Meanwhile, Dems start caving
New SEIU-backed polling in key swing states shows that 62 percent of voters back the Obama agenda on tax cuts: ending the cuts for the wealthy who earn more than $250,000 a year and extending them for the middle class.
But the political reality is that deceptive GOP messaging is working: the argument Republican leaders make that letting special tax cuts for the wealthy expire hurts “small businesses” and kills jobs seems to be frightening Democrats in the House and Senate to avoid casting a vote before Election Day.
Yet as Greg Sargent of the Washington Post’s Plum Line blog points out: “If this new poll conducted for the labor powerhouse SEIU doesn’t persuade Dems to hold a vote on extending the middle class tax cuts, then nothing will.” Indeed, in the both House and Senate, moderate Democrats sent signals this week they’d rather run for the hills — and away from taxing the rich along with the rest of the Obama agenda — rather than fighting the GOP on the issue of tax cuts for the rich.
As Sargent reports, “A number of ‘moderate’ House Dems have privately given Nancy Pelosi and other Dem leaders an earful in recent days, urging them not to hold a vote on whether to extend just the middle class tax cuts and not the high end ones, because it will leave them vulnerable to Republican ads, sources involved in the discussions tell me.”
Centrist Senators are also eager to avoid a vote, unwilling to force a showdown that could paint the GOP into a corner of either being for or against extending tax cuts for the wealthy. As CNN reported Wednesday:
With Democrats divided on tax cuts, a Senate vote before the election on extending Bush-era tax cuts for the middle class is looking less likely, multiple Senate Democratic sources tell CNN.
These sources all stress that no final decision has been made, and that Senate Democrats could come to a different conclusion after discussing the issue at a meeting Thursday afternoon.
Still, one senior Democratic senator told CNN that a tax cut bill “isn’t going anywhere at this point.” The senator spoke on condition of anonymity in order to talk about internal deliberations.
Sen. Tom Harkin, D‑Iowa, however, did speak freely, telling CNN, “I think it’s headed to after the election.”
Will lame-duck legislators have the courage to take that vote then and ensure that tax cuts for the rich don’t blow at $760 billion hole in the federal budget? Don’t count on it.
All this comes at a time when progressive critics, from MSNBC’s Keith Olberman to Nobel Prize-winning economist Paul Krugman, are eviscerating the shake-down politics and con artistry of the GOP in pushing for the extension of all of the Bush tax cuts. On Olberman’s show, in a rare use of broadcasting to do economic-driven investigative reporting, he revealed [see video] that the “small businesses” the GOP are championing actually include multi-billion dollar businesses that are registered with the IRS under a technical loophole. It allows their owners to avoid any corporate taxes and just pay taxes on their individual returns.
As MSNBC summed up:
When it comes to discussing tax cuts, the term “small business” is an “utter misnomer,” Keith Olbermann said in a special report Wednesday night.
Olbermann, on his MSNBC TV show “Countdown with Keith Olbermann,” named firms considered small businesses for tax purposes but have millions in income and are run by multimillionaires.
Among them are the “biggest companies in the world and the richest people in this country,” Olbermann said on a segment titled, “Small Business in Name Only.”
Because IRS tax returns are not public record, the names of companies were ascertained from public documents such as court records or the companies’ postings:
Among his examples:
Koch Industries [owned by the billionaire brothers funding the Tea Party movement], a conglomerate of partnerships with 70,000 employees.
- Enterprise Products Partners, L.P., a pipeline company with 2009 revenues of $25 billion.
- Kohlberg Kravis Roberts & Co., a Wall Street firm with $445 million in revenue in 2009.
- Price Waterhouse Coopers, an accounting firm with $26 billion in revenue in 2009.
Yet Olberman’s show underscored that Republicans accidentally gave away the shell game of conflating rich owners with true small businesses, when Minority Leader John Boehner conceded that the tiny sliver of owners affected by the tax changes earn half the income of the so-called “small businesses.”:
On CBS’ Face The Nation Sept. 12, Rep. John Boehner, R‑Ohio, conceded that a nonpartisan Joint Committee on Taxation found that 3 percent of small-business people would be impacted if Bush tax cuts for the rich would expire.
“Well, it may be 3 percent, but it’s half of small business income,” House minority leader told Bob Schieffer. “Because, obviously, the top 3 percent have half of the gross income for those companies that we would term small businesses. And this is why you don’t want to punish these people at a time when you have a weak economy.”
Fewer than 750,000 people, less than 0.25 percent of the country, would be affected by the top rate, according to Joint Committee on Taxation figures quoted by Olbermann.
The real problem facing Democrats on what should be a slam-dunk case is that the GOP seems quite willing to let ALL the tax cuts expire. That would force middle-class families to pay a lot more in taxes during a time of high unemployment, starting next year. It’s a game of “chicken” and extortion that GOP leaders don’t mind playing, the cost to the economy or middle-class families be damned. In a recent column, Paul Krugman summed up the political gamesmanship underway:
“Nice middle class you got here,” said Mitch McConnell, the Senate minority leader. “It would be a shame if something happened to it.”
O.K., he didn’t actually say that. But he might as well have, because that’s what the current confrontation over taxes amounts to. Mr. McConnell, who was self-righteously denouncing the budget deficit just the other day, now wants to blow that deficit up with big tax cuts for the rich. But he doesn’t have the votes. So he’s trying to get what he wants by pointing a gun at the heads of middle-class families, threatening to force a jump in their taxes unless he gets paid off with hugely expensive tax breaks for the wealthy.
That’s why the polling, conducted by Greenberg Quinlan Rosner for SEIU, is so important in potentially giving Democrats the backbone to stand up to Republicans and fight to end tax breaks for the rich. As SEIU President Mary Kay Henry said about the results:
We need to make this a more fair economy, and that means no more Bush-era tax giveaways to the rich. If we are going to get this country on the right track, we need to create good jobs and put more money in people’s pockets. This poll shows that Americans of all stripes agree that working families and small businesses need and deserve a tax cut.
So, as Steve Benen of the Washington Monthly asks, reasonably enough:
Why not take the step that’s better public policy and politically smart? Why not focus pre-election energies into cutting taxes for the middle class?
Indeed, why not make a really big deal about the fact that Democrats are fighting to pass middle-class tax cuts and have had to fight Republicans tooth and nail to make it happen?
But too many Democrats aren’t listening, and they’re not willing to make the case for any part of President Obama’s agenda, including ending tax cuts for the wealthy. As a result, they will be facing a new round of GOP attacks designed to fool voters, slash government services and oversight, and bail out the rich, based on Thursday’s scheduled release of a Gingrich-style “Pledge to America.” As Politico reported:
House Republicans are set to release on Thursday a “Pledge to America,” an ambitious and sweeping set of proposed changes to domestic and security policy, including promises to freeze most federal government hiring, cut Congress’ budget, place hard caps on domestic spending accounts, prevent the phase-out of tax cuts that are set to expire in 2011 and “repeal and replace” the new health care law.
Many of the reforms envisioned by House Republicans are highly unlikely ever to become law, but others foreshadow tough fights with President Barack Obama’s administration over spending, taxation and national security policy if Republicans win control of the House in November’s mid-term election.
Unfortunately, running away from a populist fight over taxing the rich isn’t likely to help the Democrats chances in November.