President Obama appeared at the White House on Monday to push for an extension of the Bush tax cuts for one year, except for earners above $250,000—there, the president is “100 percent committed” to letting those tax cuts expire, in the words of senior campaign adviser Robert Gibbs.
Let’s get this out of the way up front: there’s no way Congress reaches a deal on this before the November elections, nor even makes a meaningful effort. Republicans think they could win control of the Senate, so there’s no reason to negotiate now from a weaker position, and Democrats believe the same about their chances to retake the House.
Rather, tax justice is clearly something Obama’s team believes can be a powerful election-year narrative. (A belief no doubt shared by Republicans, for inverted reasons).
But that doesn’t mean the new push isn’t extremely meaningful. The idea is to claim one side of the debate about raising taxes in general, and tax cuts for the wealthy in particular, and then see how the election pans out—and then claim a mandate afterwards. That’s the framing Obama explicitly claimed at the White House today—he said, “In many ways, the fate of the tax cut for the wealthiest Americans will be decided by the outcome of the next election.”
Furthermore, Democrats are trying to (accurately) convey the insanity of the Republican absolutism on taxes—that no taxes should be raised anytime on anyone—to weaken the party’s just-say-no approach going forward. By highlighting a broadly unpopular tax cut for the wealthy, Obama can portray Republicans (again, accurately) as both unreasonable and slavishly dedicated to protecting the rich. Said Obama at the White House:
Nowhere is that stalemate [in Washington] more pronounced than on issue of taxes. Many members of the other party believe that prosperity comes from the top down, so that if we spend trillions on tax cuts for the wealthiest Americans, that that will somehow unleash jobs and economic growth. I disagree. I think they’re wrong. I believe our prosperity has always come from an economy that’s built on a strong and growing middle class.
Obama also noted that “I’m not proposing anything radical here,” which is true. Allowing the Bush tax rates for earners over $250,000 would affect only 1.9 percent of the population (and ironically, most heavily in blue states, not red).
Actually, though the White House isn’t pushing this fact, Republicans and Democrats are simply arguing about is how big of a tax cut to give the top 1 percent. Since Obama is advocating a one-year extension of the Bush rates for income up to $250,000, that means the top 1 percent are still getting a break on their first quarter-million dollars of income, relative to just letting everything expire. It’s just that Republicans want to give them a much bigger break: (via Citizens for Tax Justice):