Contributor Post Created with Sketch. Hey, What Happened to Hillary Clinton’s Middle-Class Tax Cut?

 
Hillary Bernie
Bernie Sanders listens as Hillary Clinton answers a question about college affordability in Durham, New Hampshire, Sept. 28, 2016.

The NYT’s David Leonhardt thinks Democrats risk again becoming the High Tax Party. Recall that during the 2008 presidential campaign Barack Obama contrasted his middle-class tax cut plan to John McCain’s, one Obama contended favored wealthier Americans. Here’s what tax-cut enthusiast Larry Kudlow wrote back then:

Wouldn’t it be the height of irony if Barack Obama wins this election as the Ronald Reagan tax-cutter? His tax plans are severely flawed, and his campaign narrative to support them is all wrong. And yet a recent Rasmussen poll shows that 31 percent of voters believe Obama is the real tax-cutter, while only 11 percent choose McCain. Believe it or not, Obama seems to have swiped the tax-cut issue from the Republican Party. How can this be. Well, for almost two years Obama has talked about cutting taxes for 95 percent of the people. McCain has no such record.”

Or as GOP pollster Neil Newhouse put it, “It’s a stunning reversal of fortune on a core Republican strength.” But now Clinton may be reversing that reversal, writes Leonhardt:

She has proposed raising taxes on the affluent and leaving them virtually unchanged for everyone else. Trump is offering a huge tax cut for the well off. At the debate, he exploited the issue. “You are going to approve one of the biggest tax increases in history,” he said. “And by the way, my tax cut is the biggest since Ronald Reagan.” She then was left to criticize his plan for increasing the deficit – weak tea at a time when most Americans are more worried about their own financial security than the deficit. In part, her problem was rhetorical. She could have pointed out that Trump’s plan would likely increase taxes on the middle class, as a recent analysis by Lily Batchelder of New York University found. But Clinton’s campaign has also made a policy mistake, in my view, by not offering a specific tax cut for the middle class and poor. There’s a good argument for one, given the weak income growth of the last 15 years.

Now Clinton has promised a middle-class tax cut. As the Tax Policy Center noted last March in a report about her tax agenda: “However, the campaign has indicated that it plans to announce other proposals including a tax cut for low and middle income households so the overall effect of Clinton’s proposals on the deficit the distribution of tax burdens, and the economy are yet to be determined.”

This from the Clinton campaign site seems pretty minimalist, and it’s doubtful voters know much about or understand exactly what it means. It’s hardly flashy:

Provide tax relief to working families from the rising costs they face. For too many years, middle-class families have been squeezed by rising costs for everything from child care to health care to affording college. Hillary will offer relief from these rising costs, including tax relief for Americans facing excessive out-of-pocket health care costs and for those caring for an ill or elderly family member.

So what gives? And it wasn’t just Obama who worked to change public perceptions of the Democrats and taxes. Back in 1992, candidate Bill Clinton also proposed a middle-class tax cut. He was not going to be another Walter Mondale promising tax hikes. It was a pretty hot issue in the primaries. From the Washington Post in February of that year:

Former Massachusetts senator Paul E. Tsongas and Arkansas Gov. Bill Clinton, careening toward a wild finish in Tuesday’s Democratic primary here, opened the final weekend of campaigning in a sharp dispute over middle-class tax cuts. Tsongas, campaigning relentlessly as a “pro-business Democrat,” told reporters today that if he were president, he would veto a House Democratic proposal that would give tax credits of up to $400 to most Americans. He said the proposal grew out of polling data, not sound economics. “If that is where the Democratic Party wants to go, either by the {presidential} candidates or the congressional leadership, then leave me out,” he said after visiting a computer software company in Nashua.

Clinton, who appeared to have regained some of his footing after a battering over his draft record, staged a photo opportunity at a Manchester supermarket to emphasize his belief that tax cuts for the middle class would help stimulate the economy and put food on most Americans’ tables. “Paul Tsongas says a middle-class tax cut is pandering,” Clinton said. Pointing to several grocery carts filled with food, he added, “This is not pandering . . .I’m going to rescue the middle class.”

So why isn’t Hillary campaigning hard on her own middle-class tax cut, as Leonhardt suggests? One theory: Clinton long ago assumed she would be the 45th POTUS, and has been running on more of a governing agenda. No need to “pander” so much.

