More bad fiscal cliff news for Republicans, from the Politico/GWU Battleground Poll today:
A new POLITICO/George Washington University Battleground Poll finds that 60 percent of respondents support raising taxes on households that earn more than $250,000 a year and 64 percent want to raise taxes on large corporations.
Even 39 percent of Republicans support raising taxes on households making more than $250,000. Independents favor such a move by 21 percentage points, 59 to 38 percent.
Only 38 percent buy the GOP argument that raising taxes on households earning over $250,000 per year will have a negative impact on the economy. Fifty-eight percent do not.
As much as I’ve held out hope that the Wall Street Journal and others are right that sticking to principles is the correct move, what do you do if the public disagrees? Maybe the GOP needs to come to terms with that. This doesn’t mean conservatives are wrong on the tax issue, it just means there may not be a way to win this political battle at the moment.
At the Weekly Standard, Bill Kristol makes a very persuasive case for that:
The Journal editors believe that after January 1, when taxes will have gone up for everyone, House Republicans will block Democratic legislation that would cut taxes—that would restore the lower 2012 rates for the vast majority of taxpayers, fix the Alternative Minimum Tax, and for that matter would probably offer a compromise on dividends and the death tax better than what will be the new dividend rate of 39 percent and death tax of 55 percent with a $1 million exemption.
Will Republicans really oppose such legislation? President Obama will be beating the drums for this tax cut. Senate Democrats will pass this tax cut. If Senate Republicans vote against it, it won’t be “Senate Democrats running for re-election in 2014” who will have a tax hike on their resumes. It will be Senate Republicans who will have voted against cutting taxes. And if House Republicans block such legislation, it will be they, and they alone, insisting on higher taxes.
Of course they won’t. Republicans will fold with lightning speed after we go over the tax cliff on January 1. Which is why the third of the Journal editorial’s three key paragraphs is moot. If we go over the cliff, there won’t be damage to Obama’s chances of second-term success. Quite the contrary. What Republicans will have done is to make Democrats the party of tax cuts and Obama a president fighting for economic growth.
As I say, it won’t happen. Most Republicans will go along soon after January 1 with what will now be the Democrats’ tax cutting agenda. If the House Republicans now follow the Wall Street Journal editors over the cliff, the only effect, I’m afraid, will be to turn a manageable tactical retreat in December into a panicked strategic rout in January.
The WSJ board is right that GOP infighting isn’t helpful for negotiations. But two facts remain: 1.) Americans largely agree with Obama on tax hikes; and 2.) Republicans will be blamed if the country goes over the cliff.
Because of that, Obama shows no sign of backing down, nor does he need to. Even if Republicans stop fighting amongst themselves, Obama is not stupid. He knows the impossible position they’re in — heads he wins, tails they lose. The question is, which loss is the least damaging for the GOP? As the Israelis say, “don’t be right, be smart.” Republicans might want to keep that one in mind.
1. Amazing that even 39% of Republicans favor raising taxes. No wonder we lost. Occupy Wall Street has been a smashing success–its rhetoric, tropes and attitude has leached into the public mind. n n2. The Bush Tax Cuts were idiotic to sunset after 10 years. ObamaCare doesn't sunset after 10 years. A tax cut that expires is not a real tax cut. We have, in effect, been living with the Clinton Tax rates for the past decade, with just a temporary "tax holiday".
I simply do not agree with either Alana or Kristol. The Republican Party will destroy itself as the party of low taxes, limited government and economic growth if they give in to Obama and follow Kristol's advice. He is trying to destroy the Republican Party and will succeed if the Republicans relent on the principle of no new taxes and become really nothing more than the tax collector for the welfare state. And, when Obama does offer his tax cut in 2013 (which it really is not since it will really be no more that a return to previous tax rates for those making less than $250,000), the Republicans should offer a counter proposal cutting taxes on all Americans (at least the 50% that actually pay taxes) and offer that as a basis for encouraging and stimulating economic growth and creating jobs. n nAnd, by the way I will not renew my subscription to The Weekly Standard — you can bet on that!
It might not be a bad thing for Obama to win and impose massive tax increases on the rich. n n1: The rich could have tried harder to defeat him — and this will motivate them for 2014. n n2: The GOP failed to hold together the Reagan Coalition of Beliefs and instead has become a party where if you have money, you (and your idiot children) are welcome, but if you are of moderate means, you aren't. The GOP has done this to itself. n n3: Much as an abused woman has to make her own decision that she doesn't want to be in an abusive relationship anymore, and you have to stand back and let her get hurt to see it, perhaps when people see how "the rich" paying more affects them personally — when we have the second dip of this second great depression — they will understand in a way they don't now. n nI think Obama is going to win a very Phirric victory here.
