By Luke Brinker
This Sunday’s New York Times features results from a poll addressing issues related to the social safety net and the size of government. Unsurprisingly, the poll found that 85 percent of respondents supported increasing taxes on the wealthy as part of a deficit-reduction strategy. Much more striking, however, is that a substantial majority of respondents- 70 percent – endorsed increased taxation on everybody, not just the wealthy.
In late 2010, President Barack Obama extended the Bush-era tax cuts for an additional two years as part of a compromise with congressional Republicans. In exchange for increased stimulus (including the much-ballyhooed payroll tax cut), Obama agreed to renege on his 2008 campaign pledged to raise the rate of taxation for households earning above $250,000 annually. Obama has consistently supported maintaining the reduced rates for all other Americans, but the Center on Budget and Policy Priorities calculates that allowing the tax cuts for all income groups to expire would reduce the federal deficit by $3.9 trillion over ten years. As Ezra Klein has written, four-fifths of the total cost of the tax cuts went toward cuts for those earning less than $250,000. The Obama proposal to only extend most of the tax cuts would reduce the deficit more than the GOP proposal to extend all of them, but having everybody return to Clinton-era tax rates would do far more to put a hole in the deficit. Come December 31, 2012 – the date of the Bush tax cuts’ expiration – the best thing Congress and President Obama can do to reduce the deficit is simply to do nothing.
Filed under deficit, taxes
By Luke Brinker
Pundits portrayed Mitt Romney’s “fire people gaffe” as an egregious act of political malpractice, unbecoming of a presidential candidate during a time when so many Americans are out of work. But as I’ve written before, there are more substantive reasons to consider Romney emblematic of the one percent. Still, when two-thirds of Americans see “strong conflicts” between rich and poor, even the slightest hint of tone-deafness could damage Romney as much as, say, his regressive tax policy.
Yesterday brought another remark that raises serious questions about Romney’s skills as an effective political communicator. In an interview on NBC’s Today program, Romney insinuated that critics of his Bain Capital record – and of financial industry practices in general – are motivated by petty “envy,” and that discussions about income inequality should occur behind closed doors. Via Greg Sargent, here’s the transcript:
QUESTIONER: When you said that we already have a leader who divides us with the bitter politics of envy, I’m curious about the word envy.Did you suggest that anyone who questions the policies and practices of Wall Street and financial institutions, anyone who has questions about the distribution of wealth and power in this country, isenvious? Is it about jealousy, or fairness?
ROMNEY: You know, I think it’s about envy. I think it’s about class warfare.When you have a president encouraging the idea of dividing America based on 99 percent versus one percent, and those people who have been most successful will be in the one percent, you have opened up a wave of approach in this country which is entirely inconsistent with the concept of one nation under God. The American people, I believe in the final analysis, will reject it.
QUESTIONER: Are there no fair questions about the distribution of wealth without it being seen as envy, though?
ROMNEY: I think it’s fine to talk about those things in quiet rooms and discussions about tax policy and the like.But the president has made it part of his campaign rally. Everywhere he goes we hear him talking about millionaires and billionaires and executives and Wall Street. It’s a very envy-oriented, attack-oriented approach and I think it will fail.
From a substantive standpoint, Romney’s statement that “it’s fine to talk about [income inequality] in quiet rooms” is especially troubling. Absent a public discussion about the increasing share of wealth accruing to the top one percent and the difficulty of escaping poverty, it’s unclear how any progress can be made toward solving those issues. Politicians respond to the political preferences of those who are most politically active (giving campaign contributions and the like), and those individuals are overwhelmingly the wealthiest Americans. If left to policymakers in “quiet rooms,” these issues would most likely not even be addressed.
No less damning is Romney’s dismissal of concerns about his Bain tenure as nothing but “envy.” This son of an auto executive, governor, and cabinet secretary resembles more and more the overindulged rich kid who shows you all his toys and says, “Bet you wish you had all this.”
By John Stang
Many people I know who like Jon Huntsman find him to be the most reasonable Republican in the race with strong, moderate stances. His 3rd place finish with 17% of the vote in New Hampshire last night will undoubtedly continue this myth. That couldn’t be further from the truth. I wrote a post about Huntsman’s conservative record as Governor of Utah. This morning, Ezra Klein compares Huntsman and Romney’s tax plans:
Huntsman’s tax plan is more radical than Romney’s. It wipes out every deduction and exemption and then uses the savings to cut the tax on capital gains and dividends to zero. That amounts to a massive tax cut for the wealthy — and it comes at the expense of benefits like the Earned Income Tax Credit and the Child Tax Credit, which go to the poorest Americans, and the mortgage-interest tax deduction and the exclusion for employer-based health insurance, which go to many middle-income Americans. Romney’s plan, by contrast, only cuts the rate on capital gains and dividends for those making less than $250,000. The two candidates have mostly the same position on corporate taxation — drop the rate from 35% to 25% — but Huntsman adds a temporary tax holiday for overseas profits.
Similarly, Huntsman’s spending cuts are more radical than Romney’s. Though his entitlement reforms remain vague, he promises they will be “based on the Ryan Plan.” Romney, meanwhile, broke with the Ryan plan to preserve traditional fee-for-service Medicare as an option in his entitlement reforms…
Yes, on a few issues Huntsman does appear to be more moderate than other GOP candidates, he supports civil unions and is not as hawkish on defense. However, the moderate label that Huntsman has received, as has Mitt Romney, masquerades his real positions. It was a narrative that was suitable for the media and acceptable for some liberals. To top it all off, Huntsman presents his ideas in a nice, disarming voice that is less combative than some of the other candidates, giving him the airbrush look of being this GOP moderate. It just takes some investigative work to realize how much, to borrow a phrase, “pious baloney” that really is.