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Conservatives For Higher Taxes

Michael Shear of The New York Times takes a look at the bizarre phenomenon of conservative politicians and pundits who are perfectly willing to let tax rates go up across the board in just over two weeks:

With a critical procedural vote scheduled for Monday afternoon in the Senate, some Tea Party activists and other conservative pundits are attacking it from the other side.

A group called the Tea Party Patriots is circulating a petition accusing Republican lawmakers of cutting a bad backroom deal with the president that violates the principles that Tea Party candidates campaigned on in the midterm elections.

“‘The Deal’ revives the death tax, an immoral ‘vampire tax’ that sucks the blood from the dead, ruins family businesses and double taxes savings that were accumulated over a lifetime,” the petition says. “‘The Deal’ spends billions and billions of dollars that the country does not have in order to prevent a tax hike that the country voted against.”

Rush Limbaugh, the conservative radio host, said the tax deal “should not happen.” On his show Friday, Mr. Limbaugh blasted the Republican lawmakers on Capitol Hill for giving in too much to Mr. Obama.

“The economic benefit here, if we do this deal, is going to be minimal,” Mr. Limbaugh said, insisting that Republicans should have fought for the permanent extension of the tax cuts rather than giving in to a temporary one. “Where is the Republican vision?”

Erik Erickson, the conservative blogger, wrote at Redstate.com that the “deal must now die.”

“It must now be opposed by Republicans,” Mr. Erickson wrote. “Released now in print, the legislation is loaded up with budget-busting pork of ridiculously absurd levels.”

Sarah Palin, the former governor of Alaska, appears to agree with Mr. Limbaugh. In a Twitter message, she endorsed the position of Senator Jim DeMint, Republican of South Carolina, who has criticized the compromise.

The arguments from the right against the tax extension deal seem to boil down to four separate arguments, none of which holds up under even the most cursory examination.

The first problem that many on the right seem to have with the deal is the fact that it would reimpose the estate tax, which currently doesn’t exist thanks to an odd quirk in the law, from a rate of 0% to a rate of 35%. What this argument ignores is the fact that, if nothing is done before December 31st, then the estate tax will be coming back anyway, and it will be far more widely applicable than it would be under the deal worked out between Senate Republicans and the President. Under current law, the estate tax would return in 2011 with a rate of 55% on estates worth $1,000,000 or more. Under the terms of the deal, the estate tax would return at a rate of 35% on estates worth $5,000,000 or more.  How anyone other than the most partisan ideologue cannot see this as a victory is beyond me.

The second feature of the deal that conservatives have attacked over the past week relates to the unemployment insurance “extension.” As I explained yesterday, what’s agreed to in the deal isn’t really an extension of unemployment benefits so much as it is a patch that will allow people who are still eligible to receive benefits can continue to receive them. More importantly, though, while there may be legitimate ideological objections to long-term unemployment compensation payments, any politician who tries to oppose extending unemployment at the same time they are favoring extending favorable tax rates for individuals making $ 250,000/year or more is simply not paying attention to political reality. When we’re in the middle of an era of incredibly slow job growth and high unemployment, taking that position is just political suicide.

The third argument coming from the right against the tax cut extension deal is the belief by some on the right that the GOP would be able to get a better deal when they take control of the House of Representatives, and have a smaller minority in the Senate, after January 3rd. Considering the fact that, at least when it came to the tax cut extension itself, the GOP got nearly everything it wanted from President Obama, it’s hard to believe that they could do any better a month from now than they did last week. Most importantly, given the amount of heat that the President has taken from his own party over the deal, it seems incredibly unlikely that he’d be willing to give the GOP any more than he already has. Finally, the people who think the GOP can do better in a month forget the fact that the Senate will still be controlled by Democrats, that you’ll still need to 60 votes to get anything through the Senate, and that the President has a veto pen.

Finally, there are a certain number of people on the right who simply want to reject the deal because it will work to the benefit of the President as well as the GOP. There really isn’t much that I can say about that argument other than it isn’t surprising to hear it coming from people who said they wanted the President to fail even before he took office. In the end, though, I think it’s this visceral need to destroy Barack Obama that motivates certain people on the right to abandon their principles and favor across-the-board tax cuts. Pretty sad.

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About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May, 2010 and also writes at Below The Beltway. Follow Doug on Twitter | Facebook

Comments

  1. Drew says:

    Doug –

    You make 4 points:

    1. This is absolutely correct. And as a private equity guy who buys family businesses for a living, this is a huge issue with small business owners. The 5/35 is a huge sigh of relief, and will loosen up their thinking on reinvestment.

    2. A necessary evil. Its the old saw: sausage making and political dealmaking……..

    3. The problem here, IMHO, is that we are talking 3-6 months to make a new deal. But the tax structure expires at 12/31. That’s a disaster, and may portend a double dip (didn’t I just say that on one of your other posts?) Take it, people, and fight your other battles another day, not in the midst of a smoking ruins.

    4. I think that’s overwrought. If you are correct, yes, its sad. But I’m one who simply can’t stand the guy, and think he’s the worst thing to happen in years………..yet I would never, ever sabotage the economy or the country just to dunk a politician. We had enough of that from the left in the Bush years. Let’s hope we are better citizens.

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  2. ponce says:

    4. It think this is more about a power struggle between factions of the Republican Party than about southern Republicans’ blind hatred of America’s first black president.

    The Tea Party types were already neutered in the Republican leadership battles, this deal would would turn them into a joke.

