The Taxman Cometh

Well, this was predictable. From President Obama’s first post-election statement on the fiscal cliff, earlier this hour at the White House:

Echoing language he used on the campaign trail, Obama said the nation should reduce the $16 trillion-plus federal debt in a “balanced and responsible way,” including higher taxes on the rich as well as spending cuts to middle class programs.

“I’m open to compromise,” Obama said, but he added he will not supported a plan that is not “balanced” with more revenues from the nation’s wealthiest citizens. “This was a central question during the election,” said Obama, who defeated Republican Mitt Romney on Tuesday. “It was debated over and over again.”

The election showed that “a majority of Americans agree with my approach,” Obama said.

We used to sneer when Obama automatically conflated support for him with support for each of his policies. In this case, alas, he may be right. From the Washington Post’s report earlier this week on Election Day exit polls:

Nearly half, 47 percent of voters surveyed, said go ahead and raise taxes on incomes of $250,000 and up, as Obama proposes. Only 35 percent wanted no tax increases for anyone. A lonely 13 percent called for higher taxes all around.

That’s a solid 60 percent who want at least some people’s taxes increased. We not only lost the vote. We’re also losing the argument.

  1. Dave_L

    Interesting that 47% said to go ahead and raise taxes [on the rich]…

  2. Crow
    Troy Senik, Ed.: That’s a solid 60 percent who want at least some people’s taxes increased. We not only lost the vote. We’re also losing the argument.

    I think you are right, and I think this is troubling.

    It may even be what ultimately accounts for the dearth of rural whites in many places (swing states especially) coming to the polls: the sense that the deck is stacked against them, and both Obama and Romney and their “rich buddies” will come out okay, while the little guy will get squeezed.

    Many of those who did show up blindly said: hell with it, raise their taxes. 

  3. Southern Pessimist

    Before you pull that pin let me buy a little more gold first.

  4. 2klbofun

    Double down on the Democrat propositions — make them own them.  They want 40% taxes on “the rich”.  Introduce a bill in the House for an 80% tax rate, 90% over $1 million.  If 40% is good, then 80% is twice as good, right?  The Dems then have two options: 1) Say “great idea” and go along.  Of course we know how this will work out — anybody in the high brackets will re-configure their income so as to not pay the high rates.  Or 2) They will have to argue that 80% is too high a rate and that it is either “not fair” or “too high”.  Which brings into discussion what the optimum rate on the Laffer curve actually is.

    Do the same thing for other Dem propositions.  They want 50 mpg CAFE standard — propose 75 mpg.  Make them put up the arguments about the technical and scientific feasibility.  

  5. Frozen Chosen

    Obama needs cash and he needs it now – he knows that raising the top rate on people over $250k only brings in $40 Billion, which is why he will do everything he can to make sure the Bush tax rates expire for everyone!

    Then you’re talking some real money ($800+ billion) and if allows sequestration to go through then he gets another $500 billion.  Think of the socialist paradise he could create with all that revenue!  Think of how many people he could put on food stamps!

    He will make sure that any compromise is unpalatable to the House so he can get his new revenue and blame it on the GOP.  Diabolical perfection!

  6. Stuart Creque

    You all DO realize, don’t you, that people are much more likely to blame the people who didn’t save them from their own mistakes than to accept blame for making those mistakes?

    If Republicans simply acquiesce to Obama’s tax increases, the people won’t see that Obama and the Democrats own those increases and the consequences: they’ll scream at the Republicans, “Why didn’t you save us from these job-killing tax increases (which by the way have also cut into our personal family budgets)?”

    Republicans have to be seen to fight as hard and as well as they can for the principle of spending cuts over tax increases.  There will in fact be a compromise because Republicans and Democrats both have to vote for any deal.

    The compromise, by the way, may happen after the country goes over the fiscal cliff — given the tendency of Obama to overplay his hand.  The fiscal cliff is not just leverage for Democrats, because even though it would kill tax cuts for high earners, the leverage after Jan. 1 will be on the side of the people with the power to restore middle-class tax cuts and essential spending.

  7. Stuart Creque
    Frozen Chosen: He will make sure that any compromise is unpalatable to the House so he can get his new revenue and blame it on the GOP.  Diabolical perfection!

    He may very well want to do this.  I think the Democrats in Congress understand that this will end their careers and possibly cast their party into the wilderness for a decade or two.

    This is why the fiscal cliff provides leverage for both Republicans and Democrats.  If the Democrats won’t produce a compromise before Jan. 1 that the Republicans can accept, the key will be for Republicans to make it crystal clear that they did their very best to save the taxpayers from the fate the Democrats are consigning them to.

    If the country goes over the fiscal cliff, the leverage goes far more onto the side of the Republicans.  No middle-class tax cuts or restoration of essential spending will be possible unless the House Republicans are granted satisfactory compromises by the Democrats.

  8. Punumba!
    That’s a solid 60 percent who want at least some people’s taxes increased. We not only lost the vote. We’re also losing the argument. · · 13 hours ago

    We are losing the argument, and I’m afraid we can’t win the argument.  The other side fights in bumper sticker cliches and it takes our side an essay to deconstruct their bumper sticker, in the mean time, our audience’s eyes gloss over, if we have an audience as the media doesn’t cover what we have to say anyway…  I don’t see a way to win this fight…

  9. Miffed White Male

    The one thing we absolutely must NOT agree to is to let the Bush-era rates expire on “the rich” while keeping them for everyone else.  Either rates go up for everyone (full expiration on schedule), or we raise rates severely [70-90% marginal rate] on the high income  [million-plus in come].

