
* Business expensing tax provisions that were part of the Stimulus law
Dan
November 14th, 2012
1:25 pm
Kyle,
I think it is also worth noting that defense spending has also been steadily decreasing since 2010.
Finn McCool (The System isn't Broken; It's Fixed)
November 14th, 2012
1:25 pm
Sorry Barry, your message isn”t getting through. Maybe you need to charge up your Obamaphone?
You realize only Cons got Obamaphones while we libs were given Iphone 5s?
mwuahahahahahaha
Lil' Barry Bailout - OBAMAPHONE!!!
November 14th, 2012
1:26 pm
Remember when Our President Bush’s tax cuts “only benefitted the wealthy”?
Squeal, little pigs!
real john
November 14th, 2012
1:26 pm
Get ‘em Kyle:
Lefties apparently don’t understand basic math skills. You are dead on in your analysis. Lets see just how serious Obama is about taxes.
real john
November 14th, 2012
1:28 pm
Of course Kyle no one is mentined the payroll tax that will be expiring on Dec. 31. For someone making $50k a year, you can add roughly a $1000 to your taxes.
mike
November 14th, 2012
1:30 pm
“Social Security and Medicare contribute nothing to the deficit; they have their own dedicated revenue streams, which since 1987 have taken in $3 trillion more than they have paid out in order to build up a trust fund for when the Baby Boomers retire (Social Security and Medicare Trustees Report Summary, 5/5/11).
“Social Security and Medicare’s surpluses have been invested in U.S. Treasury bonds, and these will sooner or later need to be paid back; if they are not, trillions of dollars will have been extracted from U.S. workers under false pretenses. When these debts are paid back, though, U.S. taxpayers are not paying for the retirement programs a second time—rather, they are paying for the programs (and tax cuts) that the Treasury borrowed the money from the retirement programs to pay for in the first place. Thinking of these bond repayments as Social Security and Medicare adding to the deficit is like imagining that the Chinese are contributing to the deficit by building highways with the proceeds of their investments in T-bills.
But TV journalists have frequently given the public the false impression that Social Security and Medicare are responsible for the deficit. On CBS (6/17/11), Scott Pelley reported: “Social Security consumes 20 percent of the federal budget, so it’s part of the debate over how to manage America’s $14 trillion debt. When countries don’t manage debt, the trouble reaches far and wide.”
http://www.fair.org/index.php?page=4384
Just thought I’d get that in there before the shouting about Medicare begins. BTW there is a great chart showing where our deficit came from and just who is responsible for it.
Kyle Wingfield
November 14th, 2012
1:34 pm
Dan @ 1:20: Actually, the exit poll had 13% saying raise taxes for everyone, 35% for no one, 47% for those earning $250K+.
Kyle Wingfield
November 14th, 2012
1:36 pm
Dan @ 1:25: Wrong again. The last time defense spending decreased from the previous fiscal year was 1998. See Table 3.1 here.
Kyle Wingfield
November 14th, 2012
1:40 pm
mike @ 1:30: Where is that trust fund invested, and who is on the hook for the money the trust fund lent out?
Logical Dude
November 14th, 2012
1:40 pm
Kyle: this clearly is more about good politics than good policy. The House GOP should respond in kind.
No, No, No and HELL No.
this nation is tired of all of the political games. TIRED OF THE POLITICAL GAMES.
How about doing what is good for the country FIRST. “Our first priority is to make Obama a one-term president” was one of the absolute WORST policies to be undertaken by any political party. All the country hears is “we, the GOP really don’t care about you. We only care about playing politics.”
How about, for once, the politicians actually hear the people? Do what needs to be done, and who the $#&@ cares who gets credit/blame for it?
JUST DO IT!!!!
carlosgvv
November 14th, 2012
1:40 pm
Kyle – “what he said right after his first inaugration”
So, you’re still stewing over something he said over FOUR YEARS AGO???
Carrying that kind of lengthy grudge doesn’t make you look too good.
And, if Romney had been victorious, what makes you think he wouldn’t have had an “I won” attitude?
Kyle Wingfield
November 14th, 2012
1:41 pm
You’re right about the “trillions of dollars … have been extracted from U.S. workers under false pretenses” part, though.
Peadawg
November 14th, 2012
1:42 pm
“Obama says his idea of compromise is to do both”
Isn’t that what compromise is? Doing BOTH? Not just one or the other.
Good for Obama.
Kyle Wingfield
November 14th, 2012
1:42 pm
Logical @ 1:40: I happen to agree. But there’s nothing about the president upping the ante — doubling it to the last agreed-upon amount — that says “just do it.”
Lil' Barry Bailout - OBAMAPHONE!!!