And along those lines, perhaps she sees infrastructure spending as a better use for taxpayer dough than pricey middle-class tax cuts. Perhaps she buys the reasoning of Democratic economist Larry Summers: “In the short run, expanded infrastructure investment would put people to work, create demand, and move the economy forward. In the medium run, it would expand the economy’s capacity, and reduce [debt] burdens on my children.”

Finally, maybe Team Clinton has seen polls showing deep public skepticism about and disinterest in tax cuts. Indeed, while Trump has a big tax cut plan, he doesn’t talk about it nearly as much as the trade and immigration issues. Or even as much about Rosie O’Donnell.

There are 7 comments.

  1. MACHO GRANDE' (aka - Chri… Coolidge

    If she’s done something in the last week or two, it’s only to snag votes from the middle/undecideds. I’m guessing this has more to do with post-debate polling and how her tax zinger (stupid or not) was effective. With the top half of people who actually pay taxes covering 97% of all tax revenues, any significant tax increase, in terms of increasing revenues, has to land smack on the middle class, broadly defined.

    • #1
    • September 29, 2016, at 4:35 PM PST
    • Like
  2. I Walton Member

    She comes at him with the tired old tax cuts for the rich and trickle down economics, and Trump, an economic illiterate and general ignoramus can’t answer her. Can’t someone on his staff give him a few comments he can remember? He’s not quick on his feet because he lacks the understanding necessary to put these dumb sound bites in perspective and he goes negative and personal because that seems to be what he understands. He’s really making this hard. It’s a good thing Hillary and the Democrats make it easy. God I hate this election.

    • #2
    • September 29, 2016, at 4:52 PM PST
    • Like
  3. I Walton Member

    Larry Summers used to be an economist, like Krugman almost was, but any association with these people destroys the soul and the brains follow as collateral damage.

    • #3
    • September 29, 2016, at 5:15 PM PST
    • Like
  4. Profile Photo Member

    What daylight is there between Reform Conservatives and the Clintons on economic issues (especially taxes)? Not much I would say. Here is another sneering post against tax cuts and in favor of “infrastructure projects.”

    American Enterprise Institute = Democratic Leadership Council.

    • #4
    • September 29, 2016, at 5:40 PM PST
    • Like
  5. Fake John/Jane Galt Coolidge

    Maybe she is not bothering to pander because she knows the fix is in and that she is going to win by a landslide.

    • #5
    • September 29, 2016, at 7:25 PM PST
    • Like
  6. tigerlily Member

    James Pethokoukis:

    Hillary Bernie
    Bernie Sanders listens as Hillary Clinton answers a question about college affordability in Durham, New Hampshire, Sept. 28, 2016.

    The NYT’s David Leonhardt thinks Democrats risk again becoming the High Tax Party. Recall that during the 2008 presidential campaign Barack Obama contrasted his middle-class tax cut plan to John McCain’s, one Obama contended favored wealthier Americans. Here’s what tax-cut enthusiast Larry Kudlow wrote back then:

    Wouldn’t it be the height of irony if Barack Obama wins this election as the Ronald Reagan tax-cutter? His tax plans are severely flawed, and his campaign narrative to support them is all wrong. And yet a recent Rasmussen poll shows that 31 percent of voters believe Obama is the real tax-cutter, while only 11 percent choose McCain. Believe it or not, Obama seems to have swiped the tax-cut issue from the Republican Party. How can this be. Well, for almost two years Obama has talked about cutting taxes for 95 percent of the people. McCain has no such record.”

    That 31% that thought of Obama as a tax-cutter seems to me to be the definition of Low Information Voters.
    • #6
    • September 29, 2016, at 8:34 PM PST
    • Like
  7. Randy Webster Member

    James Pethokoukis: So what gives? And it wasn’t just Obama who worked to change public perceptions of the Democrats and taxes. Back in 1992, candidate Bill Clinton also proposed a middle-class tax cut.

    Ha, ha, ha. I remember Bill’s promise of a middle class tax cut. It lasted just as long as it took to get him elected. Then it was “Oops, can’t do it.”

    • #7
    • September 30, 2016, at 2:50 AM PST
    • Like