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GOP Favors Tax Hike!


© Stuart Carlson

The GOP wants you to think that they are against raising taxes, so much that they claim that letting a tax cut expire counts as raising taxes (for example, in the case of the Bush tax cuts for the rich).

So why are the Republicans trying to stop Obama from extending the payroll tax cut? Didn’t virtually every Republican in Congress sign Grover Norquist’s pledge to not raise taxes? (As a side note, Norquist himself is curiously — and hypocritically — silent on this issue, even though he has repeatedly declared that letting tax cuts expire would violate the pledge.)

Interestingly, the Republicans don’t even feel any need to hide their hypocrisy. For example, Congressman Jeb Hensarling (R-TX) justified the move by saying “not all tax relief is created equal for the purposes of helping to get the economy moving again.” He’s implying that tax cuts for the rich will spur job creation more than tax cuts for the rest of us, but the evidence says otherwise. In fact, cutting the payroll tax has been declared by the CBO as one of the most effective ways for creating jobs, while cutting taxes for the rich is one of the least effective.

So are the Republicans purposely trying to keep unemployment high so they can blame it on Obama? The only other sensible explanation is that they are class warriors who claim they want to cut taxes, but really only want to give money to the rich (perhaps in return for campaign contributions), while taking money away from the poor and middle class (who tend to vote Democratic).

Of course, then there is the explanation that makes no sense at all — that the Republicans are against extending the payroll tax cut simply because Obama is for it. Opposing Obama trumps even their most sacred principles.


© Mike Luckovich

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12 Comments

  1. Jonah wrote:

    True democracy doesn’t appear to be working. I would say that the majority of Americans would favor a payroll tax cut. If that is the case why are a small number of republicans dictating the direction of our economy? Are people actually calling their representatives and making their voices heard?

    Also regarding the payroll tax cut, the fundamental flaw that the democrats are making is that are proposing a short term cut. If they were to make it valid for say 4 years, a longer term, it would likely have more effect on the economy since people will be more likely to spend the money they know they will be getting for several years. A short term increase is likely to lead to people saving the money and therefore is unlikely to benefit the overall economy.

    Sunday, August 28, 2011 at 5:43 am | Permalink
  2. JJOSPORT wrote:

    It comes down to the GOP knows the wealthy will vote for them, hence, they cannot allow the cuts to expire.
    The GOP also knows the middle class elected Obama, hence, letting their tax rate rise disproportionately to the wealthy works towards their ultimate goal: remove the sitting president.
    I think it is interesting to note that the GOP has shown much more vitrol at this sitting president than they’ve ever been in the history of this country although there have been many other democrats.

    Sunday, August 28, 2011 at 11:23 am | Permalink
  3. ZJD wrote:

    Should we be surprised? This brings to mind a post of yours a few months back, wherein you said that it was too polite to call Republicans hypocrites and that “frauds” would be a more accurate term. I agree. Whereas hypocrisy stems from a lack of self awareness, fraud involves conscious deceit, and that is exactly what’s going on here.

    As for motivation: “The only other sensible explanation is that they are class warriors who claim they want to cut taxes, but really only want to give money to the rich..”

    Yep, sounds about right.

    Sunday, August 28, 2011 at 11:42 am | Permalink
  4. Max wrote:

    When a Republican is elected in 2012, they can pass the kind of tax cuts they prefer, tilted to the rich. So why give an inch now? Obama is toast, everyone knows it.

    Yeah, it’s a pity about the country, but politics comes first.

    Sunday, August 28, 2011 at 11:51 am | Permalink
  5. starluna wrote:

    ZJD – interesting comment about hypocrisy and fraud. I must have missed that particular discussion, so I appreciate the reminder.

    In your mind, do you attribute the fraud to the GOP leadership, or to the followers? I ask because the tax policies proposed by the GOP leadership are so perverse that I can only imagine that the majority of the nowhere-near-wealthy who follow them, or this line of argument, must be deluded.

    I’m also asking because a paper that is coming out in the next issue of Economic Inquiry found in experiments people did choose a redistributive tax system in accordance with their economic self-interests and regardless of their political party. In short, when people (including Democrats) became wealthy in the experiment (by playing a spelling game), they were more likely to choose low tax rates in a progressive tax structure. And when people became poor (including Republicans), they were more likely to choose high tax rates in a progressive tax structure. In previous versions of this paper, the authors state that they believe that the choices for high or low tax rates has to do with putting effort into earning pay; that those who have earned their wealth believe they should not have to pay higher taxes. I would imagine that anyone who has any sense of entitlement related to their wealthy would probably feel and act the same way. (See http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1466979 for an earlier version of this paper).

    I am mystified at the support that the GOP leadership gets from low and moderate income people. These folks are following this argument not because it is in their economic self interest. So either they are allowing themselves to be deceived or something else is involved in their support of these kinds of tax proposals. I’m inclined to believe that there is an identity issue that is also tangled up with the support of regressive tax policies by low and moderate income people. But, if you are right, they are also being lied to. I’m not sure which is worse.

