Obama Draws Line in the Sand

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On tax cuts, Obama decides to fight, Ezra Klein writes. Yesterday, the President proposed

… a one-year extension of the Bush tax cuts for families making less than $250,000 and, through his press secretary Jay Carney, promising to veto any effort to “extend tax cuts for the wealthiest Americans.” It’s a strategic decision that could have a tremendous effect on the economy — and thus on the president’s chances in the fall.

Ezra says this is politically riskier than it sounds, because it could set off a market panic during the height of the presidential campaign. His argument is based on data showing that markets and job growth slumped dramatically last year during the debt ceiling fight. I’m not sure I buy that argument, but I think it would hurt Obama worse politically if he didn’t fight the extension of the tax cuts.

A New York Times economics blogger says that cutting taxes on income above 250,000 would reduce the economy:

Mark Zandi, the chief economist at Moody’s Analytics, estimates that allowing tax cuts for Americans who earn above $250,000 to expire at the end of 2012 would reduce gross domestic product growth in 2013 by $40 billion, or about 0.24 percentage points.

Allowing the “middle class” tax cuts to expire would shave an additional 1.06 percentage points off economic growth. That means letting all of the Bush tax cuts phase out would cut about 1.3 percentage points from growth.

Yeah, but Moody’s has little credibility with me. And Krugman says the reduction on top earners would mostly be felt by the top earners and have little or no impact on anyone else.

The important point politically is that the President is daring congressional Republicans to stand in the way of extending middle-class tax cuts because they are holding out for millionaire tax cuts. And Mittens, possibly for the first time in his life, has taken a firm stand. He is opposing the President —

Mitt Romney blasted President Obama’s push to repeal the Bush-era tax rates on incomes over $250,000 per year, saying it “will kill jobs.”

In an interview with WHKT-AM, a Virginia radio station, on Tuesday morning, the presumptive GOP nominee said the proposal would impose “a massive tax increase on job creators and on small business.”

He also called it “another kick in the gut to the middle class in America.”

Yeah, keep that up, Mittens. This is the guy who assures us there is “nothing hidden” in the tax returns he won’t release. This is the same guy who says he didn’t know anything about investments in the Caymans and Bermudas, including (one assumes) the Bermudas corporation he set up himself in 1997 and then transferred to his wife’s trust the day before he was inaugurated governor of Massachusetts.

So, one must ask, has Mittens himself ever looked at his own tax returns to see what’s in them?

At Vanity Fair, Dan Amira says everyone, including the President, is mis-reporting the president’s tax plan. The tax is on income, not individuals; it is on income over $250,000, not on individuals making more than $250.000. So if the tax cuts are continued on income below $250,000, the very rich would still get those cuts, too. And be sure to see the one chart that shows us what the tax cut fight is about.

8 thoughts on “Obama Draws Line in the Sand”

  1. “…estimates that allowing tax cuts for Americans who earn above $250,000 to expire at the end of 2012 would reduce gross domestic product growth in 2013 by $40 billion, or about 0.24 percentage points.”

    Wow, who knew there was $40 billion at stake in champagne, caviar, yachts, limo’s, sports cars, 2nd and 3rd vacation homes, 2nd mansions, private planes, dressage horses, boathouses, garages with elevators, offshore accounts as tax shelters, stuffing IRA’s with beyond-max contributions, etc.?

    Because, ever since Bush gave the top 2% a huge tax cut, that’s where these “Job Creators” money from those tax cuts have been going, instead of ‘creating jobs.’
    Especially the ones in Mitt’s bracket and above – if, after all the offshore cash is counted, there IS anyone above. But there probably are, since he’s making himself available to be their willing “Piss-boy” and “Ass-kisser” in government.

    So, GO, Mr. President!

    And let Little Lord Flaunt-it-a-lot argue for keeping those tax cuts for himself, his family, his cronies, and the “Have Most” and “Want It All” contributors to his campaign.

