Political Animal

Blog

August 24, 2011 8:40 AM The GOP demand for higher middle-class taxes

By Steve Benen

President Obama has been increasingly vocal in recent months about his support for an extension of the payroll tax break approved late last year, hoping that it would help boost economic demand. Congressional Republicans have also been increasingly vocal about their opposition — in effect, the GOP is pushing for a middle-class tax increase to kick in early next year.

I argued the other day that Republicans are probably bluffing — they want the same cut as Obama, but will only approve it if they can trade it for something else. I was promptly told by a variety of people that I’m wrong, and that the GOP is genuinely hostile to any tax breaks that don’t benefit the wealthy almost exclusively. I’m beginning to think those who called me out on this have a compelling point.

Harold Meyerson has a good take today on the larger context.

America’s presumably anti-tax party wants to raise your taxes. Come January, the Republicans plan to raise the taxes of anyone who earns $50,000 a year by $1,000, and anyone who makes $100,000 by $2,000.

Their tax hike doesn’t apply to income from investments. It doesn’t apply to any wage income in excess of $106,800 a year. It’s the payroll tax that they want to raise — to 6.2 percent from 4.2 percent of your paycheck, a level established for one year in December’s budget deal at Democrats’ insistence. Unlike the capital gains tax, or the low tax rates for the rich included in the Bush tax cuts, or the carried interest tax for hedge fund operators (which is just 15 percent), the payroll tax chiefly hits the middle class and the working poor.

And when taxes come chiefly from the middle class and the poor, all those anti-tax right-wingers have no problem raising them.

The debate is pretty striking. The same Republicans who’ve fought tooth and nail for tax cuts for millionaires and billionaires, without even trying to pay for them, are balking at keeping a middle-class break in place. Indeed, the same Republicans who themselves advocated for the payroll tax break are now saying deficit reduction is more important than middle-class workers having a little more money in their paychecks.

James Fallows added yesterday, “I had thought that Republican absolutism about taxes, while harmful to the country and out of sync with even the party’s own Reaganesque past, at least had the zealot’s virtue of consistency. Now we see that it can be set aside when it applies to poorer people, and when setting it aside would put maximum drag on the economy as a whole.”

It’s against this backdrop that House Majority Leader Eric Cantor (R-Va.) publishes op-eds accusing the Obama administration of having a “pro-tax agenda.” The irony is rich.

Given all of this, Democrats are starting to look at this issue as a valuable political opportunity. In fact, Sam Stein reported yesterday that the Democratic National Committee intends to make the payroll tax cut a key issue in the coming months, intended to put Republicans on the defensive and highlight the GOP’s antipathy towards the middle class.

If for no other reason, the political dynamic seems likely to push Republicans to cave on this, even if they oppose the policy. After all, do they really want to let Obama become the champion of middle-class tax cuts, while the GOP gets branded as the party that raised taxes on working people during a weak economy?

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.

Comments

Post a comment
  • Mark-NC on August 24, 2011 8:46 AM:

    Republicans always favor the rich, and there is a sea of idiot bottom 80% people that are too dumb to figure this out.

    I think they are safe in doing almost anything.

  • ComradeAnon on August 24, 2011 8:46 AM:

    What's the guess on what Obama will give away for this temporary tax reduction to be extended?

  • FRP on August 24, 2011 8:53 AM:

    It may be possible here to shame a shameless position tout . It is likely the howling will get their attention , ya know .
    Thurston Hooowwwwllll , he he he , he ain't got the throats of the workers . Sure he is a Howell , but no outraged family budget maker , rain facing paycheck citizen .
    It still irks me that the war on women doesn't equal a tax rise through the tactic of elimination of childbearing considerations to edge out abortion choice .
    Irks me I say .
    Thank you

  • Kathryn on August 24, 2011 8:56 AM:

    They (GOP) think they can get away with it and unless media points out yet another hypocrisy (DCCC too), they will. Every Democratic spokesperson should begin any comment with a short statement that the Republicans want to raise taxes on the middle class not hedge fund managers.

    Steve, please don't miss Perry's riff on Civil Rights in S. Carolina yesterday. Short lip service about civil rights turns into a plea for tax freedom for the so called "job creators". The Republican Party has reached it's apex with this buffoon.

  • RepublicanPointOfView on August 24, 2011 8:57 AM:

    To say that we republicans are opposed to all tax increases all the time is completely inaccurate!

    We favor letting the payroll tax cut expire. We could even support increasing the employee side of the payroll tax by more than 2% if we could get at least half of the increase on employees as a decrease on employers. Naturally, we are completely opposed to raising the cap on which payroll taxes are collected.

    We also favor creating a minimum 10% income tax on all working Americans who now avoid paying taxes simply because they don't make enough money.

    We also favor applying this minimum income tax on unemployment subsidies and social security and counting medicare and medicaid costs as income for tax purposes.

    See, we republicans can support tax increases. They just need to be targeted at the right groups. We republicans do support shared sacrifice among the poor, elderly, working classes, and the diminishing middle classes.

    Our positions on taxes are very logical when you understand (as we do) that the only problems with our economy are that the wealthy (job creators) do not have enough wealth and that we have too big a middle class!