I think it's going to come down to the states and grassroots Republican activism. Note that places like Wisconsin and New Jersey are thriving thanks to Republican leadership. Eventually these successes will gel into a national recognition of the effectiveness of right-to-work, fiscal conservatism and reining in of public unions. n nNote also that Christie and Walker don't dwell on abortion and other religion-linked issues. They just focus on running their states better, and that's what the national party needs to think more about. n nIf the Republicans get out of people's bedrooms and focus strictly on the fundamental issues of the economy and national defense, they will fare better. n nI do agree that the GOP should give Obama and the Democrats enough rope to hang themselves with this tax thing. Let the Democrats be the party of tax hikes on people's employers, let people start to feel the pain, and let the economy sink back into recession. Works for me. And if the voters don't wake up in 2014 and 2016 and institute some true fiscal discipline, then they deserve what's going to happen.
First and foremost, tax reform and then progressive taxation up to ! in a way similar to some countries in the EU. The rich will still be abjectly rich and the poor perhaps a little less poor. nMore jobs by the millions are also needed. Significant entitlement reforms as well. nThere are plenty of rich democrats. They will be very happy to pay a lot more. I would not mind personally. nShrink the gvt and add a lot of wisdom to the congress. They are highly deficient in that quality. Term limit (max: 2), exclusion from lobbying for 5 years. At the end no more benefits like anyone who changes or loses a job. They should not be allowed to control their salary and benefits. That is the base for corruption. No loophole on inside trading. The list is very long …
Looks like the Occupy Wall Street vandals, drug addicts, rapists and defecators may have influenced public opinion after all! But then it's not the first time in history that despots have managed to persuade the masses who respond to their emotions rather than their intellect, a trait not lost on tyrants seeking public support for an agenda which is self-serving and inimical to the welfare of the state.
I continue to be astonished to read that President Obama thinks that ANY married couple whose combined taxable income exceeds $250k is “rich.” That couple is obviously richer than any married couple who lives in the same state (or in the same part of a very large state such as California) and earns less than $250k. But the following two points apparently are less obvious:
1) A married couple earning, say, $350k is LESS RICH than an UNmarried couple — even if they are in love, in a permanent relationship, and may have children — if each unmarried partner is earning approximately $175k of taxable income. Each family is earning $350k, but each member of the unmarried couple gets to file an individual tax return. A comparison of federal income tax rate tables for married and for single taxpayers shows that the total income tax levied on the married couple is substantially higher than the total income tax levied on the unmarried couple. [Admittedly, the married couple can file separate tax returns, but for most brackets the rates are higher (never lower) than for unmarried couples.] I know of unmarried couples, in permanent relationships and even with children, who didn’t get married because of the tax consequences.
If Obama wanted to avoid penalizing marriage, then if his “rich” boundary is $200k for individuals it should be $400k for married couples. Alternatively, if he insists that any married couple earning more than $250k is “rich,” then his “rich” boundary should be $125k for individuals.
And the tax rate tables, and the instructions for deductions etc., for married couples filing separately should be identical to the tax rate tables and instructions for single individuals.
2) Geography matters. For example, either a couple or an individual who earns federal taxable income of $X (the amount doesn’t matter here), and lives in the San Francisco Area (including the Silicon Valley region), is financially “poorer” than anyone earning the same federal taxable income of $X but lives in Southern California’s “Inland Empire” — San Bernardino (now bankrupt), Ontario, Riverside, et. al.) The SF Area resident is financially “poorer” because their housing costs — either ownership or rental — are substantially higher than they would be in the “Inland Empire.”
And either a San Francisco Area resident or an Inland Empire resident earning federal taxable income of $X is financially “poorer” than a resident of the midwest earning the same federal taxable income of $X, again because of much lower housing costs (and also lower state and local taxes) in the midwest.
R.N. Folsom
P.S. It’s depressing to know that the President of the U.S., when using the term “millionaires,” doesn’t understand that $1,000,000 is a long way from $250,000. Even if he doesn’t understand numbers, at least he should be able to count — and understand the consequences of — the number of numbers in a number.