Less than a week after winning a second term, President Barack Obama has unveiled his first true priority — higher tax rates on “the wealthy”. House Speaker John Boehner quickly adopted a supine position, which he only hemi-demi-semi-repented after a sharp kick in the caboose from the Republicans he, in theory, represents.
Let me lay down the President’s public position here. We’ll come back later.
“If we’re serious about reducing the deficit, we have to combine spending cuts with revenue, and that means asking the wealthiest Americans to pay a little more in taxes,” Mr. Obama said in the East Room of the White House.
“I’m not wedded to every detail of my plan. I’m open to compromise,” he added. “But I refuse to accept any approach that isn’t balanced.…And on Tuesday night, we found out that the majority of Americans agree with my approach.”
On Sunday, renowned Republican Bill Kristol, who I would ordinarily ignore after his ridiculous Romney rah-rahs, appeared on Fox News with an idea…a crazy, stupid idea.
“Elections have consequences… The leadership in the Republican Party and the leadership in the conservative movement has to pull back, let people float new ideas. Let’s have a serious debate. Don’t scream and yell when one person says, ‘You know what? It won’t kill the country if we raise taxes a little bit on millionaires.’ It really won’t, I don’t think. I don’t really understand why Republicans don’t take Obama’s offer to freeze taxes for everyone below $250,000. Make it $500,000–make it a million. Really? The Republican Party’s going to fall on its sword to defend a bunch of millionaires? Half of whom vote Democratic, and half of whom live in Hollywood, and are hostile to Republican principles?”
This has conservatives like Joel Pollock of Breitbart, Jim Hoft , and The Lonely Conservative in high dudgeon, which I understand. We know who Barack Obama is. We know who his friends and mentors are. We know what his version of “compromise” looks like. We can safely decipher the subtext of the Presidents remarks as “I won, so make with the tax hikes, losers”. Those who seek a “balanced approach” to a debt of $16 trillion dollars are the same kind of people who think we should split our Squatch-hunting time between the forests of the Pacific Northwest and downtown Manhattan.
But, we conservatives have been fighting on the low-tax ground forever and it’s increasingly apparent to me that we’re getting our tails handed to us. The math is on our side. Economics works for us, not progressivism. Of course the left-wing press for higher taxes on “the rich” eventually means higher taxes on and more government control of everyone. We’ve said for almost my entire adult life the benefits — the truth — of smaller government, lower taxes, fewer regulations are self-evident.
Obviously, they are not. In fact, not only aren’t they self-evident, they’re not particularly easy to sell nowadays. If they were, we’d just have finished the second term of President McCain with full majorities in the House and Senate, Barack Obama would be a discredited back-bencher, and Harry Reid would be the head of some obscure boxing commission in Nevada. There is, quite literally, no one on the right at present who can beat the Democrats’ well-practiced, focus-grouped, razor-sharp message that “the rich” are getting over on the rest of us and, for the sake of the Republic, we have to give them a fiscal haircut they’re barely notice.
Republicans lost this argument years ago. They have no answer for it, as we’ve seen over the last few election cycles (save 2010, when we took control of the message ourselves and dragged some Republicans to big wins). Barack Obama beat Mitt Romney with it so hard and so often that, had the election been a wrestling match, even Bobby “The Brain” Heenan would have called for mercy.
Maybe it’s time for us to take Bill Kristol’s suggestion seriously.
Hear me out here. Ronald Reagan made the case for limited government well in 1979, but he had help. A lot of help. Make no mistake; I am not diminishing Reagan’s marrow-deep understanding of why conservative economics works nor do I want to discount the decades he spent honing his message in hundreds of public speeches and radio broadcasts. Let’s look at the numbers, though. The top tax rate in 1979 was 70 percent. A married couple with an AGI of $63,000 — in inflation-adjusted dollars — faced a tax rate of 28 percent. Today, that same couple making that same amount (inflation-adjusted, remember) faces a rate of only 15 percent. That same Richie Rich now has a 35 percent tax rate. This is what I mean by help. It is a lot easier to say “don’t crank up taxes on the rich. In fact, lower taxes on everyone” when the middle class is paying almost 30 percent of their income to Uncle Sam every year and business owners and job creators are forking over 70 cents of every taxable dollar. Nowadays, those numbers are much smaller, and since we conservatives have spent so much time arguing on the numbers, the Democrats have stranded us on a relatively small patch of ground. Arguing tax rates instead of making the compelling moral case for lower taxes and responsibly-sized government put us ground we shrank ourselves. Now, we’re down to defending people like Warren Buffett and George Clooney against the rapaciousness of the very party mandarins they wholeheartedly support.
So make the rates higher. A lot higher.
Barack Obama wants to raise tax rates a little? Give him the go-ahead to raise them as much as he wants. Let him double the rates on “millionaires and billionaires”. Let him increase the rates on the middle class (which will have to happen fairly quickly, by the way). Stand up and say, “America has spoken. President Obama’s desire to raise taxes and spend more money is clearly also the will of most of the voters. As he said, he won. we will help him achieve all his goals and put all his economic plans into place. We only hope that once you have seen the results of his foolishness you will consider us a viable option again”.
After that, let him do whatever he wants. Wait. Watch. Take careful notes of all the new taxes and what those taxes are doing to the economy. Talk to your new media outlets and make sure they all have solid numbers every single month. Run an ad every once in a while that simply notes the progress: Democrats raised taxes by X percent. They promised X amount of revenue. We have really gotten X amount of revenue. The economy has grown by X rate and we need it to grow by X rate. We have created X number of jobs and lost X number of jobs. The New Great Recession is X months old.
Be sympathetic to the coming cries of the electorate. There will be pain and we need to hear it very clearly and commiserate with it. Point out how we’re all feeling it except, maybe, for those people precious to the Democrats who got government exceptions, waivers, and pork.
It’s going to be ugly for a while, but we can’t change that. It may be that the best we can do is listen to Bill Kristol, let the President have what he wants, buckle up for the ride to Recessionville, and take good notes about how we got here. In just a couple or three years America will need us sorely and we’ll have to lead the nation back.
Category: The Economy and Your Money