We just went through a presidential election where the Republicans demonstrated an unhealthy obsession with cutting the marginal income tax rates of the job creator, high earners who “built that” in the top two percent of the income distribution. We also caught a glimpse of the Republican presidential nominee showing extravagant contempt for the forty-seven percent of the income tax distribution who have no net income tax liability. You would have thought that the Republicans had hit a low and, having learned their lesson, would seek to craft a message and issue agenda that was more attractive to middle-class and working-class voters. Some Republicans are working for that, but some are actively trying to make things worse.
Marc Thiessen for instance. He argues that the US should go over the fiscal cliff and allow middle-class taxes to rise. Thiessen writes:
Dont get me wrong: It would be better not to raise taxes on anyone, pursue pro-growth tax reform and cut the size of government instead. But thats not what the American people voted to do last month. Americans cast their ballots for big government.
Now its time to pay for it.
Now this statement is wrong in one very obvious way. Its division of political labor is disastrously counterproductive. It should (and if the Republicans were thinking rationally would) be Obama’s job to propose Obama-level taxation to fund Obama-sized government. It should be the job of the Republicans to propose Republican-level taxation to fund Republican-sized government (whatever that size might be.) Having the Republicans proposing middle-class tax increases to fund Obama-level spending converts the Republicans from an opposition and alternative into the “tax collector for the welfare state.”
But that’s not what is most wrong with Thiessen’s position. Imagine if Obama came out for extending the current tax rates on high earners. Would most Republicans continue to insist on going over the fiscal cliff if there wasn’t an agreement on cutting spending by X amount? Some Republicans might insist on broad tax increases in the absence of big spending cuts (Thiessen might even be one of them), but I suspect most Republicans would vote to pass the tax cut extensions and deal with the spending next year. The standoff would be over.
So the real argument isn’t about how we should cut spending or else allow taxes to rise. It is about what we should do with middle-class tax rates if high earner tax rates are set to rise. The Republicans can’t block a high earner tax increase, but they can produce a middle-class tax increase to go along with it. In practice the Republicans are saying “You know what middle-class? We can’t stop tax increases on all of the high earners, but we can take you down with the noble job creators who built that. This is us teaching you a lesson. Vote Republican.”
I don’t think the lesson the public learns would be the one Thiessen and the rest of the “make them pay” Republicans think they are teaching. The more likely lesson would be that the Republicans have extended their contempt for the forty-seven percent to a further fifty-one percent and all in the interest of the two percent. And the Republicans wouldn’t even be helping the two percent out at all. The tax rates of high earners would be the same with or without an extension of the middle-class tax rates. From the perspective of the middle-class taxpayer, having the defeated party raise middle-class tax rates to go along with high earner tax increases looks less like responsible government and more like:
for hate’s sake I spit my last breath at thee.