One of the arguments some intelligent conservatives are making is that if Republicans agree to increase rates on the top earners in America, it will do irreparable damage to the GOP. The basic case goes like this:
If Obama succeeds and ends up getting a confession from Republicans that tax cuts are the problem, tax cuts are the cause, what happens to the next Republican who campaigns on tax cuts? Not going to have a prayer.
Now it may well be that raising tax rates will do significant damage to the Republican Party. It may be substantively unwise. And I’m certainly sympathetic to Republicans not wanting to play a role in something they think is bad policy.
But here’s where I think this analysis is wrong.
If Republicans agreed to raise the rates on the top income earners in America, it would not be a “confession” that tax cuts are the problem. It would be a concession–one done in order to (a) keep something worse from happening (e.g., higher taxes on everyone, not just the top 2 percent of income earners; and/or the economic damage caused by going over the fiscal cliff) or (b) extracting something better in return (for example, entitlement reforms).
Whether the concession is worthwhile depends on the details of a deal. But conservatives should bear in mind that even a politician as principled as Ronald Reagan agreed to tax increases as part of broader deals. Indeed, Reagan agreed to what at the time was the largest tax increase in American history (the TEFRA tax).
It’s true that Reagan came to regret that decision. But the reason is that he never got the spending cuts he asked for in exchange for the tax increase he reluctantly agreed to. If he had, Reagan would have defended his decision on the grounds that the tax increases, which as a general matter he strongly opposed, were worth what he was able to get in return (spending cuts). And even though Reagan had agreed to tax increases in 1982, he and his party were still able to champion tax cuts in 1984.
My guess is at the end of the day, Speaker Boehner will (wisely) not agree to raise the top rates, given how obstinate and unreasonable President Obama has shown himself to be. But even if Boehner does agree to an increase in the top rates, it will be a concession, not a confession.
Ronald Reagan agreed to tax increases and in the process didn’t ruin the GOP brand, and neither would John Boehner.
Exactly. And if this concession had been made two years ago, conditioned upon simultaneously enacted real cuts in spending, the Dem propaganda machine, AKA mainstream media, would have been neutralized on the argument that Republicans are the party of the rich. We still would have had to defend ourselves more effectively on the phony "war on women" propaganda, but our chances of now being headed for the White House would have been greatly increased. If Boehner does this now, we have a much better chance of increasing our strength in 2014 and 2016.
Yes, the Republicans lost the election early in the primary season when not one of their hopefuls could being himself to supporting tax increases accompanied by spending cuts ten (10) times that size. n nThat was when they became the party of the lunatics and fanatics.
Apparently the party of "lunatics and fanatics" is now agreeing to tax increases with far less spending cuts. n nAs we know, what candidates say in a campaign is far different than what they do in office ("The first thing I'll do if elected is to have face-to-face talks, without conditions, with Iran" and "We will not take a dime from lobbyists". Sound familiar?). n nAnd, sorry, I don't think Obama defeated Romney because of this stance.
If not successfully portraying Republicans as the "party of the rich" with Romney as its fat cat spokesman, then why do you think Obama won?
I don't think he won because Romney was opposed to a tax rate increase on the wealthy. That was the thesis by the commentator above. n nI do agree that part of Obama's victory emanted from his successful portrayal of Romney as an "out of touch plutocrat." Of course, he was assisted by some of the strange comments by Romney too. And one of the worst campaigns in modern history. Along with an incompetent get out to vote operation. I'll stop at three. n nThe public – a majority of it – clearly was looking for an alternative to Obama. Romney was incapable of satisfying that element that he could do a better job. The "devil we know" sort of thing.
It was a trick question. They might not have been smart enough to answer it correctly (correct answer: Of course I would agree to that, because if you really honestly did that, there would be absolutely no need for tax increases (because spending would be so low) and hence we could promptly reverse the tax increases). But not being smart enough to think of that answer on their feet is not the same as being lunatics.
The issue is SPENDING, … and getting the opposition to even acknowledge the fact that the issue is SPENDING. n nWe all should have learned by now that as soon as a Republican gives an inch on taxes the “discussion,” which is not a discussion because it is not about spending whatsoever, is over. Until the Democrats admit that they are ruining the country with their spending the Republicans should NOT give an inch concerning taxes, or even talk about taxes.
The main stream media would still describe Republicans as the party of the rich, which is all that counts for people who don't pay much attention to politics. nAnd many people who support Republicans know that raising tax rates "on the rich" usually reduce tax collections from the "rich" and hurt small businesses which are the main sources of new employment. It will be another blow to recovery. nAnd these people will be angry at the Republican leadership for betraying them as they were at Bush Senior when he gave up on his "no new taxes" pledge under similar pressure. This could well lead to a "Ross Perot" type third party, which would be a disaster. nBetter to point out that the very rich in the one percent will pay less taxes when rates are raised on them. Point to Senator Kerry, most of whose money, we read, is in tax exempt bonds. The value of such bonds increases when tax rates on other income go up, and they are untaxed. So he, and many other very rich, win when rates go up on the "1%" ! And every truly very rich person has advisers who make sure that they similarly do not suffer when such rates increase. The ones who have to pay are small business owners, lottery winners, sports figures, and middle class in general. History shows that tax collections from the very rich ALWAYS decrease when rates on them go up. nWhy not get the message out that such increases cannot be expected to increase tax collections and will hurt job creation? nIncessantly repeating that message is far more useful than accepting a policy that will hurt our economy. n
Exactly wrong. Republicans want to raise income taxes and cut entitlements to pay for the sequester (i.e. defense spending). The net effect of Bohner's proposal for FY 2013, including rolling over the unemployment benefits stimulus, payroll tax holiday, alternative tax fix, sandy aid and doc fix scam is an increase in income taxes of 70b, spending of 120b, and 270b additional debt in just one year, over and above our regularly scheduled trillion dlr gap. What a catastrophe! Obama thinks Republicans will own all of this and he is correct. Rand Paul is right — let the stimulus expire, roll all the spending issues into the debt ceiling discussion and make sure the income tax hike goes to reducing the debt, not paying for new spending and stimulus.
This is the reason that Speaker Boehner needs to have a challenge.
The way to get more tax revenue from the rich and to cut tax rates is to return to the principles of Reagan's 1986 tax law — tax all personal income at the same rate. Simpson-Bowles does this, and the Republicans have committed political suicide by not adopting it.
This is basically the argument I heard Rush Limbaugh advance on his show the other day, and at first, my reaction was yours. But the more I thought about it, the more I realized how right it was. Basically, Obama, the Democrats in Congress, and the media, which takes their arguments and applify them uncritically, say that the Bush tax cuts caused the financial crash of 2008. Now, the evidence for that is debatable at best, but better economic analysis would show that financial collapses like the one we just had and tax rates are not related one way or the other. Democrats enjoy stating that tax rates do not cause economic growth. But, by they same logic, they don't cause depressions. But Obama, as a politician, says whatever he likes for political gain and perhaps a lot of people believe it anyway. But, again, a lot people want someone else to pay for something, in much the same way I, as a non-smoker, want smokers to pay more in tobacco taxes, because I pray to God that my taxes don't go further in heavily taxed Connecticut.
So a lot of people see Obama on the TV saying, "I just want rich people to pay a tiny bit more in taxes," and say, well I am not rich, so it doesn't mean my taxes are going up! But, the problem is that, while we may have the time and interest to read the news day in and day out and follow the intrigues of Washington, most people don't, and will likely believe the canard tha the Bush tax rates directly caused the '08 recession. And that is Limbaugh's fear, and it is something Obama or Paul Krugman will not worry about rectifying.