  • Marko on August 24, 2011 8:57 AM:

    do they really want to let Obama become the champion of middle-class tax cuts, while the GOP gets branded as the party that raised taxes on working people during a weak economy?

    Well, yes. But they will figure out a way to spin it so the base will think that's a good thing.

  • martin on August 24, 2011 8:58 AM:

    If only the Dems knew how to play this game everyone of them would be condemning the Republican 43% tax increase on the middle class.

    If only...

  • c u n d gulag on August 24, 2011 9:01 AM:

    This just proves that they will do anything, ANYTHING,
    A-N-Y-T-H-I-N-G!, to make the economy worse.

    How they think raising taxes on the middle class is a winning argument is beyond me.

    But I'm sure that Luntz and the Think Tanks will find a way.
    -Then Drudge will be given it.
    -The Right-wing bloggers will support it, and the commenters will tell everyone how Liberals suck, and need to die or be killed if they oppose this! And die or be killed even if they do support it!!!
    -Rush and the RW radio yappers will bellow it, loud and proud.
    -FOX News will spin and spin.
    -The RW Pundits will chime in.

    And we'll have President Perry and VP Rubio proudly announcing that the new Republican House and Senate have just passed the largest middle class tax increases in history, and that they'll sign them, to the "HUZZAH'S!" of the morons in the middle class who voted for them.

    That'll teach them Liberals! HA!!!

  • slappy magoo on August 24, 2011 9:09 AM:

    Interesting debating point. I can't wait to see how the Democrats f*ck it up.

  • rrk1 on August 24, 2011 9:13 AM:

    c u n d gulag is right.

    This is simply part of the strategy to make the economy as weak as possible, and tag Obama with the blame. The Rethugs know how to do it. They have the well-oiled propaganda machine, and the media echo chamber in their pocket, and they will use them both to make a tax increase on the middle-class look like the best thing since a ham sandwich.

    The Dim-Dems never know what hits them, and when they do figure it out the damage has already been done. Unfortunately, Obama is complicit, either by virtue of personality, conviction, or arrogance, and he's setting himself up for defeat.

  • berttheclock on August 24, 2011 9:14 AM:

    But, but, but, if you raise taxes on the Super Rich, how many new jobs will not be created in China by the Waltons?

    The RepuGs have created many new jobs in the 3rd World. When, will they realize they have helped mold this nation into a 3rd World country and it would be perfectly OK to create jobs here, as well.

  • sick-n-effn-tired. on August 24, 2011 9:18 AM:

    You people are missing the big picture . Anything and we do mean anything that causes the economy to tank is good if it stops Obama from being reelected. That said I will repeat what Mr. Gulag said ...it will be spun by a Luntz -O-Gram so that the Morans think this is a good thing .
    i.e. Man we're going to stick it to those 50% that pay no taxes.

    See Jon Stewart for the definitive
    http://www.thedailyshow.com/collection/395227/for-richer-not-poorer/394982

  • Josef K on August 24, 2011 9:25 AM:

    After all, do they really want to let Obama become the champion of middle-class tax cuts, while the GOP gets branded as the party that raised taxes on working people during a weak economy?

    While I agree with other commentators here that the GOP will likely go this route (Boehner and McConnell proving they couldn't lead their caucus if they really tried), I also think this is an issue the public can and will get behind and damage the GOP at the polls.

    The debt ceiling issue was always poorly explained and defined; neither the President nor the Democrats made the case in concrete terms the average voter could attach to their own lives. A "middle class tax increase" is a much different animal, about as concrete a political issue as you can get. 'Pocketbook issues' are easily explained and ensure people's attention.

    Don't expect for a moment this will change the Tea Party's orientation nor convince red states to go blue. But it will (hopefully) get the electorate out in large enough numbers to put paid to the GOP's majority.

    One can but hope and work towards that, anyway.

  • AndThenThere'sThat on August 24, 2011 9:30 AM:

    And we'll have President Perry and VP Rubio proudly announcing that the new Republican House and Senate have just passed the largest middle class tax increases in history, and that they'll sign them, to the "HUZZAH'S!" of the morons in the middle class who voted for them.

    Intentionally hurting the economy is only for Obama's watch. In the event you hypothesize, the Republican apparatus you describe will do an instant pivot on debt. If they wreck the economy badly enough between 2010 and 2012, President Perry will swoop in and insist slashing taxes on "job creators" is priority number one for stabilizing the economy. And depending on the mood they're in, the GOP may even throw in a modest middle-class tax cut in exchange for gutting Medicare.

    In either case, the "HUZZAH'S!" is spot on.

  • filkertom on August 24, 2011 9:33 AM:

    I'm really beginning to wonder if the Repubs are actually buying into a combination of the 2012 end-of-the-world stuff and the Rapture, figuring that they can somehow take it with 'em and they only have to hold on for another years or so.

  • zandru on August 24, 2011 9:35 AM:

    "The Republican Party has reached it's apex with this buffoon."

    I think you mean "nadir", not "apex" - with apologies to Ralph.