    If rates go up only on “the rich”, we have to outbid Obama.  It’s the only way to avoid total defeat on the tax argument.

  10. Scott R

    Well, my congressman ran on opposing everything Obama advocates in those comments, and that congressman, Jim Ranacci, won by a higher margin than Obama. So who’s got the mandate? Who won the argument?

    Still, I’d say let the Bush tax cuts expire. We could plausibly deny having raised taxes, since they would have been raised by inaction during an impasse.

    And it’ll all be a learning experience for America: Vote for the welfare state, and with that will come tax collection for the welfare state and a hit to the economy. Enjoy. 

  11. Chris Campion

    I’m still scratching my head as to why we should entertain him estimating at all. We need to show how little revenue a tax increase actually nets, versus the deficit. We need to show what Whittle showed in his Eat The Rich piece. That’s an easy pitch, but not one any republican is making, anywhere. We have to pop the idea balloon that it’s a revenue problem.  Worse, we’re already conceding tax increases on Nov. 9th. And we wonder why we lose.

    (edited for typos from a hot little seat in a theatre just before a “Skyfall” showing.

  12. Whiskey Sam

    People used to take up arms to defend their hard-earned property.  Now they duck their heads and acquiesce to pay a little more when they’re already paying many times more than most.  This is a pointless debate.  Taxes are going up.  As long as people refuse to stand up for themselves against federal abuses, it’s not going to stop.  

  13. Cuban Mike

    To quote Mr. Frederic Bastiat:

    “Government is the great fiction through which everybody endeavors to live at the expense of everybody else.” 

  14. Chris Westergaard

    Part of me wants to let the Democrats raise taxes with an agreement to cut spending (actual cuts in the same Fiscal years as the tax increases, not lowering the growth rates of programs in the future and calling those cuts) and see the economy stagnate even more. Then they’ll own our progression towards a Greek / Spanish economy and we can only hope that the electorate wizens up before 2016 or else we’ve sealed our fate into the group of second class nations. Hopefully the budget negotiations will garner some significant cuts to the government fat, if not, our national bankruptcy will occur sooner rather than later.

  15. ctruppi

    At this point (and I may catch a lot of flack here for this) I say do it.  I’m in that tax bracket and I am willing to pay a little more to move that last obstacle out of the way and finally make Obama own this economy.  What’s he going to say in 2 years when we still have huge deficits, and ever-increasing debt and a still-stagnant economy.  When it’s finally proven to everyone that the revenues from the “rich” turned out to be a pittance that amounted to a pimple on the butt of an elephant, what will he say then?  He’s doing the same thing he did the past 4 years.  He’s betting that the economy will get better on its own due to the natural business cycle and trying to score big, lasting, populist political points on the way.

    I’m willing to bet that he’s wrong. 

  16. Frozen Chosen

    So what do those of us in the $250k+ bracket do?  I have always been 100% honest with my tax returns and strongly believe that cheating on taxes is morally wrong.

    At what point should we refuse to allow the government and our fellow citizens to bleed us dry?  Based on what our Marxist governor here in MN has said he will do I am looking at a combined state and federal tax increase of about 8-10%.

    Do I just keep paying while the government keeps jacking up the rates?  Ideas anyone?

  17. Cuban Mike
    Frozen Chosen: So what do those of us in the $250k+ bracket do?  I have always been 100% honest with my tax returns and strongly believe that cheating on taxes is morally wrong.

    At what point should we refuse to allow the government and our fellow citizens to bleed us dry?  Based on what our Marxist governor here in MN has said he will do I am looking at a combined state and federal tax increase of about 8-10%.

    Do I just keep paying while the government keeps jacking up the rates?  Ideas anyone? · 0 minutes ago

    Who is John Galt?

    Honestly, theft is immoral, why should you be honest while being robbed?

  18. Trace

    I don’t think the House has any leverage at all. They can allow the Bush tax rates to expire, but then they will be tagged with raising taxes in a vain attempt to protect their rich friends, lose the House in the midterms and then help sweep Hillary to the White House with her Sandra Fluke/Lena Dunham block intact. 

    Better to do what’s wrong and give the president what he wants and dare him to make it work. 

  19. Miffed White Male
    Over the last several years I have heard from more than a few committed well-off Democrats.  They all consider Reagan the Devil.  So, why only go back as far as Clinton?  Over 500k income? Back to the pre-Reagan tax rates – 70% marginal. I’d couple this with somewhat higher rates on all middle and lower-income groups as well. Yeah, we’ll hurt some well-off conservatives.  But we’ll make a significant cut in the deficit short-term and completely destroy the ability of the Democrats to demagogue the “tax the rich” issue. And if we get an even bigger Capital strike (as I would expect), who are the Democrats going to blame?  The Republicans for raising taxes on the rich too high? 

    I wish there was a way to target tax rates based on who you voted for.  But until then, let’s give the people what they voted for.

  20. kesbar

    Apparently, things have to get much worse before they get better.  Put up a bill to renew the tax cuts as a CYA measure.  The Dems will ignore it or put up their own bill.  Let the cuts expire on everyone. 

    Hold on for the bumpy ride.