If you’re fighting against a very rich man, in a very deep economic malaise, the best way to beat the rich man is simply to point him out.
You could say that’s the philosophy behind the Obama administration’s latest tactic in the jobs vs. deficits budget fight. By proposing a new tax rate for millionaires, structured so that they no longer pay a lower effective tax rate than their secretaries (and they’re calling it “the Buffett rule,” building on Warren Buffett’s “quit coddling us rich guys” op-ed) the Obama team is framing a new narrative that, like the American Jobs Act, Republicans will find hard to counter.
In a growing, robust economy, pointing to the rich guys doesn’t work. Americans are generally aspirational in nature, and people in the middle income brackets kind of look up to rich people when times are good. Note that the “Cribs” and “My Super Sweet 16″ TV phenomena took off during the go-go 90s and early 2000s, while “Dallas” and “Dynasty” and “The Fresh Prince of Bel Aire”, not to mention “Beverly Hills 90210″ and “Lifestyles of the rich and famous” were creatures of the bling-blinging mid 1980s. In high times, people like to indulge in “wealth fantasies.”
Now, with the economy refusing to revive itself fully, sure, there are “real housewives” shows everywhere you turn, but the look we’re getting of rich people is far from aspirational. The rich people portrayed in reality TV are craven, shallow, insipid and insane. And unlike the craven, shallow characters in Dallas or Dynasty, or the insipid, shallow people in “Cribs” or “Lifestyles of the Rich and Famous,” we don’t secretly dig them. We outwardly, gleefully, hate their guts.
Put another way (and here I quote Chris Matthews from an appearance he did in Miami in 2004,) politics is about where you put the wedge in. When times are good economically, the wedge is generally between the middle class and the poor, as the middle class seek to ID with the upper class. But when times are tight, the wedge gets jammed right in between the rich and the middle class, because the middle class feel poorer, and more important, they feel like they’re getting screwed, while the rich are getting away with murder.
Calling for a rule where millionaires pay the same tax rate as their secretaries points out to the listener that currently, millionaires pay less in tax rates than their secretaries. And objecting to this change, and its basic appeal to fairness, sounds tin-eared.
Enter the Republicans, who are walking right into this particular bear trap with no shin guards.
From the New York Times:
Mr. Obama will call for $1.5 trillion in tax increases, primarily on the wealthy, through a combination of closing loopholes and limiting the amount that high earners can deduct. The proposal also includes $580 billion in adjustments to health and entitlement programs, including $248 billion to Medicare and $72 billion to Medicaid. Administration officials said that the Medicare cuts would not come from an increase in the Medicare eligibility age.
Senior administration officials who briefed reporters on some of the details of Mr. Obama’s proposal said that the plan also counts a savings of $1.1 trillion from the ending of the American combat mission in Iraq and the withdrawal of American troops from Afghanistan.
In laying out his proposal, aides said, Mr. Obama will expressly promise to veto any legislation that seeks to cut the deficit through spending cuts alone and does not include revenue increases in the form of tax increases on the wealthy.
That veto threat will put the president on a direct collision course with the House speaker, John Boehner, who said last week that he would not support any legislation that included revenue increases in the form of higher taxes.
Mr. Obama’s proposal is certain to receive sharp criticism from congressional Republicans, who on Sunday were already taking apart one element of the proposal that the administration let out early: the so-called Buffett Rule. The rule — named for the billionaire investor Warren E. Buffett, who has complained that he is taxed at a lower rate than his employees — calls for a new minimum tax rate for individuals making more than $1 million a year to ensure that they pay at least the same percentage of their earnings as middle-income taxpayers.
That proposal, which was disclosed on Saturday, was met with derision Sunday by Republican lawmakers, who said it amounted to “class warfare” and a political tactic intended to portray his opponents as indifferent to the hardships facing middle-class Americans.
Representative Paul D. Ryan, chairman of the House Budget Committee and a leading proponent of cutting spending on benefit programs like Medicare, said the proposal would weigh heavily on a stagnating economy.
On “Fox News Sunday,” Mr. Ryan said it would add “further instability to our system, more uncertainty, and it punishes job creation.”
“Class warfare,” he said, “may make for really good politics, but it makes for rotten economics.”
Now you see what Paul Ryan just did there? He admitted that what he’s calling “class warfare” makes for “really good politics.” He’s saying that, because it’s true. Middle class people will not be amused to discover that a) millionaires pay a lower tax rate than their secretaries, and b) Republicans want to keep it that way, because to people like Paul “let the unemployed work for free” and “give grandma a voucher instead of Medicare” Ryan, making rich people pay in taxes what the little people have to pay is “class warfare.”
Let’s go to the Washington Post:
Appearing on CNN’s “State of the Union,” Sen. Lindsey Graham (R-S.C.) echoed Ryan’s characterization of the plan as class warfare, adding that it was “political move” that would do little to reduce the debt.
“The tax code should be reformed for one purpose: to generate more revenue to help run the government and create jobs,” Graham said. “When you pick one area of the economy and you say, ‘We’re going to tax those people because most people are not those people,’ that’s class warfare.”
Democrats, meanwhile, defended the idea and criticized House Speaker John A. Boehner’s (R-Ohio) absolute refusal to consider any tax increases.
“I wonder if Boehner knows what it sounds like when he continues to say the position of the Republican party in America is that you can’t impose one more penny in taxes on the wealthiest people. I wonder if he understands how that sounds in Ohio to working families who are struggling paycheck to paycheck.”
Former President Bill Clinton also backed the plan during an appearance on CBS’s “Face the Nation.”
“If you look at the group that has had the biggest income increase and the benefit of most of the tax cuts of the previous eight years before the Obama administration took office, those of us in that income group, we’re in the best position to make a contribution to changing the debt structure of the country.”
Now you see what former president Clinton did just there? He took the position as one of those millionaires that it’s only fair that people like him pay their fair share. Meanwhile, Lindsey Graham takes the really unpleasant position that it’s somehow not fair to ask millionaires and billionaires to pay the same rate as their secretaries, and that somehow, doing so won’t reduce the deficit — which to most people, will sound insane. And as that unnamed Democrat asked, I wonder if Republicans understand how they sound to ordinary working people…
For a party, the Republicans, who are already perceived as the party of rich people, pushing back on this one is going to be tricky. And for the president, there’s really no downside. The Wall Street millionaires already hate his guts. And since most Americans view Wall Streeters as the biggest villains of the Great Recession, Obama can pull an FDR and welcome their hatred, which aligning himself with the “fair deal millionaires,” like Buffett and Clinton and Michael Bloomberg. (Though that means the Obama campaign is going to have to double down on individual fundraising to make up for the corporate/Wall Street/rich guy money tsunami that will be flowing to his GOP opponent.) No matter. Obama can and very likely will run for re-election on a simple question: are you with the little guy who wants a job and basic fair play, or are you with the millionaires?
And even as his Democratic team goes all knee-wobbly over the Jobs Act (because that’s what they do), Democrats are unlikely to defect from this proposal (except Ben Nelson and Joe Manchin, because, well, just because they’re them…) and even if they do, the president can effectively begin running against Congress for the next year, against the entire institution that’s failing to get done the “American Jobs Act” and that’s failing to make millionaires and billionaires pay at least the same tax rate as their secretaries. And he can run against the now fundamental, and unanimous, GOP proposition that the rich are too good to pay the same taxes as you and me.
Not so dumb after all, Mr. Suskind.
And by the way? Warren Buffett likes his new rule.