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July 09, 2012 10:09 AM Scaling the Cliff

By Ed Kilgore

So this morning’s big campaign news is that the president is calling for a one-year extension of the Bush tax cuts for those earning less than $250,000. This is in instant response to Republican talk of a one-year delay in the expiration of all the Bush tax cuts, and also of the appropriations “sequester” due to go into effect in January, as required by last year’s debt limit agreement (the two prongs of the supposed solution to the supposed “fiscal cliff”) facing the country at year’s end.. And Obama is also anticipating another one of those ritual House votes making all the Bush tax cuts permanent.

Why not? Even if Obama intends to go along with a one-year delay on everything, it’s not likely to happen until after the elections. He might as well restate his position on tax fairness, force Republicans to hold middle-class tax relief hostage to upper-class tax relief, and rinse and repeat as necessary, throwing in occasional demands that Mitt Romney release his full tax returns.

Ed Kilgore is a contributing writer to the Washington Monthly. He is managing editor for The Democratic Strategist and a senior fellow at the Progressive Policy Institute. Find him on Twitter: @ed_kilgore.

Comments

  • kd bart on July 09, 2012 10:13 AM:

    I think you mean less than 250K.

  • biggerbox on July 09, 2012 10:14 AM:

    Um, you mean less than $250,000, don't you?

  • Hedda Peraz on July 09, 2012 10:16 AM:

    "earning more than $250,000"
    Over the weekend, Ed consumed large quantities of GOP Koolaid.

  • c u n d gulag on July 09, 2012 10:23 AM:

    Smart politicking on Obama's part, with NO downside that I can see.

    And yeah, keep hammering at Mitt asking for his other tax returns.

    And how did he manage to get $100 million into an IRS with a $6,000 annual maximum, without starting it 100 years before IRS's were created?

    Oh, and keep hammering at Mitt's foreign bank accounts.

    Gov. O'Malley did a nice job yesterday, asking how many jobs Swiss bank account created, and how many roads and bridges they built.
    And when asked, Mitt's surrogate, Jindal, filibustered the question, and went on an anti-Obama rant.

    Mitts supporters have NO answer to the foreign bank accounts.

    So, THIS!
    KEEP DOING THIS!!!!
    You can all stop on November 7th.

  • Diane Rodriguez on July 09, 2012 10:36 AM:

    Rather than a "demand" to Romney for his tax returns, the questioning approach might work more to Democrats' advantage. Golly gee - Why would he not release the returns like every other Presidential candidate in history? What is he hiding? Speculation can and will run wild. As we have seen, it's more damamging than the facts.

  • rick on July 09, 2012 10:40 AM:

    If Mitt's IRAs are like us serfs, it would take him about 16,000years to accumulate $100,000,000 with a 6K max per year.
    If he didnt avoid one penny in taxes with his Cayman Island account, then why on earth would he have it?
    THIS IS THE SMOKING GUN.

  • David in NY on July 09, 2012 10:54 AM:

    Can't Mitt's IRA's just include mostly roll-overs from retirement benefits he accrued at Bain? (My wife has a lot of money that's nominally in an IRA, but was rolled over from the pension plan of a prior employer.) Or is that too much even for such a scenario? I mean, let's be careful, here.

  • Snarki, child of Loki on July 09, 2012 11:02 AM:

    "Golly gee - Why would he not release the returns like every other Presidential candidate in history? What is he hiding?"

    All of the income from the underage white slavery prostitution temporary 'sister wives' operation. It's not so much money, but Mitt really doesn't want to debate religion.

    He probably had some fingers in the Enron off-the-books special investment funds as well.

  • Wapiti on July 09, 2012 11:03 AM:

    David in NY - if it were an easy answer, wouldn't Mitt just answer the question? The more he stonewalls, the more speculation will occur.

    He isn't answering, and isn't releasing tax returns, because he thinks whatever is there will hurt him worse than just looking suspicious.

  • andrew on July 09, 2012 11:11 AM:

    Hello, the editors? Can we get a check on the first sentence here?

  • golack on July 09, 2012 11:15 AM:

    From what I've read elsewhere, the IRA was loaded up with a special class of stock when he was doing his leveraged buyouts. That way, he'd put in his $6K for those special stocks, but if the deal worked out, they'd be worth millions. Rinse, repeat.

