Thursday, September 22, 2011

Oy, Bai

Greg Sargent has a great item today beating up on Matt Bai, who believes that Barack Obama is making a risky move by backing tax increases for rich folks because Walter Mondale lost in 1984, or something like that.

Greg makes the excellent point that Obama ran on exactly this issue back in 2008 and seemed to do okay, really. What I'll add is that whatever Bai believes about "historical narratives left over from the 20th century," it's also the case that Bill Clinton in ran on higher taxes for rich people (and a middle class tax cut) back in 1992, and once again seemed to survive it somehow. Here's the deficit paragraph from the 1992 platform, which shouldn't seem entirely unfamiliar:
Addressing the deficit requires fair and shared sacrifice of all Americans for the common good. In 12 Republican years a national debt that took 200 years to accumulate has been quadrupled. Rising interest on that debt now swallows one tax dollar in seven. In place of the Republican supply-side disaster, the Democratic investment, economic conversion and growth strategy will generate more revenues from a growing economy. We must also tackle spending, by putting everything on the table; eliminate nonproductive programs; achieve defense savings; reform entitlement programs to control soaring health care costs; cut federal administrative costs by 3 percent annually for four years; limit increases in the "present budget" to the rate of growth in the average American's paycheck; apply a strict "pay as you go" rule to new non-investment spending; and make the rich pay their fair share in taxes. These choices will be made while protecting senior citizens and without further victimizing the poor. This deficit reduction effort will encourage private savings, eliminate the budget deficit over time, and permit fiscal policies that can restore America's economic health.
I'll also agree with Greg's caveat...it's quite possible that the polling that shows tax increases on the rich isn't predictive. And I'll add that it's also certainly possible that Clinton in 1992 and Obama in 2008 would have won by even more had they only changed that particular plank. But then again one could certainly argue -- and back it up with some evidence -- that Republicans have as much of a continuing problem of being seen as the party of the rich as Democrats have with being the party of higher taxes.

The other half of this is that when we're talking budget, there are always trade-offs. Especially for politicians who have already been elected and have to submit their plans to CBO. Even if it's true that there are risks for Obama in advocating tax increases for the wealthy, if he did not do that he'd have to be behind steeper cuts to (very possibly) popular programs, or higher taxes on middle-class people, or larger deficits. Each of which, presumably, has risks as well.

10 comments:

  1. I think the real risk in Obama's position is not a backlash from voters but rather the inevitable backlash from the business community, which may prove more consequential than the advantages he gains from rallying up the liberal base and giving his campaign a populist aura. I'm not sure he has much of a choice, however.

    Besides, I suspect the polls on this issue reflect nothing more than the fact that most Americans aren't rich. Thus, they probably care more about what an economic policy will directly do for them than what it does for the minority of wealthy Americans. That's one of the reasons the deal Obama made with Republicans extending the Bush tax cuts was popular.

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  2. One of the most useful pieces of advice that I've ever received: "Never use 'fair' and 'tax' in the same sentence."

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  3. These are interesting data points because it really does show that there's no hope of getting mainstream news media outlets, even relatively liberal ones like the NY Times, to abandon their ingrained "centrist" ideological reflexes.

    It seems like a small part of the reason the Obama administration and some Democratic Congressmen have delayed so long in using populist language and calling out the Republican Party is that they had the vain hope that major news outlets would eventually give them credit in their reporting for making such strenuous efforts. If they made it excruciatingly clear, they'd be able to shift news media preconceptions and well-worn reflexes, the theory seemed to be, and they get relatively more realistic and favorable coverage. But no dice. Even after everything Bai has seen over the summer, he has to find some way to see current Democratic tactics as risky and uncalled for.

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  4. Kylopod, I suspect many in the business community think higher taxes on the wealthy will benefit the country. Warren Buffet is merely one of the more famous examples.

    As for Obama's tax deal with Republicans being "popular," I suspect that had more to do with relief that a threatening shutdown was averted, rather than the deal's actual content.Kylopod, I suspect many in the business community think higher taxes on the wealthy will benefit the country. Warren Buffet is merely one of the more famous examples.

    As for Obama's tax deal with Republicans being "popular," I suspect that had more to do with relief that a threatening shutdown was averted, rather than the deal's actual content.

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  5. The problem I see is Obama will cave just to make a deal with the GOP and all his rhetoric will be lost to the ages...

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  6. Oy Bai indeed. Just strikes me as another replay of that old 90’s political fight of Clinton’s “New Democrat” agenda and liberals in the Party and Congress. Jon Chait wrote a piece about how Mark Penn consistently made the same type of argument (it’s class warfare!) in the past and still makes it today. Dick Morris made the same big argument to Clinton after the 94’ election and had to fight it out with liberals in the White House.
    http://nymag.com/daily/intel/2011/09/one_big_reason_not_to_wish_hil.html

    Largely I think it’s less important than Bai says. The GOP’s nominee will accuse Obama of raising taxes or secretly plotting to do it on everyone no matter what. Guess what Matt? Republicans didn’t exactly fall over themselves to praise the tax cuts in the stimulus etc. So why not define where you stand and not let Perry or Romney do it for you?

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  7. >I suspect many in the business community think higher taxes on the wealthy will benefit the country. Warren Buffet is merely one of the more famous examples.

    Unfortunately, I suspect Buffet is more the exception than the rule, and there are polls to back up my intuition.

    >As for Obama's tax deal with Republicans being "popular," I suspect that had more to do with relief that a threatening shutdown was averted, rather than the deal's actual content.

    The tax deal was not to avert a shutdown, but to avert an across-the-board tax increase.

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  8. I thought the tax deal in late 2010 was done in exchange for other things Democrats wanted, including continued stimulus/support in terms of unemployment insurance and payroll tax cuts and the ability to vote and pass measures on which the GOP was running out the clock (Russian arms control, DADT repeal). Each of those things satisfied various constituencies and keeping the Bush tax cuts merely felt like maintaining the status quo (even though technically the status quo included a scheduled phase out).

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  9. A couple of points. As far as comparing the situation to Mondale, it's worth recalling what Mondale actually said: http://www.youtube.com/watch?v=07m39CQRJXw

    In his convention speech, he did not single out the wealthy. And most people recall the emphasis on deficits and taxes, but not much about higher taxes on upper income families.

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  10. >Each of those things satisfied various constituencies and keeping the Bush tax cuts merely felt like maintaining the status quo

    Exactly. But the important point is that most people seemed not all that upset about the tax cuts being extended. That supports Kevin Drum's argument that just because Americans overwhelmingly favor increasing taxes on the rich doesn't mean they feel that strongly about it. Very likely they care more about their own financial situation. As a matter of principle they would like the rich to pay more, which they believe will benefit them in the long run, but if they're offered policies that immediately benefit them in exchange for keeping the rich's tax rates the same, they'll take the deal in a heartbeat.

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