Obama not looking to make a deal on taxes
On Monday, the Washington Post reported that negotiations had begun in Congress to deal with what has become known as “Taxmageddon,” when the 2001 and 2003 tax cuts expire. Even though it seems that the larger focus is tax reform, Conn Carroll notes that no one should bank on President Barack Obama going along with extending current tax rates, even temporarily:
If American voters reelect President Obama, they have no right to complain when their taxes go up by $494 billion on January 1st. That is the total amount taxes are set to increase, automatically if Congress does not pass, and Obama does not sign, tax relief before December 31st of this year.
In the current edition of The New Yorker, Ryan Lizza reports that unlike 2010 and 2011, Obama is prepared to follow through on his threat to let taxes go up after he no longer has to face voters ever again: “Several White House officials I talked to made it clear that if a deal, or at least the framework of a deal, is not reached before December 31st Obama would allow all the Bush tax cuts to expire – a tactic that would achieve huge deficit reduction, but in a particularly painful and ill-conceived fashion.”
Separately, firedoglake‘s David Dayen reports that Senate Democrats are also preparing to allow Taxmageddon to occur on schedule. ”You can’t give up your leverage in advance,” Sen. Jeff Merkley, D-Ore., said. Sen. Sherrod Brown, D-Ohio, added that the caucus “needs to do what we need to do. I’m not so willing to compromise this time.”
In 2010, President Obama advocated extending the tax cuts because the economy was struggling after the recent recession. During a press conference on the agreement, Obama said, “I’m not willing to let working families become collateral damage…The American people didn’t send us here to fight symbolic battles or win symbolic victories.”
We’re coming up on Taxmageddon, unemployment is still high and job creation is sluggish, and GDP growth is tepid; it’s hard to see what has changed. Moreover, the Congressional Budget Office recently warned that failing to extend the tax cuts would put the economy back into a recession.
So what is Obama doing? He’s doing exactly what he said Americans didn’t put him in the White House to do; he’s fighting a “symbolic battle” and looking for a “symbolic victory.” For the last year or more, Obama has waged class warfare, making political enemies out of the rich for political purposes. Despite the fact that the so-called “Buffett Rule” — a 30% tax on incomes over $1 million — wouldn’t have worked and raised very little revenue, Obama still pushed it vigorously out of his view of “fairness”; nevermind that the top 400 income earners pay nearly as much in income taxes than the bottom 50% of all taxpayers.
Obama is willfully going to hurt our economy to make an symbolic point. This may sit well with the populist and Occupy Wall Street crowd, but as we approach January and the economy continues its poor performance, Obama may find that he, once again, has no choice.