  • David in NY on July 09, 2012 11:18 AM:

    I'm not sure Mitt has been asked any questions about the IRA at all. I agree his failure to talk or release information about any of this is suspicious, and I have no problem generally criticizing his secrecy. But to claim that the IRA must be a product of bad conduct, before we've got the evidence, is going a little far. It is possible to have a bigger IRA than the $6000-per-year limit would suggest by quite ordinary means. I just think it's better not to overstate the case. The case as it is is working fine.

  • Mimikatz on July 09, 2012 11:21 AM:

    It isn't just his offshore accounts and tax havens and wealth. It's that he wants to be President to continue these tax advantages, while Obama wants to raise taxes on the wealthy. Mitt needs to be asked at every turn and especially in the debates how much he would personally profit from his tax proposals.

    That, along with the "if he believes in America why not invest here?" line, are te most devastating.

  • David in NY on July 09, 2012 11:22 AM:

    golack -- interesting. Probably not illegal (but maybe!), but certainly not what the law was intended for.

  • DAY on July 09, 2012 11:30 AM:

    Simple folks need simple ideas. And our tax code is anything but simple; eyes glaze over at the very mention of Mitt's finances.
    We want sexy stuff, preferably with pix and sound bites. (think John Edwards, or "WeinerGate".)
    And, it doesn't even have to involve actual 'sex', as long as it grabs the public's attention, and is SIMPLE.

  • DRF on July 09, 2012 11:34 AM:

    Per David in NY's comment, it's possible that Romney's IRA accounts are bulked up because of his rolling over significant earlier retirement funds that weren't as restricted. To me, the more interesting issues with the IRA accounts are (1) whether Romney deliberately undervalued contributions of stock or other equity instruments (and we are unlikely ever to know the details of this), and (2) how much does Romney stand to save in taxes when he starts drawing down on the IRA accounts if tax rates for the wealthy are further lowered (and how much would he have to pay in extra taxes if the Bush tax cuts for his bracket expire)? As to this latter point, if the IRAs are truly worth $100 million, each 1 point of higher taxes will likely cost him $1 Million.

    I believe the bigger issue politically is his refusal to disclose 10 years of tax returns. I suspect that there are things in those returns that he doesn't want publicly disclosed and that he would rather stonewall on this issue.

  • T2 on July 09, 2012 11:37 AM:

    sounds like Mitt may have engaged in some insider trading. He should have made his returns public the day he announced his run. Less scrutiny at that time since he was just one of about 10 "candidates" including some real rich guys like the Pizza Groper.
    But he stonewalled then just as he is now. My guess is there is something he doesn't want known. I'll put my money on excessive donations to the Mormon Church, and also the clear indication that he is much richer than most people think. The "Swiss Bank Account" angle will be bad for him. He's got a problem with this tax thing, for sure.

  • DRF on July 09, 2012 11:37 AM:

    Obama and the Democrats should keep pressing the call for a limited extension of the Bush tax cuts. He should also be re-introducing his jobs bill. He needs to keep highlighting a Democratic economic/jobs agenda, to contrast with the Republicans' lack of real policy proposals.

  • Josef K on July 09, 2012 11:45 AM:

    Okay, leaving aside Ed getting the direction of the extension wrong, does the President's proposal make either political or practical sense? In political terms, imo, it does. It likewise makes a little less sense in more concrete terms.

    On the political side, it clearly puts the President on the side of those earning under the $250K mark, which in this election cycle could mean a quite a bit. Not a game changer, but helps identify which candidate at least gives some thought to the plight of the middle class.

    But good politics and electoral considerations aside, I can't help but feel the practical consequences will be more nettlesome, especially in light of how labyrinthine Romney's personal wealth is divided up. There may be a feeling of this being a half-hearted effort by the President, especially if news comes out that the highest earners are able to avoid much liability. This is not a election where being seen as a friend to plutocrats is going to go over well.

    I'm not saying this is a bad position for the President to take, but I don't feel it can be taken in isolation, at least not if its to have any substantive affect. Linking it to a wider narrative ("The middle class has sacrificed enough; its time to the rich to pay their equal share.") would make more sense.

    Of course, this is the same electorate that swallowed George W Bush's first 'election', and then elected him for a second term. Who knows what will happen in four months.

  • Gary Armstrong on July 09, 2012 11:46 AM:

    The linked article does in fact state "less than $250,000", so why no correction?

  • cwolf on July 09, 2012 12:45 PM:

    ...throwing in occasional demands that Mitt Romney release his full tax returns.

    ,,, and maybe some copies of his Swiss Bank Statements.

