Sunday, April 10, 2011

Is Obama his own Grover Norquist?

As David Brooks noted in the midst of the 2008 campaign, Obama has put himself in a box on taxes. Here's David Plouffe on Meet the Press today:
DAVID GREGORY:
--bring up taxes, though. Is-- in the President's plan as he envisions tackling the deficit, do taxes have to go up? Does that have to be part of this equation across the board?

DAVID PLOUFFE:
Well, this is part of his budget for next year. He has said he believes-- taxes on the higher income, people over $250,000-- should eventually go up.


DAVID GREGORY:
Can you--

DAVID PLOUFFE:
So if--

DAVID GREGORY:
--tackle the deficit without raising cla-- taxes on even the middle class?

DAVID PLOUFFE:
I think the President's goal, and he's been clear about this, is to protect the middle class as we move forward here. So people like him, as he'll say, who've been very fortunate in life, have the ability to pay a little bit more. Now under the Republican Congressional plan, people over 250,000 get over a trillion dollars in tax relief. So this is the important thing. You're making a choice. You're asking seniors and the middle class to pay more. You wouldn't be having to do that if you weren't giving the very, very wealthiest in this country just enormous tax relief.

(OVERTALK)

DAVID GREGORY:
So no-- still no new taxes on the middle class? That's a reelection pledge?

DAVID PLOUFFE:
Well, the President's been very clear-- [from here, Plouffe isn't; he digresses into a rundown of middle class tax breaks Obama has delivered.]

Most progressives acknowledge that the country's fiscal challenges can't be solved simply by taxing the wealthy more. The U.S. tax code is actually more progressive than that of most European countries.  As I think it was Ezra Klein who noted, countries with broad-based tax burdens -- usually a VAT -- tend to have more extensive safety nets: if everyone is to benefit, everyone pays.  Obama, if he insists on raising taxes only for the rich, will effectively commit to a higher mix of spending cuts in any comprehensive tax/budget reform deal.

The Bowles-Simpson plan, like all long-range budgetary plans except those on the right wing extreme, looks to raise revenue by reducing "tax expenditures" -- targeted tax breaks -- even while lowering marginal rates. As I've noted before, reducing those breaks opens an ideological window for some conservatives, since eliminating tax breaks that benefit particular groups can be framed as  "spending cuts" rather than "tax hikes."  Grover Norquist has been doing his utmost to slam that window shut by loudly insisting that Republicans promise to offset any and every reduction in "tax expenditures" by an equal tax cut.  GOP Senators Chambliss, Coburn and Crapo, half of the Senate Gang of Six self-commissioned to write tax/budget reform legislation, have offered at least some faint twitches to shake off this straitjacket.

Is Obama his own private Norquist?  Will he insist that tax code reform based on reducing tax expenditures not raise taxes overall on "the middle class," defined as 98% of the population?

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