Taxes on the chessboard

Let’s not kid ourselves. The odds of Congress speedily agreeing to President Obama’s call for an end to the top-bracket tax cuts are roughly equivalent to the odds of Katie Holmes riding into the sunset with Tom Cruise.Obama’s pitch yesterday to end the Bush tax cuts for the rich – to let the cuts expire on schedule at the close of 2012, thus forcing the top two percent of Americans to pay the non-burdensome tax rate they faced in the Clinton era – happens to be sound economic policy. Ending the tax cuts for the rich would slash the deficit by a projected $829 billion over 10 years, and help fund programs to stoke the economy. Extending the tax cuts for middle-income folks (those making less than $250,000 a year) would protect their consumer spending. But we all know that Obama didn’t take his stand yesterday for policy reasons. He did it for political reasons – to expose the Republicans for what they are (knee-jerk obstructionists), and to expose Mitt Romney for who he is (a rich guy whose top priority is to protect the tax perks of the rich).Obama said yesterday, “We should all agree to extend the tax cuts for the middle class. Let’s agree to do what we agree on. Right? That’s what compromise is all about. Let’s not hold the vast majority of Americans and our entire economy hostage while we debate the merits of another tax cut for the wealthy.” But he knows, of course, that compromise is impossible during the run up to November, and that there is no way the congressional Republicans will ever agree to protect the middle class unless they can service their rich clientele.Is Obama trying to set them up? Absolutely. Is this a baldly political tactic? Duh.

He’s banking that the Republicans will stay in character (they already are) so that he can run against their character, much the way Harry Truman successfully inveighed in 1948 against “the do-nothing Congress.” It’s strictly a chessboard move, an election season bid by Obama to woo middle-class voters (and perhaps even white working-class voters) at the GOP’s expense – and at Romney’s expense, because the presumptive nominee is predictably opposed to seeing his rich brethren pay more taxes.Indeed, Ronney wants them to pay even less. Romney’s tax plan (one of his areas of specificity) actually envisions new tax breaks for those in his rarefied class. There is scant support in the polls for that kind of policymaking; by contrast, there has long been consistent majority support for extending the Bush middle-class tax cuts and ending the top-bracket cuts. In April, for instance, Gallup reported that 62 percent of Americans wanted the rich to pay more. And in a new poll conducted for the nonpartisan National Journal, 60 percent say it’s “very important” to extend tax cuts for those earning less than $250,000, while only 40 percent want to extend them to all taxpayers.Obama’s obvious aim is to paint Romney not just as a wholly-owned subsidiary of the two percent, but as an elitist who has a vested financial interest in protecting his own tax breaks. Romney and the GOP will naturally fight back by concocting phony arguments – like their warmed-over line about how the expiration of top-bracket tax cuts will supposedly hurt “small business” and hamper “small business” hiring. The Treasury Department has already trashed that one, concluding in a recent analysis that only 2.5 percent of small business owners earn more than $250,000 a year.But empirical economic facts don’t matter in these disputes. The GOP will continue to push the notion that multimillionaires are the same folks who ring the register at your local hardware store and auto body shop. And Romney will continue to insist that Obama, saddled with an 8.2 percent jobless rate, is merely trying to change the subject. And so goes the talk between now and November. It will be all talk, and no legislative action.Actually, Obama is not trying to change the subject; he knows that, as subjects go, the jobless rate is not changeable. Rather, he is attempting to broaden the range of subjects. Economic fairness is a worthy addition to the dialogue – as policy, and as politics.——-Follow me on Twitter, @dickpolman1