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Tomasky writes: "There are ways in which politics is the most reactionary arena there is. When it comes to customs and roles and so on, the political culture is still half stuck in the 1950s."

President Obama on the campaign trail. (photo: AP)
President Obama on the campaign trail. (photo: AP)



Play Offense, Obama!

By Michael Tomasky, The Daily Beast

11 July 12

 

arack Obama surely does not think the Republican House is going to agree with him suddenly and pass an extension of the Bush tax cuts on dollars earned (not people, dollars earned; see my explanation of why) below $250,000 a year. But he’s right to keep this issue front and center. I hope that this is the first salvo in what will be an ongoing attempt to focus Americans on the tax choices they face, and to educate people a little bit about how taxes are actually paid in this country. It’s a debate he can win hands down, and one that will only tilt the polls even more in his direction and make Mitt Romney look more plutocratic than he already does. But he needs both more facts and more fire.

First, let’s have a few facts, because they help explain why continuing tax cuts for middle-income people is easier to justify. You can find the rates for 2012 here. You can find the rates for all of American history, all the way back to 1913, when the federal income tax was introduced, up to 2011, here. A person (a single filer) who was making $40,000 in 2000, the last year of the Clinton rates, and who might be making $50,000 now, has experienced very little tax savings. She’s actually paying more taxes in 2012, by a few hundred bucks, but that’s partly because her income went up. The percentage of income she’s sending to the IRS has decreased a bit.

Now imagine someone who made $250,000 then and $350,000 this year. He pays five different rates, and I won’t go through them all, but he paid a top rate of 39.6 percent on his last $106,000 earned in 2000. In 2012, though, he’s paying just 33 percent on every dollar from about $178,000 to $350,000. He’s making out awfully well—paying roughly $12,000 less per year than he would be at the old rates. A person making $1 million is paying more than $50,000 less.

I go into these numbers because it’s so important to have some reality in this conversation. Everybody talks about the billions, and they’re important. But we rarely write and talk about how we actually pay taxes. I submit that doing so illustrates the key substantive points on Obama’s side. First, in moral terms, the current rate structure is grossly inequitable. But second and more important, this is about stimulating the economy. The middle-income woman is almost certainly going to take her tax savings and spend it. She probably doesn’t have the luxury of saving or investing it. The $350,000 earner? Well, maybe he’ll spend it on a more tricked-out and suped-up Lexus. Or maybe he won’t. The $1 million earner? He’ll almost certainly sock away most of that $50,000, unless this happens to be yacht year.

That’s the substantive case. Extending the tax cuts for the working and middle classes will help stimulate the economy. And this is about the only stimulus we’re likely to get, as we know. As for the upper incomes, the GOP line that this will crush small businesses, trotted out tiresomely by the Romney campaign, is blather. The vast majority of small-business owners don’t have incomes like that and will not be affected by Obama’s proposal.

And even if they are, let me introduce a little more—and more revealing—tax reality into this conversation that no one ever, ever speaks of. Let’s say a small-business person, or anyone, does end up with $270,000 in taxable income. The way the media write about this, you would assume that Obama wants to increase the rate she pays on every dollar. But no! This is emphatically not true. She would pay the higher, 39.6 percent rate only on dollars earned above $250,000—in other words, only on her last $20,000. That’s a whopping tax increase of $1,320. And it’s something that a person who’s hauled in $270,000 in taxable income (that is, after taking deductions, meaning that her gross income was probably some tens of thousands higher than that) can probably handle.

Now. Politics. I’m well aware that it’s likely impossible for a politician to explain all this stuff to people. But it shouldn’t be impossible to take my second example and use it to illustrate the fact that the increase doesn’t even amount to much until you start talking about really rich people. And it shouldn’t hard to make the stimulative point, either. But in his remarks on Monday, Obama didn’t really make either point. Watching Obama make these pitches is sometimes like watching Peyton Manning line up behind center and hand the ball off to his fullback six times in a row. Dude, throw the ball! Play offense!

Put this squarely on Romney and the Republicans. I know I’m a broken record, but it’s a waste of time for Obama to talk about compromise. The House is not even going to have a vote on it. We all know this. So tell the American people that the House is the only thing standing between them and the current, lower tax rates, and that Mitt Romney is on the House’s side, not the American people’s, and for what? For the sake of making sure that people who make $1 million a year get that extra $50,000. That would get people’s attention. My guess is that John Boehner, Mitch McConnell, and Mitt Romney read Obama’s remarks from yesterday and thought: “Nothing to worry about here.”

Facts and fire. That’s what we need to see in the next four months.

 

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-14 # Zagreus 2012-07-11 21:15
The usual BS. Obama makes a grand proposal that sounds populist, that he KNOWS will never get through Congress. Then when it doesn't pass, he can throw up his hands in mock frustration. His Wall Street handlers are happy, and his brainwashed constituency can wring their hands in despair that progress has been thwarted again.

Obama just steps off stage and grins,. He's conned the progressives again. His fellows in the 1% and the Harvard Club are proud. Life is peachy.
 
 
+6 # BradFromSalem 2012-07-12 04:48
Pretend that Obama really does believe in raising taxes on the rich. Now, tell me what he would do different?

If the Republicans would in fact meet half way, then your argument stands true. But they will not budge a penny on their no taxes pledge, and with the control of the House and effective control of the Senate via the "fullofitbuster " Obama cannot do any more than he has.