November 14th, 2012
1:45 pm
Isn’t that what compromise is? Doing BOTH?
———
No.
Is there anything else I can help you with?
Kyle Wingfield
November 14th, 2012
1:45 pm
Peadawg: Silly me, I thought compromise had to do with each side giving something it didn’t want to give in exchange for getting something it wouldn’t otherwise get. That’s not Obama getting everything he wants in exchange for nothing the GOP wants (here I am talking about exclusive “wants” — i.e., keeping rates the same for the middle class is something both sides say they want).
Finn McCool (The System isn't Broken; It's Fixed)
November 14th, 2012
1:45 pm
Hear, hear, Logical Dude.
@@
November 14th, 2012
1:46 pm
He wants $1.6 trillion in new revenues over the next decade, which is double what he and Boehner nearly agreed to do during the 2011 debt-ceiling talks.
Sounds like he’s gottalotta spending to do.
Obama makes the mistake of believing revenge is a one way street. He needs a businessman date to set him back on his heels.
I’m still attached to the idea of the GOP voting “present.”
I want the far-left progressives gone once and for ALL!!!!! Letting voters experience the consequences of a left-wing agenda would gimme what I want.
nelson
November 14th, 2012
1:48 pm
This fiscal issue should be solved soon. My investments along with 1000s of others are tanking. And if that were not enough, there is a seccession movement in several states. There is a large number of unhappy citizens. Even our highest level security is being compromised, all and everywhere there is a rising tempo of discord.
All of the above being said, it is a grand time to be a witness to history coming full circle. Every day the news is over the top. I even get up in the middle of the night so I won’t miss anything.
JamVet
November 14th, 2012
1:49 pm
When Mitt “tax haven” Romney’s effective tax rate is essentially the same as those Americans whose wealth is one one-thousandth of his, something is terribly awry.
You Republicans do not want to address this. And you have tried to avoid it for a long, long time.
Now you pretty much have to address it.
Do it or suffer yet more trickle-down consequences like those from last week…
@@
November 14th, 2012
1:49 pm
Could be Obama’s just putting on a show for his base. He’s good at that…been doing it for four years.
schnirt
Peadawg
November 14th, 2012
1:49 pm
Kyle, compromise: entitlement reform (Dems don’t want) and tax increase on top 2%(GOP doesn’t want)
Fair enough?
JamVet
November 14th, 2012
1:50 pm
Sorry Barry, your message isn”t getting through. Maybe you need to charge up your Obamaphone?
Ouch.
And LOL…
@@
November 14th, 2012
1:56 pm
I guess Obama doesn’t need Billy Boy anymore. Wonder how Bill feels about being the O-pimped one.
http://www.youtube.com/watch?v=8JfZ6Z3eKqw
mike
November 14th, 2012
1:56 pm
Kyle, you’re right, the SS & MC fund has been raided by every administration and the revenues spent in the general fund. However, the United States must honor those Treasury bills. Either that or declare bankruptcy which will never happen.
Back to work. Later.
Sister Sarah
November 14th, 2012
2:02 pm
“I won” (and won again too)! Well… he DID, did he not?
Lil' Barry Bailout - OBAMAPHONE!!!
November 14th, 2012
2:03 pm
Sorry Barry, your message isn”t getting through.
——–
Funny…that’s the second lib response to my message that “isn’t getting through”.
Mr. Snarky
November 14th, 2012
2:04 pm
Should he have an “I lost” attitude?
Kyle, you’re a political genius. I’m sure the repubs will follow your instructions.
JDW
November 14th, 2012
2:04 pm
@Kyle…”I think it would be a mistake for Obama to assume everyone is interested in “rates” vs. “taxes paid.” There is a less economically destructive way to raise revenues than by raising marginal tax rates.”
Maybe, but I don’t agree. I think the rates have to go up and the deductions have to be metered at least on the high end of the income spectrum. We keep gnashing our teeth about how bad the deficit is but want to ignore the fact that revenue as a % of GDP is at historical lows and is a full 4-5 points under where it needs to be. At some point we need to stop complaining and get on with it as we did in 1993.
Now for this bit…”In any case, the deficit is never going to be closed as long as GDP is growing at 1-2% a year. The GOP needs to be willing and able to explain that, and why its policies are better for growth.”
If they could do that then we would have a President elect Romney…I don’t agree with that notion and think the mere act of setting a solid path forward that reduces the debilitating uncertainty that we currently suffer from surrounding cliffs, debt ceilings, taxes, immigration etc… will be a main reason growth starts again.
Finn McCool (The System isn't Broken; It's Fixed)
November 14th, 2012
2:04 pm
I wonder if Bill is teaching the fine art of triangulation at this very moment.
