Democrats Continue to Play Games with Taxes
There’s no way to get around it, folks, President Barack Obama and Senate Democrats are playing a dangerous game. Rather than go along with plans to extend current tax rates for all income earner, they’re apparently ready and willing for the economy fall off the “fiscal cliff.”
Recall that the Congressional Budget Office (CBO) warned in May that if the tax cuts expired, the economy would dip back into a recession. More recently, Citigroup noted that the economy would see a 2.9% contraction next year if only “most” the tax cuts remained in place. James Pethokoukis warned that the Citigroup study is especially concerning because the “economy will be lucky to grow 2% next year.”
Unfortunately, these concerns seem to be falling on deaf ears. Sen. Dick Durbin (D-IL) told CNN yesterday that the middle class could see a tax hike if Republicans don’t act on President Obama’s tax proposal. However, Republicans are willing to act provided that President Obama and Senate Democrats agree to extend all current tax rates, including those on the middle class.
Sadly, it seems that they’re more content to play political games with the economy, as evidence by the point-of-view from one Democrat, Sen. Patty Murray, (D-WV), via the Wall Street Journal:
“If we can’t get a good deal—a balanced deal that calls on the wealthy to pay their fair share—then I will absolutely continue this debate into 2013 rather than lock in a long-term deal this year that throws middle-class families under the bus,” Mrs. Murray said, in what sounded like an ultimatum.
That bit about throwing middle-class taxpayers “under the bus” is political spin, because Republicans say they’re ready to vote to extend for another year the current tax rates on all taxpayers, including everyone who makes less than $250,000. The Murray Democrats are the ones holding the middle-class rates hostage to a GOP vote to raise taxes on the affluent.
Mrs. Murray was more honest in explaining her political calculations. “If the Bush tax cuts expire, every proposal [in 2013] will be a tax cut proposal, and the [GOP’s anti-tax increase] pledge will no longer keep Republicans boxed in and unable to compromise,” she said.
“If middle-class families start seeing more money coming out of their paychecks next year—are Republicans really going to stand up and fight for new tax cuts for the rich? Are they going to continue opposing the Democrats’ middle-class tax cut once the slate has been wiped clean? I think they know this would be an untenable political position.”
Unfortunately, the attention isn’t on these games. Because of the absolutely pathetic campaign being run by Mitt Romney, the Republican nominee, attacks have opened up for Democrats to hammer him constantly, whether its his time at Bain Capital or failing to release his tax returns. And they’re using Romney’s wealth as a tool to rail against extending all tax cuts, including those for higher-income earners. Again, this isn’t surprising. It’s politics, but there has to be a point where the games end.
The New York Times noted last week that the “fiscal cliff” scenario may already contributing to the slow down in the economy. Business large and small are, according to the Times, concerned about taxes going up at the beginning of the year, and the uncertainty “could stifle gross domestic product growth by as much as 0.5 percent this year,” according to CBO Director Doug Elmendorf. This uncertainty is keeping businesses from hiring and making investments.
And while we’ve been told by President Obama that Americans are on board with his plans to raise taxes, a new conducted by Marist for McClatchy newspapers that 52% of Americans want the tax cuts to extended for all taxpayers.
Whether Obama and Senate Democrats are going to back off their pledge not to extend current tax rates for all Americans is anybody’s guess. But believe me, it’s not because higher-income earners aren’t paying their “fair share” already. As you can see below, thanks to the graphic put together by @politicalmath, they’re already bearing the brunt of tax payments to the federal government.