Republicans must not get rolled by Obama on payroll tax cut (which is why they must extend it)
When the payroll tax cut (from 6.2% down to 4.2%) was first proposed by President Obama around this time last year, as part of a deal to extend the Bush tax cuts, I don’t recall hearing a lot of objections being raised, or anyone being particularly perturbed. One exception, however (that I would be extremely remiss in not mentioning) was that of myself, writing in another space.
I pointed out then that this particular kind of tax cut was “fundamentally dishonest” and indeed “the most craven kind of gimmick that could be conceived,” coming as it did from the Democratic side, which generally opposes tax cuts on principle. (That principle being that everybody’s money really belongs to the government.) To propose a cut in the very tax that is supposed to fund Social Security, when everyone is aware that that program is well on its way to insolvency, and in the absence of any larger plan to fix the program, simply made no sense. And this was from the party that is always accusing Republicans of wanting to dismantle Social Security! The fact that allowing Americans to keep this much more money in their pockets would be stimulative to some extent seemed beyond argument, but the form which this cut took seemed exactly the wrong one. As I said then, it would be better “to just send everyone a once-off check: ‘HERE’S YOUR FREE MONEY’ – signed, your friend, Barack H. Obama.” Even that would be better, in other words, then sending the message that it was OK to slash Social Security taxes without doing one single thing to fix what is otherwise a doomed Ponzi scheme.
What was Obama’s motivation in doing this? That, too, seemed pretty clear to me a year ago.
In thirteen months, [this tax] will be due to go up again. That takes us — let me see — right into early 2012. Hmm, a presidential election year. So, there’s going to be a tax “hike” on everyone in a presidential election year?
But “No!” I can hear President Obama and the Democrats saying, in early 2012. We can’t let this tax go up — a tax that affects all working people, even the poor, while the rich still have their tax cuts that they got from that bad, bad man, George W. Bush.
Correct me if I’m wrong, but I believe that this sets up a class warfare type of argument in an election year. That is the Trojan Horse in all of this.
And, indeed, class warfare has utterly defined Obama’s political manoeuvrings over the course of this past year, right down to the nods, winks and outright support given to the concocted Occupy Wall Street shenanigans. Having this fight at this time over increasing this tax (which affects every working American) is the crowning point of Obama’s class-warfare reelection strategy, and is also key to potentially turning around a very grim prognosis for congressional Democrats as well.
Republicans, or at least a fair number of them, now find themselves in the role of being in favor of a tax increase on every working American (of between $1000 and $2000) on the grounds of responsible budgetary practices. Some of these Republicans argue that the public will support them for standing on principle on this matter, given the deficit, etc, etc.
I (who anticipated all of this a year ago) say this to that: BS!! No one is going to give the Republicans some kind of credit for standing on principle when they see the amount of their paycheck fall, in the middle of this continuing recession/depression, and in an election year. Are they out of their stupid little minds? You’re going to be on the side of reducing the average person’s take home pay by $1000 and you expect people to do anything but hate you for it?
Obama wins this argument, pure and simple. Everyone knows the Republicans have stood firm against letting previous tax cuts “expire,” including those that happen to benefit the very wealthy. Although that can be a difficult position politically, with the kinds of class-warfare arguments used by Obama and the Democrats, the fact is that the Republicans have been, on balance, winning that particular fight. People in the end accept their standing on principle against all tax increases. But if they make an exception now on this payroll tax cut, on the grounds of fiscal responsibility or anything else, they will be hammered on it incessantly from here to November 6th of 2012. And the hammering will succeed. Republicans are currently positioned for a potential sweep: retaining the House, winning the Senate and winning the White House. This one issue could reverse all three. That’s because it’s not really one issue. It is, for the average working American, approximately one thousand issues; also known as greenbacks.
The payroll tax cut may not have been a great idea when proposed. It may not be the most stimulative kind of tax cut. It may send exactly the wrong message considering the predicament of Social Security (and, in fact, it definitely does). Yet, on this one, politically, Barack Obama has the Republicans over a barrel. They cannot and must not be seen at the end of the day to have allowed the average American’s taxes to go up like this during a continued economic crisis, and during an election year to boot. If they can force Obama’s hand on something like the Keystone pipeline project, that’s well and good (and no president who had any real compassion for the economic hardship out there would be opposing such a project, which would create tens of thousands of non-hypothetical jobs). But one way or another they simply have to extend this tax cut.
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If they don’t realize this, they are numbskulls and truly deserve to be thrown out of office, and this is very likely what will happen. Unfortunately, their replacements will not be any improvement.
So my message to Republicans is: “Stick to not raising taxes on anyone, ever. And most especially, please, do not raise taxes on me.” (And, by the way, always look Trojan Horses in the mouth.)
