I must say, as ballast to my applause burst for Obama's press conference defending his tax deal, that there is something false in the way he's framed the choice that faced him - in his statement last night, in his press conference today, and his message to supporters cut for OFA. His claim is that Democrats did not have the votes to break a Republican filibuster against sunsetting the tax cuts for the wealthiest, and that the only alternative to cutting a deal was to let taxes go up for tens of millions of Americans.
That is probably not true. Democrats have felt betrayed because it has seemed clear that if Obama had made it plain to Democrats in Congress that he would not countenance extending all the cuts, and if he had promised publicly to veto any bill that extended the cuts for the top two percent, that he would have prevailed -- and that if a standoff did ensue and all the cuts had sunset, a deal would have been struck about ten minutes into the next Congressional session. His "I had no alternative" plea does not ring true.
The real question, I think, is this. If you told Obama in, say, July or September, that he could have his way with the tax cuts, full stop -- or extend them for two years while extracting from the Republicans 13 months of unemployment benefit extension, a payroll tax cut, extension of his stimulus tax cuts for tuition and the earned income credit, and accelerated equipment investment writeoffs for businesses, which would he have chosen? A clean tax cut victory with basically no further stimulus to the still-sputtering economy, or hundreds of billions in relatively efficient stimulus at the price of $100 billion plus in inefficient stimulus?
I suspect that he did choose. Earlier than the current political narratives would have us think.
Obama thinks ahead so I wouldn't put it past him to come up with an alternative plan just in case the Senate Dems flake on him - again. I don't know, I'm not sympathetic to their calls of betrayal. He gave them the opportunity to vote on it prior to the elections and they didn't. And they were STILL unsure what to do once they returned after the mid-terms. I honestly hope they sign off on the deal because I want the unemployed to get help and I want to see if brown and snowe keep their "promise" to vote for DADT repeal once the tax debate is "settled". Do people forget that part? The DADT policy that they blamed Obama and Dems for failing to pass before the mid-terms even though Democrats supported it?
ReplyDeleteYou talk like you think raising taxes brings in more money. It doesn’t. It just slows the economy down, and you end up collecting less money anyway. The people who pay those taxes get a vote. They can refrain from investing, defer income, take their vacation instead of working, and a host of other micro and macro decisions that will lessen their tax burden.
ReplyDeleteI saw a chart recently that showed that actual tax receipts as a percentage of GDP has remained basically constant at around 19% for the last 50 years or so.
So, if you want to collect more taxes, you should try to do something to increase GDP - like maybe cut taxes even further.