Thursday, April 15, 2010

High taxes? Yeah right.

As tax day approaches, around 35% of Americans actually believe that Obama has raised taxes on them. The media has been focused for so long on the Tea Party movement that seeks among other things to lower taxes which they view as having gone up under the Democrats. So this will be news to some of the country, that Obama in fact passed the largest tax cut in recent history as a part of the American Recovery and Reinvestment Act of 2009. Tax refunds in the form of a Making Work Pay tax credit are at their highest levels for at least twenty years. So what makes people think that the Democrats have raised taxes?

First of all, Democrats have mostly been supportive of tax increases more recently. They opposed the Bush tax cuts, supported Bill Clinton's tax increases, and have proposed numerous other ideas such as the carbon tax and tax on high end insurance policies. The truth of the matter is: Democrats would raise our taxes if presented with the opportunity to do so.

Now I agree with Paul Krugman in that I believe that the Republicans don't oppose taxes because they believe in "fiscal responsibility". The Republicans realized in the 1970s that they could not cut spending on Social Security, Medicare and other popular programs without facing a massive public backlash. At this point they began a strategy that deprived these programs of funding so the government would be forced to eliminate them. And how could they go about cutting spending? By cutting taxes.

Clearly the Republicans are winning the messaging war over the tax issue. When you have Democrats bragging about cutting taxes, clearly there has been a paradigm shift in America. But there is a difference between the parties on this issue. The Democrats have cut taxes on the middle and lower class whereas the Republicans have cut taxes for the wealthy. Liberals, including myself, have always argued that the wealthy should pay the most taxes because they have the ability to pay them. Also, depriving the upper classes of inherited wealth leads to increased social mobility, hence the American dream.

So the next time the Republicans say they want to cut taxes, lets ask them whose taxes they want to cut and for what purpose. As far as the Democrats go, the middle class should not see their taxes go up disproportionately under Obama though everyone will have to help bring down our deficit.

4 comments:

  1. Hey, this is right on! The question at the end is perfect... whose taxes do you want to cut? Nice work.

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  2. This may or may not have anything to do with this post, but I found the little I watched of this debate interesting, if you want to watch it.

    http://www.pbs.org/newshour/rundown/2010/04/full-video-fla-residents-politicians-talk-taxes-and-debt-at-town-hall.html

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  3. One argument that I've seen in defense of the idea that the Dems are raising taxes is that the budget deficits have been rising, so even though taxes haven't gone up, they will have to at some point.

    I don't necessarily buy this argument, but it's an argument nonetheless.

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  4. Nice Blog keep up the good work.
    Just some thoughts here..most everyone looks back in time to the 50s as when America was at it's hey day.As you mentioned the current rate of tax is 35%.
    In the 50s it was 91%. Clinton tax increase was to go to 38%. I could go on and on but I just wanted to stop by and say hello.

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