    Sunday, August 28, 2011 at 3:16 pm | Permalink
  6. ebdoug wrote:

    Starluna: not to be mystified. Rereading “Rise and Fall of the Third Reich.” Roger Ailes uses Hitler’s playbook: lies, slander, and yelling. Does this sound familiar? And those that watch Fox News eat it up and want to believe the lies, yelling and slander. Hitler’s whole party was called a socialist party when his only goal was to make the rich, richer. That is Karl Rove’s aim. Concentrate the wealth in the hands of few. Do away with the Unions. Wisconsin GOP has won on that one. Now like Mein Kampf in the 1920s, we know Karl Rove’s aim as this was written early 2000s. And the Supreme court gives him more power by equating corporations with people. IRS makes the political contributions to American Crossroads tax deductible.
    At the exit polls in 2008, more of the over 250K voted for Obama than McCain. Just like in Germany. Many of the rich were also educated and wanted wealth distribution. Hitler (spell that Roger Ailes and Karl Rove) took care of that.

    Sunday, August 28, 2011 at 4:39 pm | Permalink
  7. ZJD wrote:

    STARLUNA – I attribute the fraud to the GOP leadership. If you sign a pledge to never raise taxes, play chicken with the national economy to uphold it, and then renege on that promise as soon as your economic allies are in the clear, you’re a fraud – pure and simple.

    As for their followers, well… I make it a point to distinguish between Republicans and those who vote for them. Because while the GOP’s actions over the past decade are perfectly understandable from a certain perspective – the plutocratic perspective – support from their non-rich constituents is perplexing. You touched on parts of the explanation: many are deluded or flat-out ignorant, many have some strange identity politics going on. I have my own theory.

    There is one issue on which every single conservative I’ve met agrees. While their stances on abortion, gay marriage, foreign policy and religion vary widely, this one issue unifies them and invariably elicits the most virulent rhetoric. What’s more, their thinking aligns on this issue no matter their age, education level or income. This issue is welfare. Welfare. The word alone seems to have a negative connotation in this political climate. Why? Here might be a clue:

    “In 1991, the book-of-the-month club conducted a survey asking people what book had most influenced their lives. The Bible ranked number one and Ayn Rand’s Atlas Shrugged was number two. In 1998, the Modern Library released two lists of the top 100 books of the 20th century. [...] The [second] list was based on more than 200,000 votes cast online by anyone who wanted to vote. The top two on that list were Atlas Shrugged (1957) and The Fountainhead (1943). The two novels have had six-figure annual sales for decades, running at a combined 300,000 copies annually during the past ten years. In 2009, Atlas Shrugged alone sold a record 500,000 copies and Rand’s four novels combined [...] sold more than 1,000,000 copies.”

    I’m sure many in this country (especially among my younger generation) have not read these books and are unfamiliar with Ayn Rand or her philosophy of “Objectivism.” And it would be a sweeping accusation to blame her for our political woes today. But her influence seems pervasive; many echo her sentiments, even if they have never heard of her. She tapped something deep in the American psyche with her homage to greed and her contempt for the poor. If we understand that relation, I think we can understand why some people might vote against their own economic self interest.

    Sunday, August 28, 2011 at 5:28 pm | Permalink
  8. Iron Knee wrote:

    So it is all based on self loathing?

    Sunday, August 28, 2011 at 8:11 pm | Permalink
  9. Fred Wickham wrote:

    Fifty years ago I was an Ayn Rand acolyte. I was in the military and a few of the older guys got me interested. One of the points that interested me at once was her atheism. I lost interest in her after I left the military, and not too many years later I began to understand what a vile philosophy she pushed. But why would a self-proclaimed atheist have such pull? Simple, Greed trumps even Christianity.

    Monday, August 29, 2011 at 12:53 am | Permalink
  10. ZJD wrote:

    IK – I don’t think so (although my last sentence did make it sound that way – my mistake). When I talk with conservatives, it’s always apparent that they don’t consider themselves beneficiaries of progressive tax policies. They are, invariably, self made individuals – American Dreamers, if you will. They focus their ire on their neighbors’ benefits and on the proverbial ‘welfare recipients’ – people who deserve to be poor because they are lazy.

    So I guess the real answer is that they don’t realize they’re voting against their own economic self interest. At the very least they don’t identify with Americans of similar income and opportunity. They consider themselves, as John Steinbeck would say, “temporarily embarrassed millionaires.”

    Monday, August 29, 2011 at 1:51 am | Permalink
  11. starluna wrote:

    ZJD – That’s a good point about welfare in conservative thinking. This issue of desert (who deserves what) does seem to be the thread that links many of these conservatives together. When mixed with a sense of entitlement I supposed that would lead to what we see today: moderate and low income people supporting policies that are contrary to their economic interests. It also resonates with that research IK posted earlier that shows how so many Americans do not even realize that they are also beneficiaries of social welfare and redistributive tax policies.

    I think this may be a stronger explanation than the coordinated efforts to keep people ignorant, like the Rove and Koch brother campaigns. Not that those are unimportant, but they are tapping into and reinforcing an existing attitude. You’ll have a hard time getting most Americans to agree that dog meat is good because it is contrary to our values and how we think about dogs. But if there are enough Americans who hold some level of contempt for poor people (especially if you think all/most poor people are not of your own racial/ethnic/cultural group) and some level of admiration for wealthy people (especially if you think they all must have earned their wealth), then the campaigns that EBDoug focuses her energy and money to oppose will be much more successful.

    I suppose the next question is how do we change that? How do we make people less greedy? How can we change who these folks identify with? Is that even possible?

    Monday, August 29, 2011 at 8:45 am | Permalink
  12. russell wrote:

    Does anybody actually read the links? CBO report:

    “In comparison with the effects of reducing employees’
    payroll taxes, the effects of reducing employers’ payroll
    taxes are somewhat larger per dollar of forgone revenue.”

    Monday, August 29, 2011 at 8:05 pm | Permalink