  3. How can people even listen to the Rove and R-money lie machines? The level of credulousness must be amazing.

  4. I had to laugh when mitt claimed this will kill jobs. I think, and correct me if I am wrong , these tax cuts have been in place for at least the past 8 years and the “job creation” is a joke. Ok perhaps the extreme rich will have to cut back to 6 servants per home instead of the 8 they have now. Pity.

    Don’t be fooled by this crap. A tax increase on the rich would equal MORE jobs not less. Let me explain “rich “people to you. They are NOT going to work themselves. They are not going to lose money either. IF they cannot find a loop hole out of paying more in taxes they are going to make up that income they pay out somewhere..you can bet your cute little buns on it.So where? Less “workers” mean less production- they can’t have that. So they will hire a new person to increase their profits. If they hire someone, for say 10.00 a hour they are planning to make 50.00 off of them. Rich people live by the idea of letting their money work for them not them working for money and they see labor (not people – labor) as just another thing to make money from.
    I do cleaning work and I do billing for a small local plumber( named joe strangely enough). In my cleaning job a company will go bid a job for thousands a month and pay workers min wage and expect them to use their own supplies. The worker , who keeps the account may earn 150.00 per week. On the plumbing side I see the same thing. Workers make a bit more but the job is harder, still the owner makes HUGE profits to sit in a air conditioned Lexus and watch his workers rake in the cash for him. He does not make 250k a year but I can promise you that if the taxes were going increase in his tax bracket he would hustle up more jobs and hire another worker to pay it for him.He aint gettin out of that car with heated/ air conditioned seats to pay for it himself. He doesn’t do more or hire more workers now because he doesn’t have to – he is comfortable. IF his taxes were to increase tomorrow he would stop turning away jobs and hire more people.By the way this same person also built his own home but he doesn’t pay for it. He also owns rentals. The rent may be 750.00 a month and IF he still has a payment it is around 150.00 a month.He has several and paid for his Home, property taxes and insurance with the proceeds . If he had to pay more taxes he would buy another home and let the tenants pay for it.(they also fund his harleys, his classic cars, ect.)He made about 220k clear last year, but he is not spending it. The attitude is the same only worse the higher up the income bracket you go, at least as far as I have seen.
    As for the political risk- I think this one is worth fighting. I like a guy who knows when to pick his battles.

  5. If the government uses fiscal policy to build more bridges, schools, etc. it would stimulate the economy. If, instead of borrowing the money from the rich by selling government bonds we take it from them through a higher tax rate the government would still end up with more money to spend — the only difference to the economy would be that we would not increase the debt nor owe bond holders any interest. Right now there are trillions of dollars sitting idle in banks. The government should do something constructive with it.

  6. I’d like to see the President point out that Rmoney is seeking to serve the Bush constuency of the “haves and have-mores.” Let GWB become Mitten’s albatross.

  7. I loved Nancy Pelosi’s answer last Sunday, I think, to the ‘where are the jobs’ question. She said ‘ask the job creators’. Pithy and great.
    Also on the tax cuts on the first $250,000 income; it is not gross income, it’s taxable right?? And it is EARNED not capital gains or dividends which stay at the rediculous 15%. We really are talking top 1% here!! It frosts my back side that investments aren’t taxed like LABOR, not even paying our wonderful FLAT TAX i.e. social security. We need tax reform but NOT by the ‘have it all’s’. The gods help us.
    E

  8. I’m getting really tired of this claim that a slight tax increase on income above $250,000 will hurt small business owners. I can’t say I know enough small business owners to constitute a representative sampling, but none of the ones I do know make anything close to $250,000 a year. And even if a small business owner is making, say, $350,000, we’re talking about a 3% increase on the amount above 250K, for a grand whopping total of $3,000. So overall their tax burden has increased less than 1%. That’s going to wreck the business?

    And what’s the government going to do with the extra money anyway? They’re going to spend it! Which means more money will be in the economy, and hence in people’s pockets, which means some of these small business owners might be interrupted by new customers before they’re able to shoot themselves in despair over this less than 1% tax increase. Will Obama never stop oppressing them?

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