  • jjm on July 09, 2012 1:08 PM:

    Well this comment by a Mitt donor at the Koch Fundraiser is revealing:

    "From one $25,000/ plate donor to Romney at a Koch Brothers fundraiser:

    "I don’t think the common person is getting it…my college kid, the baby sitters, the nails ladies — everybody who’s got the right to vote — they don’t understand what’s going on. I just think if you’re lower income — one, you’re not as educated, two, they don’t understand how it works, they don’t understand how the systems work, they don’t understand the impact." http://thinkprogress.org/election/2012/07/08/512645/romney-donor-says-lower-income-people-dont-understand-whats-going-on/

    The candor is amazing because the assumption that money=intelligence is absurd (Mitt seems a bit 'thick'), and it reveals not only what the 1% thinks of the rest of us (as commoners, peons, ignorant fools whose right to vote should be questioned) and because it shows how insulated they are from ever imagining that such a statement could harm, rather than enhance, her candidate's chances.

  • exlibra on July 09, 2012 1:31 PM:

    I was just writing something similar to what jjm, @1:08PM says, when the 'puter ate my screed. Whether or not R-money is hiding something -- and I'm all for circulating as many wild speculations as possible and suggesting that, even if legal, his actions are totally unpatriotic (invest in Switzerland, Bahamas and Caymans before USA???) -- I suspect his primary motivation in refusing to answer questions is simply sheer arrogance. No member of the great unwashed has any right to even ask questions of him, much less expect answers. The peons should know their place and keep to it.

  • Jose Hipants on July 09, 2012 1:38 PM:

    Romney's tax returns should be easier to produce than a Hawaiian birth certificate. If only there was someone with the moral standing of Donald Trump to demand he show us those returns.

  • Neo on July 09, 2012 2:19 PM:

    It really doesn’t help when former Democratic donors simply run away …

    Denise Rich, the wealthy socialite and former wife of pardoned billionaire trader Marc Rich, has given up her U.S. citizenship – and, with it, much of her U.S. tax bill.
    Rich, 68, a Grammy-nominated songwriter and glossy figure in Democratic and European royalty circles, renounced her American passport in November, according to her lawyer.
    Her maiden name, Denise Eisenberg, appeared in the Federal Register on April 30 in a quarterly list of Americans who renounced their U.S. citizenship and permanent residents who handed in their green cards.
    By dumping her U.S. passport, Rich likely will save tens of millions of dollars or more in U.S. taxes over the long haul, tax lawyers say.
    What do they know that we don’t ? .. or is it simply dollars and cents ?
    I guess she needed time to practice her Austrian.

  • N.Wells on July 09, 2012 2:47 PM:

    Job creations by Romney: several bank janitors in Switzerland and the Bahamas, and the Vice President In Charge Of Keeping Mr Romney Happy at the National Bank of the Caymans.

  • mcc on July 09, 2012 5:27 PM:

    I get why this is good politics, but I'd rather just see all the tax cuts expire. Even Obama's "middle class" tax cut will cost trillions and trillions of dollars-- the Bush tax cuts cost $2.7 trillion over ten years, and only something like $0.7 trillion was the "over 250k" bracket Obama wants to slice off. So if we'd passed Obama's tax cut in 2000, we still would be out $2 trillion dollars we could have spent on economic stimulus, or SUPERTRAINS or whatever.

    And it seems to me that even Obama's "middle class" tax cut will still mostly benefit richer Americans, since the more money you're making the bigger your tax cut is. The Obama campaign's own tax calculator says if you're making a top-1% income of $300,000, you save $3500 under Obama's plan. If you're making a national-household-median amount of $45,000 you only get $1400... I could imagine someone making $45k a year really needing that $1400, but why are we including the $100k-250k bracket again? $100k a year means you're in the top 15% of households according to the 2003 census, 250k means you're in the top 1.5%. How'd we get a frame where we're calling a tax cut for people in the top 1.5% a "middle class" tax cut?

    I feel like if we actually cared about the deficit we'd let ALL the Bush tax cuts expire and bring back Pelosi's proposal to add a new even higher tax bracket at $1 million. And if we actually cared about the economy, we'd do that and then spend the increased government revenue on economic stimulus...

  • Dave on July 09, 2012 8:09 PM:

    It's not for people who earn less than $250,000.00. It's for the first $250,000.00 that anyone makes. It's a marginal tax system.

  • mcc on July 10, 2012 12:50 AM:

    Well, it's not clear to me who that we can sensibly call "middle class" is going to be seriously worrying about how much of the *second* hundred thousand dollars they make per year that they get to take home...

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