If there’s one truth Republicans hold to be self-evident, it’s that asking the rich to pay their faie share in taxes is wrong. The arguments against it change. Sometimes it’s divisive “class warfare.” Other times “penalizing success,” or “punishing job creators” and thus “damaging to the economy.” There’s no objective evidence that slightly higher marginal tax rates for millionaires slows economic growth. The economy grew a lot more during President Clinton’s tenure than after the Bush tax cuts. And it’s awfully hard to imagine a business owner—and business owners are not the majority of rich individuals anyway—deciding not to expand his company because he’ll have to pay 4 percent more on the profits over $250,000 per year. But to Republicans the wrongness of taxing the rich doesn’t require objective evidence or logic because it is an article of our democratic faith, right up there with “all men are created equal.”
So naturally, when President Obama announced his plan Monday morning to reduce the deficit in part by taxing people earning more than $1 million per year as much as their employees, Republican presidential candidates reacted with a horror normally reserved for heretical suggestions like regulating greenhouse gas emissions or protecting the civil rights of gays and lesbians.
“President Obama’s plan to raise taxes will have a crushing impact on economic growth,” claimed Mitt Romney. “Higher taxes mean fewer jobs – it’s that simple.” As history shows it is not, in fact, that simple. It’s also worth noting that Obama proposes a much lower total tax increase than if current law were kept in place and the Bush tax cuts allowed to expire on schedule.
“Mr. President—you don’t create jobs by increasing taxes on job creators,” averred Michele Bachmann. “The President’s gimmicks and tax increases on the backs of small business and the middle class won’t grow our economy. Only permanent fixes will. The President should allow for repatriation of American money overseas, truly reform the entire tax code so it [is] fairer and flatter on all Americans, and get rid of job killing regulations, including on the energy sector, which will create millions of jobs.” Bachmann apparently thinks that milionaires are “middle class” and that a “fairer” tax code is synonymous with a flatter one. By any objective definition, Obama proposes to tax the rich, not the middle class, and a fair tax code asks for more from those to whom society has given the most and who can best afford it. But Bachmann’s response is not grounded in any objective definitions or metrics, it is pure ideology.
Front-runner Rick Perry’s response was perhaps the strangest. “President Obama’s plan is a bait and switch that offers more than a trillion dollars in higher taxes for a promise of temporary tax relief,” Perry complained. Clearly, Perry, or his advisers, do not understand the proper meaning of the term “bait and switch.” Obama isn’t offering temporary tax breaks in the American Jobs Act in order to snooker Americans into thinking their tax burden will never rise. He is being quite forthright on the subject. The reason he is combining temporary tax cuts with permanent tax hikes is because we need to stimulate economic activity now, and solve the deficit over the long term.
Perry goes on to complain that Obama “discourages charitable giving,” as government ought to be in the business of encouraging voluntary behaviors. What conservative principle is Perry basing that on?
Perry concludes by complaining that “the Obama plan fails to provide the certainty employers need to create jobs.” Certainty has become a buzzword for Republicans opposed to closing tax loopholes for their deep-pocketed contributors, or even letting things that are scheduled to occur, like the Bush tax cuts expiration, happen on schedule. But it’s an awfully strange obsession for a party that wants to repeal existing laws just going into effect like the Dodd-Frank financial regulation and the Affordable Care Act.
Even Jon Huntsman, the supposed token moderate in the GOP field, issued a nonsensical statement rejecting any tax increases: “President Obama continues to demonstrate that he has no new ideas on how to create American jobs,” complained Huntsman. “For two and a half years he’s been peddling a version of the Buffett Tax Hike as a key pillar of his failed attempt to tax and spend and regulate this country to prosperity.” Obama, of course, does not propose the “Bueffett tax” to spur economic growth, he proposes temporary spending measures and tax cuts for that purpose. The tax proposal is intended to reduce our deficit. That, in turn, may in fact help long term economic growth by holding interests rates low. That’s what happened in the 1990s. But Huntsman’s complaint is a non sequitur.
It would have been encouraging, even a sign of presidential leadership, if Republican candidates reacted to Obama’s jobs and deficit reduction proposals with reasonable and fact-based responses. They don’t need to embrace all its particulars to appreciate that Obama, unlike they, has served the public interest by at least laying out a plausible plan for confronting our dual economic challenges and use it as a starting point for a productive conservations. But they didn’t.