One of the signature issues of this movement is, I'm told, taxes. CBS news yesterday had an informative piece, "What's Obama Doing to Your Taxes". Nearly 64% of tea partiers, it says, believe that Obama has already raised their taxes, and they appear to be very, very angry at him for this. Well, what is the reality? According to the Associated Press:
For these reasons, the Tax Policy Center notes that taxes are the lowest they've been in 60 years -- yes, lower than during the Reagan and Bush eras. So, right away, we notice that 64% of the Tea Partiers have no idea what they are talking about with respect to their signature issue. Obama and the Democrats have cut taxes drastically in the middle of a recession, which is exactly what needs to be done.Congress cut individuals' federal taxes for this year by about $173 billion shortly after President Barack Obama took office, dwarfing the $28.6 billion in increases by states. [...] The massive economic recovery package enacted last year included about $300 billion in tax cuts over 10 years. About $232 billion was in cuts for individuals, nearly all in the first two years. The most generous was Obama's Making Work Pay credit, which gives individuals up to $400 and couples up to $800 for 2009 and 2010. The $1,000 child tax credit was expanded to more families, and the working poor can qualify for as much as $5,657 from the Earned Income Tax Credit.
Perhaps the real worry is future taxes? Obama does propose letting the Bush tax cuts expire for higher income Americans. This will mean: (1) raising the top two income tax brackets from 33 percent to 36 percent, and from 35 percent 39.6 percent, (2) raising the capital gains tax rate from 15 percent to 20 percent for married filers with incomes above $250,00, (3) raising the tax on dividend income from 15 percent to 20 percent for married filers with incomes above $250,000. These are the same tax rates that were in effect under the Clinton administration, and are still quite low, historically speaking. These taxes will impact roughly 2-3% of the population. As long as the country is coming out of the recession at that point, this seems very reasonable and hardly grounds for wild charges of communism.
Another big worry of the tea partiers is government spending. They are worried that Obama is spending a lot of government money and are very, very angry at him for this. They are correct, of course, that there is cause for concern about long term deficits. What is interesting, though, about the tea partiers is that 57% of them approve of George W. Bush. This is the same Bush who waged two wars and passed a massive new government entitlement (Medicare Part D), all on the government credit card. There wasn't even the slightest effort to pay for these spending programs (Karl Rove famously claimed "Reagan proved deficits don't matter"), and yet, the Tea Party Patriots still largely approve of Bush. Obama is the great villain for them when it comes to spending, ignoring the fact that he just passed one of the largest long term deficit reduction measures ever enacted (health care reform, which they fought strongly against), the fact that his 2010 budget actually reduces the long-term deficit from earlier projections, and the fact that one should simply not cut short-term spending during periods of recession and high unemployment.
Makes me wonder if there is something else behind tea-party hatred than actual taxation and spending policies. Their rhetoric does not match anything close to reality. Confusion mixed with anger is a dangerous cocktail. A Molotov cocktail.
[My own view on taxes, if anyone cares, is that they will need to go up once we are back to around 6% unemployement, and they will probably need to go up for the middle class. Common sense reform of entitlements will be necessary (raising retirement age), along with cuts to the defense budget and things like agricultural subsidies.]
4 comments:
In 2006 (I think it was anyway), I saw a debate between Rod Paige and Tom Daschel at Miami University. During the debate, Paige thought he would be able to rally the crowd behind his view that NCLB was sufficiently funded when he shouted something like, "who here would want to pay more taxes just to fund schools?" He assumed everyone would be on board with him. Boy was he surprised when people starting shouting from the stands, "I will" and "me!" In the conservative environment of Miami I was shocked and so was Paige. I began to realize that some conservatives are just always against taxes, no matter what they pay for, while others are willing to raise taxes for certain things, which might include schools and the military. It's certainly not consistent and it certainly is not always well informed.
Hey Bryan, I'm assuming you like someone to play devil's advocate and it doesn't seem like you have too many that disagree with you...so you're welcome. :)
If a pollster asked me whether or not Obama has raised taxes or not, I would be tempted to say yes. Saying Obama hasn't raised taxes is technically true but it's like my wife racking up a huge credit card bill and then telling me that I don't have to get a second job. Sure I don't have a second job right now, but I will in the very near future. Someone will have to pay for all this spending, and that will certainly involve higher taxes for everyone.
You said that the new taxes will "impact roughly 2-3% of the population". That isn't true, sure they will only directly affect the top 2-3% but everyone will feel the effects. I was just talking to a small business owner that employs 5-12 people at any given time and makes between $200-350k/yr. He says he has little motivation as it is already to make more than $250k because the extra time and effort to make more isn't worth how little of that money he receives (because of taxes). Those taxes aren't hurting him, they hurt his employees and potential employees. The less he works, the less staff he needs. Higher taxes on the rich equate to lower paid employees and higher unemployment.
I agree with you that many of the Tea Party members may be uneducated (the media has done a great job of portraying that), but it's not like there aren't uneducated liberals. I come to their defense only because what scares them, scares me too: bigger government.
Kyle
Sarah, I think it would sometimes work better politically if a tax increase always came with a specific purpose. It is one thing to raise taxes, it is another to raise taxes to specifically benefit schools, the elderly, etc. Tax increases on the ballot here in Columbus that are slotted for specific purposes (parks, child services, etc.) usually always pass.
Kyle, your small business owner doesn't seem to have a very good sense of is own economic interest. Suppose he could make $10,000 more through working hard and expanding his company. Each dollar of that $10,000 after $250,000 will now be taxed at a 39% rate instead of a 36% rate. If my math is right, that will amount to paying $300 more (from $3600 in taxes to $3900 in taxes). So, he is really willing to turn down $10,000 dollars because he has to pay $300 more in taxes? I doubt he is really that dumb.
There is a point, perhaps, at which taxes serve as a disincentive to work (the so-called Laffer curve), but research shows we are no where near that right now.
I agree with you that higher taxes are coming in the future. But that is more due to an aging population than anything Obama (or even Bush) has done. Republicans railing against even modest cuts to Medicare during the recent health care debates certainly haven't helped.
The business owner wasn't referring to Obama's proposed tax hike, but the increase in taxes he already pays when he hits the $250k mark. My point was only that when taxes increase on the rich, that effect will increase as well and that not only the rich get affected.
You name one of many things (Medicare) Republicans have fought to keep spending money on this past decade. They are quick to toot there horn during elections on fiscal conservatism, but very few vote that way.
Kudos to Obama for cutting our space program, I say if people want NASA so bad then it should survive on voluntary donations alone.
Kyle
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