The Right Opinion

A Victory for Demagoguery

By Mona Charen · Dec. 11, 2012

I'm in the camp that believes Republicans have no choice but to agree to raise taxes on the top 2 percent of earners. The party has been successfully caricatured as the servant of the rich. This is unjust, yes, but justice is imperfect in this life. It's political suicide for Republicans to stand fast on maintaining current rates for high earners even at the cost of raising taxes for everyone else. Imagine if we went over the fiscal cliff. In January, Obama would call upon Congress to pass a law restoring the tax rates for 98 percent of filers. What could Republicans do then, refuse?

There is a time for strategic retreat. Republicans are not without tactical opportunities, though. They can reply, as my friend Michael Medved has suggested, that if the Clinton tax rates are desirable, so are the Clinton spending rates. They could resurrect a budget from 1998 and pass it. Democrats would protest that 1998 spending rates are not remotely commensurate with our needs. But wait, don't they argue that the Clinton years were economic utopia? Were people living in cardboard boxes on the streets in the 1990s? While they're at it, they could propose Clinton levels of regulation, too.

Alternatively, they could pass the Simpson/Bowles proposal, reminding voters that the president ignored his own debt commission. Simpson/Bowles has many flaws (including too few spending reductions), but it does at least make big strides toward taming the debt. Endorsing it would show that Republicans are prepared for painful compromise in the name of getting our house in order. The president talks of a “balanced approach” to deficit reduction – by which he seems to mean more taxes and more spending. His former chairman of the Joint Chiefs of Staff has fingered national debt as the “greatest national security threat” we face. Yet the president has yet to make a genuine proposal to cut spending.

Republicans must bow to political reality about tax rates, but it's worth a backward glance to consider just how great a victory this is for demagoguery.

Consider that the Democratic Party is now committed, body and soul, to defending “the middle class tax cuts.” They are the party of the middle class, they trill. Yet when these tax rates were enacted, every living Democrat denounced them as “tax cuts for the rich.” Every Democratic tongue swore that Bush had passed “tax cuts for the rich.” The Republicans piped in response: “No, they were tax cuts for everyone.” But they were drowned out. The libel stuck, and it persists even now as Democrats go to the mat for those Bush middle class tax rates.

Also, the Bush tax cuts made the tax code more, not less, progressive. More than 8 million taxpayers were relieved of paying taxes altogether because the Bush reforms doubled the child tax credit and expanded the Earned Income Tax Credit. That may have been a political miscalculation as it insulated more Americans from the cost of government. But it's certainly at odds with the conventional wisdom that Republicans didn't consider the needs of working Americans when they were in power.

As for the rich, yes, the rates went down. But the percent of the total tax burden shouldered by the top 1 percent of earners increased from 37 percent in 2000 to 40 percent in 2007. The bottom 50 percent of taxpayers paid 16 percent less in 2007 than they had in 2000. Their share of the total burden fell from 3.9 percent to 2.9 percent.

Mr. Obama has successfully deluded people into believing that the rich pay fewer taxes than their secretaries. In fact, as Steve Moore has shown, the top 5 percent of taxpayers earn 37 percent of national income but pay 61 percent of income taxes.

Democrats, especially this president, have scorned the Bush years for their accumulated debt and for raging inequality. Yet, as Professor Emmanuel Saez of Berkeley (yes Berkeley) has shown, the income gap during Obama's first term has been far more pronounced than it was during the Bush years. As Alexander Eichler of the Huffington Post put it, “The rising tide has lifted fewer boats during the Obama years – and the ones it's lifted have been mostly yachts.”

The demonization of the rich paid electoral dividends: Obama will get his way on tax rates. But the problem he conjured – the rich getting richer at the expense of everyone else – was a crude fiction. It's the kind of class warfare appeal that has worked all over the globe. We used to be an exception. No more.

COPYRIGHT 2012 CREATORS.COM

7 Comments

Ct-Tom in NC said:

The Republicans need to make what Kudlow has called a strategic retreat. Just give Obama everything he wants by voting "present" on all budgetary bills the Dems propose. That way, when the economy slows, jobs are lost and the debt builds, the Dems will own it. To the extent that the GOP extracts concessions from the Dems, those concessions, however reasonable, will be held to be the reasons for the inevitable disaster, and the Republicans blamed. Give 'em everything they want!

Sooner or later, there will be pain. Why has no one the guts to face the payback that must be made? We need to hunker down and pay our bills while not running up new ones. Dave Ramsey for President!

Tuesday, December 11, 2012 at 8:04 AM

Tapdaddy in Indiana said:

demagogue: a leader who makes use of popular prejudices and false claims and promises in order to gain power
Gee, who would that be?

Tuesday, December 11, 2012 at 10:25 AM

Wayne in Hinesville, GA said:

The RINO's are going to cave as usual and take the blame for whatever happens. They should do exactly what Ct-Tom says and just vote present on any bills that the Condum party come up with. Let them be responsible for the collaspe and hopefully the American people will wake up and realize you cannot spend your way out of debt.

Tuesday, December 11, 2012 at 10:41 AM

Capitalist Dad in Madison WI said:

Obama's insistence on soaking "the rich" has nothing to do with improving the economy, and everything to do with the Marxist, America-hating beliefs drilled into him by Mommy Dearest. He is physically and emotionally incapable of doing anything that lifts America. Levelers never level up! Everything he touches turns to cr#p! There are only two possible explanations: unimaginable incompetence or stupendous malevolence. In the sane and healthy America of 1776, our Founders would recognize Obama for the tyrant he is, and he would at least have been tarred, feathered, and ridden out of town on a rail -- if not committed to the woodchipper. Luckily for Barry and unfortunately for freedom-loving patriots, we don't live in such a country.

Tuesday, December 11, 2012 at 12:07 PM

Tod in Brooklyn, NY said:

The smelly rat party is one of malevolence/evil. It is blind, to its own destruction of liberty. Its mantra is "tax, spend, print, borrow, and the heck with tomorrow!"stealing the fruits of labor from others is wrong.John Maynard O'bama will be shown wrong-to the blind sheep, in due time! God give Patriots endurance to weather the storm of Demagoguery! LOL Mona.

Tuesday, December 11, 2012 at 5:43 PM

pete in CA said:

And I'm in the camp that says everybody, including the 47% or 49% or whatever the number is who pay zero taxes, should be paying taxes.

Make the lowest rate 5% of all income, including social security, unemployment, disability, alimony, welfare, and anything else. There is not a singel good reason nearly half of our population should be denied the right to "pay their fair share!"

Tuesday, December 11, 2012 at 6:24 PM

HP in Kalispell, MT replied:

AMEN!

Thursday, December 13, 2012 at 3:26 PM