Unless you advocate he order the Army to arrest all the Republicans in Congress for treason. Works in the 3rd world.
 
 
-2 # Rick Levy 2012-07-11 21:35
"Put this squarely on Romney and the Republicans. I know I’m a broken record, but it’s a waste of time for Obama to talk about compromise."

I know that I'm also a broken record but for Obama to confront the rethuglicans, he'll first have to grow a pair.
 
 
0 # grouchy 2012-07-11 23:18
This piece shows a prime example of the needed question, "just who in hell is advising Obama?" I never expected him to make all the calls himself but to have good advisors in the wings. Good grief, hasn't his crew learned anything in the past 3+ years? Maybe he needs to find some new staff with real balls (the guy kind of ones, not the game playing kind).
 
 
+6 # Barbara K 2012-07-12 04:46
Not only the President needs to go on the offense, so do the Dem governors. We've been hearing about all the voter suppression going on in the R states against the Dem voters. Well, Dem states, get busy and purge some Rs from your voter rolls to even out the odds. They are using crooked ways to stack the deck against the Dems and Obama. Dems can get busy and even out the odds. There is no time to play nice when they play dirty. Fight fire with fire.
 
 
+2 # BradFromSalem 2012-07-12 06:26
Barbara,

Don't forget the Congressional candidates! Even here in MA, the supposedly Liberal stronghold, the Republican may unseat my Congressman. The Right Wing propaganda machine is spinning nonstop fueled by the Kock (sic) Brothers money and Karl "turd blossom" Rove's SuperPacs. On the other hand, all this money flowing and support jobs flowing into the state is like a mini stimulus. Ah, I love the irony. Watch out for Deval Patrick as Obama's successor in 2016, you heard it here first.
 
 
+5 # AndreM5 2012-07-12 06:49
I have been wondering if there ARE any decent Dem governors left. They are so silent I have trouble naming any.

Today I hear CA Gov. Brown railing against the banksters and "ripoff" (his word) they perpetrated against CA homeowners. He nailed it but you probably will not hear the speech, maybe on PBS, if that.
 
 
+5 # tabonsell 2012-07-12 10:56
One tactic the Dems could use--if they retain control of the Senate and pick up strength in the House--is to refuse to accept the voting totals from states that purged their voting roles when counting the results of the Electoral College.

Remember, it is not the voting totals that determine the presidential winner, but the Congress that counts and verifies the results.

Congress could have used this tactic in 2000 to exclude the Florida votes until a complete and honest recount had been conducted. But since Congress was controlled by the Republican Party at the time, that would never be done because those GOP 'tards care not a bit about fairness, honest, constitutional integrity or anything else that indicates a civilized society.
 
 
+4 # Buddha 2012-07-12 07:36
I actually disagree with the author, I think this kind of framing the argument using the very language of Conservatives is part of the problem for Dems. Obama shouldn't be working so hard to rationalize why such low taxes shouldn't be continued for the top 2%, he needs to change the entire frame of conversation to get Americans to understand and accept that much of us in the upper-middle class need to be paying more too. Americans have come to accept that they can have the services and programs we've come to expect (SS, Medicare, food stamps and welfare for the poor, global empire, etc) and not have to pay for them (we pay the lowest taxes of any developed nation). And that is wrong, and that kind of thinking is why we have the debt load we do. Let's be honest, Obama's tax cut extension plan raises what, about $100B/yr at most? Wonderful, that is 10% of our current deficit...and means that drastic cuts in Social Insurance are going to still be needed. I fall somewhere in the top 6% income...and while I don't feel rich, statistically, I AM rich when you look at the median income and wealth numbers. Look, nobody WANTS to pay taxes, but the reality is that many of us SHOULD be paying higher taxes if we are serious about our debt and serious about defending Social Insurance programs, just targeting the top 2% isn't going to cut it.
 
 
+1 # tabonsell 2012-07-12 10:47
I want to make one thing perfectly clear: the mega-rich have not been "socking away" all their savings from tax cuts on their millions of incomes. They've been investing it; investing in Treasury debt instruments.

When Ronald Reagan first cut tax rates from 70% to 50% on the last million obtained (oops, almost said earned), the mega-rich didn't invest that $200,000 saved per million of income in new business ventures, they totted over to the US Treasury and bought T- notes, bills and bonds. At the time those were producing double-diget interest payments. And the working middle-class kept paying taxes that provided the income to the mega-rich.

Reagan later got the top rate on those million down to 28%, which made Treasury investments more attractive even as interest rates were dropping.

Then we add the payroll-tax increase Reagan got in 1983 and the subsequent surpluses in that tax, which were diverted into the Treasury by the Deficit Reduction Act of 1984 to mask the severity of Reagan's deficits. That completed Reagan's screwing of the working middle class to benefit the mega-rich, which of course included him.
 
 
+1 # hkatzman 2012-07-12 20:51
In the 2008 elections, Obama beat Hillary with a decentralized bottom-up campaign. He raised money and organized and networked the grassroots. While Hillary was topdown, raising funds from the fatcats and using topdown leaders to reach the masses.

Oddly though, after having a winning strategy, Obama has now become Hillary. He now appeals to the power structure that will never support him. The 2008 Obama would have ignored the media, and sidestepped Congress and gone directly to the people to pressure their Representatives . He would have made eloquent speeches to explain complex concepts to the public. He would be organizing through the internet.
 

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