    Also, like I always say, we need to start getting this meme out, instead of just sitting back to bash the Democrats. Like I've said, the Democrats are basically a group of folks much like ourselves: disorganized, disparate, but tragically, much less articulate.

    So start "catapulting the propaganda"! (g--, I hate the way that man's phrases stick in my head) Mr. Benen provides concise, lucid and eminently quotable summaries (unlike certain other bloggers...) Use them!

    If nothing else, you can email these articles in their entirety to the whole humongous CC: list that your Tea-Bag uncle sends his rightwing screeds to. (heh, heh, heh...)

    "Bedlam: sicPubl" - precisely.

  • Texas Aggie on August 24, 2011 10:04 AM:

    They have Fox on their side. See your previous post. With Fox touting their position that Obama wants to raise taxes without ever even once mentioning that the republicans are the ones who want to raise taxes on the working class, then most people will never know what they're doing.

  • AMS on August 24, 2011 10:11 AM:

    Maybe I'm naive, but I don't see how even the GOP can spin this into a political winner for them with the broader electorate. This is an increase that will directly affect everyone who earns less than the cap---people will see less money in their paychecks right away. How does this turn into an advantage for the GOP?

    I do think that the puzzling phenomenon of middle- and working-class people vociferously defending the perks of the affluent has something to do with Americans' love of winners and desire to identify with them. Republicans present themselves as the party of winners---at least in the material sense---and have been somewhat successful in defining Democrats as the party of losers---those who are dependent on government, needy, marginalized, etc. Never mind that it's a bogus formulation, many people want to see themselves as aligned with the successful. But, even given that, I just don't see how the payroll tax issue is anything but a huge political disaster for the GOP.

  • Anonymous on August 24, 2011 10:44 AM:

    Republicans opposed the $300 billion in tax cuts that were included in the stimulus bill.

    They rant that the stimulus bill failed ($300 billion in tax cuts) and that the payroll tax cut failed, but their solution for the economy? Tax cuts...

  • sparky on August 24, 2011 10:46 AM:

    First of all, a couple of thoughts on the payroll tax. It is NOT a tax shared equally by employees and employers. When an employer figures his labor costs the 6.2% payroll tax has to be factored into those labor costs. Therefore the 6.2% payroll tax contribution equals 6.2% less that the worker is going to be paid. The tax is based solely on the workers wages. this means that a minimum wage worker actually pays 12.4% in federal taxes on ALL income. Ditto for medicare. Giving the employer any break in payroll taxes will constitute using the workers' wages to provide a tax cut for employers. The republicans probably realize that fighting an extension of this middle class tax break is bad politics and will instead try to demand total elimination of the estate tax(at a cost of over a trillion over the next ten years)in return for suporting the extension. That would be a fair trade since the estate tax actually hits less than one percent of all estates--the rich get a trillion while the middle class get a hundred billion. Republican logic will say this is a fair trade and people who are never going to inherit or bequeath one red cent will jump on the bandwagon to end the "death tax."

  • gifgrrl on August 24, 2011 11:27 AM:

    I actually heard a host on NPR this past weekend spell out exactly what the Republicans are thinking. She said (and I'm paraphrasing here), "Republicans are trying to end a tax break for middle and low income people. These are the same Republicans who insisted that taxes on the rich cannot be raised. They want to raise taxes for the middle class but never for the wealthiest Americans."

    My teeth almost fell out, to hear someone in "mainstream" media be so clear. Without any "but on the other hand..."

  • Steve M. on August 24, 2011 11:43 AM:

    And, in addition to this, Rick Perry calls Social Security and other New Deal programs a "bad disease," while his likely running mate, Marco Rubio, says New Deal programs "weakened us as a people."

    When they win, and start acting on these beliefs, we can't say we weren't warned.

  • KarenJG on August 24, 2011 7:22 PM:

    Frankly, I don't want the payroll tax cut extended either - I oppose anything that will make it easier to claim that Social Security is "broke" and "benefits must be cut." If they're going to fight for this money, I'd rather the Dems put their energy into getting a 2% *income tax* cut an all wage income under $100,000. Or even under $50,000. They picked the wrong battle.

    IMeversoHO, of course.

  • Doug on August 24, 2011 9:14 PM:

    re KarenJG @ 7:22 PM

    Considering that the SS Trust Fund is ALREADY owed $2.7 trillion, adding another $250-300 billion won't hurt. Those who complain about the Trust Fund going "bankrupt" have their own aims in mind and balancing the budget ISN'T one of them.
    Should anyone you're having a conversation with diplay any fear of a "bankrupt" SS, reply to those fears the way I do: The only way SS COULD ever go "bankrupt" would be if a Republican President and a Republican Congress defaulted on the bonds in the SS Trust Fund.
    If THAT happens, not having SS around will be the least of their worries...

  • josh on August 29, 2011 11:13 PM:

    i used to be a republican.i just didn't fully understood what they stood for.but as i got older and started a family i realized the GOP was against me.they only work for the rich and dont give a damm about the middle or lower class.i just cant understand how people dont realize this,they're voting against their own interest.I despise the GOP now and will vote democrat the rest of my life.

  •  
  •  
  •