President Barack Obama Gives Wealthiest Undeserved Tax Cut
The extension of Bush-era tax cuts to the wealthiest among us isn’t just indefensible—it shows a president without a stomach for a fight, argues Kirsten Powers.
A few weeks ago, a friend who works for a major Wall Street bank relayed a telling story about bumping into a couple of colleagues. One of the bankers asked the other, “How’s your Lamborghini?” His friend’s response: “Which one? I have three.”
Now that the GOP succeeded in getting the Bush-era tax cuts extended for the wealthiest among us, these bankers have extra reason to celebrate this holiday season. As the debate over tax cuts showed, the Republican leadership is on the side of Lamborghini man. Which leaves the question—on whose side is President Obama?
The conservative Democratic Senator Mary Landrieu of Louisiana has dubbed the tax cuts as the “Obama-McConnell Plan” and described it as “ almost morally corrupt.” But that’s generous. The plan is not “almost morally corrupt” but absolutely morally corrupt, no matter what the president said at the hastily called press conference yesterday.
During this press conference, Obama added insult to injury by deriding his base as “sanctimonious” for their principles. He also swore to resume the fight over tax cuts for the wealthy in another two years, making one wonder—why would he promise to fight something two years from now, when he has even less leverage and power?
As for that “sanctimonious” base, exit polls from the midterms showed a majority of Americans opposing an extension of the Bush tax cuts for the wealthiest Americans, but supporting extension for those making less than $250,000. And this was not a liberal electorate; far more Republicans showed up to vote than Democrats. Subsequent polls have shown similar results—Americans actually support the Democratic position on the Bush tax cuts. Yet Obama caved with nary a fight.
Not only was this decision substantively wrong; it was pure political malpractice. Tax cuts for the top earners add to the already out-of-control deficit, making it fiscally irresponsible as well as morally suspect.
The same people who screamed bloody murder over the Obama health-care plan—which the Congressional Budget Office found would decrease the deficit over the long run—were aggressively pushing to add $4 trillion to the deficit over the next decade by making the tax cuts to the wealthy permanent. And guess which countries we will be borrowing more money from to finance these irresponsible tax cuts? China and Russia, among others.
For those following the debate, a good drinking game would have been to take a drink every time a Republican claimed we had to extend the top earner tax cuts “for small businesses.” This is complete and utter bunk, and the Republicans know it. Only 3 percent of the top earners are small businesses.
Another GOP trope was the claim that the top earners won’t invest in creating jobs, if their taxes go back to Clinton-era levels, which is what would happen if the tax cuts expire. This is an argument that essentially casts the 1990s, a decade of unprecedented economic growth, as an era of oppressive taxes—a truly stunning misrepresentation of what happened. Top earners had no problem investing in the economy in the 1990s at the exact same tax rates the Obama plan would have taken them to.
Not only was this decision substantively wrong; it was pure political malpractice.
Finally, the Republicans argued that, “You never raise taxes in a recession.” But we aren’t in a recession. We are in a recovery. And the reality is, there is no situation where Republicans think taxes should go up for rich people—despite their lip service to controlling the deficit.
Obama should have called the GOP on their manipulative rhetoric because there was only one appropriate response to the Republican position: Call their bluff.
Instead he caved. And when pressed by a reporter at yesterday’s news conference about concerns that he hadn’t drawn a line in the sand on the tax cuts, he replied without irony, “I’ve got a whole bunch of lines in the sand.”
Yes, that’s precisely the problem.
Kirsten Powers is a columnist for The Daily Beast. She is also a political analyst on Fox News and a writer for the New York Post. She served in the Clinton Administration from 1993-1998 and has worked in New York state and city politics. Her writing has been published in the Wall Street Journal, USA Today, the New York Observer, Salon.com, Elle magazine and American Prospect online.