John Bailo
November 14th, 2012
2:05 pm
What we really need to do is lower the taxes for those making less than $200,000 even further.
There is no reason for anyone making under $100,000 to be paying 20% of that in Federal tax…none!
Ivan Cohen
November 14th, 2012
2:09 pm
I’d get John Boehner’s “signaled willingness” in “writing” and not with disappearing ink either. Boehner switched out before, he’d do it again. I wouldn’t put it pass him.
JDW
November 14th, 2012
2:09 pm
” there is a seccession movement in several states.”
Less than 100,000 people out of 300+ million is noise level from the lunatic fringe.
GasMan
November 14th, 2012
2:11 pm
No one seems willing to comment on Kyle’s actual proposal. There are two sides to it, the policy and politics. I think it makes a lot of sense as policy.
It might be a good political maneuver but it will not work as politics for one simple reason: you have misread the mood of the American public. The Republicans were rejected, not because their ideas were worse, but because we don’t like them (uncool, judgmental, out of touch, controlling, hypocritical, you pick it). In that light, they are going to get blamed for obstructionism, so make the best deal you can and move on.
For the record, I voted for Romney.
curious
November 14th, 2012
2:11 pm
Just like our collective disgust with Congress, except for OUR Congressman; everybody wants to cut Except when it impacts them personally.
With this attitude we would have been so hopelessly in debt after WW2, our economy would have resembled Somalis’s.
JamVet
November 14th, 2012
2:13 pm
There is no reason for anyone making under $100,000 to be paying 20% of that in Federal tax…none!
Agreed.
But now that most HUGE welfare-fed corporations are paying a fraction of the percentage of of the share of revenues to Uncle Sam that they used to, the trickle downers have to get it from somewhere.
And I realize that even though they are making RECORD PROFITS, we simply can’t ask these gigantic multinationals to pay their fair share, so this is where we are.
A decimated middle class of flat-lined wages (for decades on end) whereby working families can’t even afford to pay their (outrageous) insurance premiums or send their kids to college….
Finn McCool (The System isn't Broken; It's Fixed)
November 14th, 2012
2:14 pm
Wal Mart employees are gearing up for a black Friday strike.
This should be fun!
clem
November 14th, 2012
2:17 pm
the prez speaking at news conference shows so much more grasp of things then w ever could. he does not have a teleprompter. if repubs not so full of it on protecting the rich, i feel our country would be further on the road to recovery. go ahead put party first over country and i have no doubt who will prevail. keep listening to slant head and lumpy…
JDW
November 14th, 2012
2:19 pm
@LBB…”f you doubt me, check out Obozo’s 2013 budget, table 1.1″
Bushs last budget…spending of $3.517 trillion
Obama’s first budget…spending of $3,456 trillion
I not only doubt you, I am calling BS.
Georgia , The "New Mississippi"
November 14th, 2012
2:21 pm
Damn Kyle
President Obama has to come up with the plan, find common ground on the details, write the plan, then sign it into law………..Our Congress is useless !!!
GasMan
November 14th, 2012
2:24 pm
The only real way to get out of this hole is to grow our way out which is what happened under Clinton / Republican Congress. Of course much of that revenue was due to an overheated economy due to Internet and then Housing Bubbles which we are still getting over. Since I don’t see another asset bubble appearing to bail us out (temporarily), we need to do the responsible thing. Let all the tax rates revert, adjust Soc Security retirement ages, eliminate a boatload of corporate welfare and personal deductions, tweak Medicare, and cut defense by 10%. See how easy that is? Just piss off everyone!
Lil' Barry Bailout - OBAMAPHONE!!!
November 14th, 2012
2:25 pm
Sorry, JDW, but you’re including Obozo’s “stimulus” spending in Our President Bush’s last budget year.
Nice try, but your lie has been debunked long ago.
JDW
November 14th, 2012
2:28 pm
@Kyle…”That’s not Obama getting everything he wants in exchange for nothing the GOP wants ”
You need to check that exit poll again 47% plus 13% means 60% of the country wants higher taxes on the top earners..it is not just Obama.
bookman parrot
November 14th, 2012
2:28 pm
I just can’t understand why anyone would question the glorious one in office. Must be racism. LOL.
Reebok
November 14th, 2012
2:34 pm
Obama is craving a head-on collision with the GOP because he just won re-election, the Dems picked up more seats in the Senate, and the polls make it clear that the public would blame the Repubs if there’s no deal. And why shouldn’t they? The Republican party and their media allies spent 4 years actively pulling for Obama to fail and voting NO on anything he proposed, even if it was a Republican initiative to begin with. The GOP needs to behave, smile, nod politely, and get out of this with as little damage as possible. Their saving grace is, Obama can’t kick their a$$e$ in another national election.