The latest white-knuckle cliff-hanging fiscal cliff adventure comes to us courtesy of CNN, which headlines a Wednesday article on the latest statements from the Speaker of the House as: “The rich will pay more taxes, Boehner says.”
The theme is developed through the first paragraphs of the story:
Taxes on the wealthy are going up, House Speaker John Boehner conceded on Wednesday in challenging President Barack Obama to sit down with him to hammer out a deal for avoiding the fiscal cliff.
Obama, however, continued to insist on Republicans first ensuring no tax hike for anyone but the top 2% of Americans as a first step toward a broader agreement on tackling the nation’s chronic federal deficits and debt.
The statements reflected how negotiations on the automatic spending cuts and tax hikes set to occur on January 1 — the fiscal cliff — have evolved since Obama’s re-election last month.
Republicans once opposed to any new revenue in their quest to shrink government now realize Obama’s victory and public support for the president’s campaign theme of higher taxes on the wealthy leave them with little negotiating leverage.
Funny how the evil One Percent suddenly became the evil Two Percent, isn’t it? A media less interested in serving as Barack Obama’s volunteer press office might ask some questions about that.
But it’s not really true anyway, and neither is much else in those first paragraphs. A sizable portion of the people Obama wants to slam with higher taxes are not in the top 2 percent of personal income earners; they’re small businesses filing individual tax returns. The people who will pay Obama’s taxes aren’t taking home the same sort of personal income as salaried heads of household who earn over $250,000 per year.
Obama is not a noble defender of the midle class, fighting to protect them from taxation. He’s already taxed the hell out of them through ObamaCare.
Republicans calling for more revenue may be wrong-headed in the view of free-market conservatives, but they’re not new. Mitt Romney called for increased income through capping and terminating tax deductions during the 2012 campaign (as did Barack Obama, once upon a time.) Very few individual Republicans have changed their position one way or the other as a result of the election. I can’t think of anyone prominent who seriously “opposed any new revenue in their quest to shrink government” who has undergone a severe change of heart. The people amenable to new revenue today were also amenable to it a year ago. The amount of new revenue they’ll go after, and their means of obtaining it, are the hot topics of discussion.
As for Speaker Boehner, what he actually said is not mentioned until later in the CNN report:
“We have got to cut spending and I believe it is appropriate to put revenues on the table,” Boehner told reporters on Wednesday. “Now, the revenues that we are putting on the table are going to come from guess who? The rich.”
He continued by saying “there are ways to limit deductions, close loopholes and have the same people pay more of their money to the federal government without raising tax rates, which we believe will harm our economy.”
In other words, exactly what he’s been saying for weeks. President Obama is mindlessly, destructively fixated on getting tax revenue by raising rates; Boehner wants to do it by reforming deductions. I think it’s a mistake – and downright delusional, given the actual numbers – to concede that the deficit is a matter of insufficient government revenue. To begin the discussion that way is to take leave of our senses, before another word is spoken. And if we’re going to increase government revenue, we should be doing it by increasing our economic output, so the State gets more money through cutting a smaller slice out of a bigger pie. That would involve tax cuts, particularly in some of the areas where Obama is keen to increase them, like capital gains and corporate taxes.
Obama wants rate hikes for entirely, purely political reasons. His base wants the rich to be soaked, and he knows the Republican base will be angry with its leadership for agreeing to rate increases. High rates with a maze of deductions are socially divisive, and he likes it that way. Not for one microsecond does Barack Obama care about the deficit, the national debt, or the health of the American economy.
If anyone has “changed their position” since the election, it is Barack Obama. He’s the one who was talking about “balanced approaches” and “$3 of spending cuts for every dollar of tax increases” until he got safely re-elected. Any media outlet that tells you otherwise is peddling pure propaganda, and should be ashamed of itself.
Update: I hate to qualify the above by saying “but I still don’t approve of the way Boehner is handling the fiscal cliff, and I think he likely will cave on tax rate increases.” But I don’t, and I’m afraid he probably will. The salient point of the moment is that he hasn’t done it yet.