President Obama is already out clarifying his agenda to the American people. Raise the taxes on the rich, make them pay their fair share, and we will make a positive move toward solving the deficit problem. For a man who is on record saying he wouldn’t raise taxes in a recession and who resisted his party in continuing the so-called Bush tax cuts, this latest rhetoric can only mean one thing.
It’s campaign season.
But it may not be what you think. Most think Obama is trying to court the middle class for the 2012 vote. I submit to you that he is trying to court his base back to his side as he draws nearer to next November.
Obama’s base has been extremely frustrated with his administration with issues ranging from Guantanamo Bay to extending Bush tax cuts. But now New York and Nevada elections foreshadow a possibility for a Republican, filibuster proof majority in the Senate. Add to that calls for an open democratic primary and a James Carville op-ed that called for the White House to “panic” and you’ve got an administration on a mission.
And that mission is taxing the rich. When the facts and figures are lined up, it’s at least debatable whether doing so would help solve the deficit problem. Furthermore, history has shown that raising the capital gains rate results in less revenue, however counterintuitive that may seen. That’s part of the reason President Clinton lowered the rates in order to balance the budget during his term. So the issue isn’t really economic. It’s political.
And that’s how you know that Obama is in trouble for 2012. He’s starting his campaign as if he’s in a primary—a primary against himself. True, there is no likelihood of Obama facing a challenger, though whispers of “Hillary” surround him. No, Obama has to find a way to channel 2008 Obama, as those who were bright eyed and eager to vote for him in 2008 question doing so next time.
That doesn’t mean his opponents will have an easy ride to victory in 2012. When it comes to fair share, their hope is to define the issue by saying that the rich do pay their fair share and that raising taxes on the rich will be detrimental to the economy and job creation. We might even all be able to deliver their speeches for them at this point as they beat them into our heads, over and over.
While an Associated Press fact check article did show that American’s making over $1 million are paying an average of 29.1 percent in federal taxes, the other arguments are getting stale.
Many small business entrepreneurs are saying certain taxes they’d have to deal with once they get to a profit-making point are the last things they are looking at when deciding to make the plunge. Additionally, the federal health care mandate has more people struggling over hiring decisions than do taxes. Furthermore, investors are less inclined to look at tax rates when deciding on a portfolio. They’re focused on the business (front) end of the investment, not the tax end. That means the Republican idea of taxes hurting the small business is also at least questionable, and they haven’t yet made the argument believable to the American people.
The uncertainty of the economy is probably the biggest problem for job creation and investment. Republicans need to redefine themselves, going from “defenders of the rich” to “master job creators.” A move that is less and less likely as things heat up once again in Congress and as that November date in 2012 looms ever closer. Even though we’re likely to see no legislation on the issue of fair share, neither side is being successful at convincing voters with their class warfare arguments. So they will continue. Whichever side can both clarify and convince the American people of their point of view will win the election. And then the really tough work will begin. Proving they were right.