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  3. Drew says:

    When your brain is the size of a pea, and that pea cannot construct useful arguments………invoke racism.

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  4. Tlaloc says:

    “1. This is absolutely correct. And as a private equity guy who buys family businesses for a living, this is a huge issue with small business owners. The 5/35 is a huge sigh of relief, and will loosen up their thinking on reinvestment. ”

    The estate tax is a huge issue with small business owners? Really? A Tax that affects only those who die and are leaving amounts over 1,000,000 to heirs is a huge deal to small business owners? I don’t mean to call bullshit….actually I’m not sure how to end that sentence.

    “3. The problem here, IMHO, is that we are talking 3-6 months to make a new deal. But the tax structure expires at 12/31. That’s a disaster, and may portend a double dip (didn’t I just say that on one of your other posts?) Take it, people, and fight your other battles another day, not in the midst of a smoking ruins.”

    A disaster you say? SO if we went back to the tax structure of the 90s when the economy was rocking, as opposed to the tax structure of the 2000s when the economy was a stagnant ruin, that’d be a disaster? Again I feel an overwhelming urge to yell bullshit.

    Taxing the wealthy does nothing to cause a double dip recession. On the other hand strangling off the government stimulus that is keeping the economy afloat right now in order to give money to the rich most definitely would contribute to a possible double dip. Time after time we’ve found that trickle down economics simply is a self serving fantasy cooked up by the rich to sell to a gullible middle class of right wing voters who don;t realize they’re under attack by their own side.

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  5. Drew says:

    “….actually I’m not sure how to end that sentence.”

    That’s becuase you had nothing of substance to say.

    “Again I feel an overwhelming urge to yell bullshit.”

    Yell bullshit. Take another bong hit, and then attempt – hard as it may be – to construct a cogent economic argument, based upon facts, other than “the economy was rockin'”……….dude. BTW – where do you get your weed.

    “Taxing the wealthy does nothing to cause a double dip recession.”

    Yeah, how many small businesses do you own. How many small business owners do you speak with?

    “On the other hand strangling off the government stimulus that is keeping the economy afloat right now in order to give money to the rich most definitely would contribute to a possible double dip.”

    You bet, dude. That current 9.8% unemployment rate – after all that rightous stimulus – is just a bitch’n success, eh?? Take a toke……….and right arm……….

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  6. wr says:

    Drew — The notion that the estate tax falls heavily on family businesses is a crock, as has been proven time and time again. A tiny, tiny fraction of such businesses are affected. Really, the only family business that matters in this debate is the one owned by the Waltons — but since they’ve got enough cash to buy all the politicians they need, that’s the only business congress cares about…

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  7. An Interested Party says:

    So…$1 million=small business? Really? And others are the ones accused of hitting the bong…

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  8. Tlaloc says:

    “That’s becuase you had nothing of substance to say.”

    Right, so you aren’t even going to pretend to be able to defend your argument. Gotcha.

    “Take another bong hit, and then attempt – hard as it may be – to construct a cogent economic argument, based upon facts, other than “the economy was rockin’””

    Well since I have to spell it out for you:
    We have direct evidence of an economy under the 1990’s tax structure, and under the 2000s tax structure, namely the economy of the 1990s and the 2000s. One of those did extremely well (GDP growth, employment, pretty much by any measure you care to name except trade deficit the 1990s…rocked). One of those was horrible. The good one was the one with the tax structure you insist is recession causing. The bad one, i.e. the one that spawned the worst recession in US history, is the one that had the tax structure you think is great. Now maybe you can argue that your beloved tax cuts for the rich are really good but so far the evidence is heavily against you.
    I’m all aflutter to hear your cogent economic arguments why we should ignore economic reality in favor of your personal theories.

    “Yeah, how many small businesses do you own. How many small business owners do you speak with?”

    I need to speak with small business owners in order to learn that taxes on the wealthy cause recessions? Why don’t I just look at all the relevant data, you know the data which shows the exact opposite? The real lesson here is that small business owners apparently lie to you. I’m guessing they find your gullibility funny. That’s speculation, though.

    “You bet, dude. That current 9.8% unemployment rate – after all that rightous stimulus – is just a bitch’n success, eh??”

    You mean the stimulus that got loaded up with tax cuts to appease the republicans? You’re damn right it failed to work. Gee, I wonder if there might be a correlation there. Depending on the measure from 28-36% of the stimulus bill was tax cuts:
    http://www.politifact.com/truth-o-meter/statements/2010/feb/10/jon-stewart/stewart-claims-stimulus-bill-one-third-tax-cuts/

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  9. ponce says:

    “invoke racism”

    I wouldn’t call it racism.

    It’s just certain Republicans have a rabid hatred of Obama that can’t be explained by politics alone.

    Though I think normal Republicans are starting to hate their loony Tea Party members more than Obama.

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  10. john personna says:

    “So…$1 million=small business? Really? And others are the ones accused of hitting the bong…”

    A million dollars ain’t what it used to be.

    That said, I am a believer in estate taxes, just because they fit my vision of American capitalism. We should all be born with equal opportunities, we should compete hard and fairly, and at death, game over. Count the score.

    The wealthy can give their kids enough advantages while living. They can gift them houses and cars if they want to. That, in my world view, is enough.

    Indeed I think giving too much, or kids expecting too much, is bad for their own potential (and certainly their moral development).

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  11. john personna says:

    (I have never been a trust fund kid, but thinking back, I can see it messing me up if I’d got one before age 40 or something. Maybe we have a trust fund kid here who will disagree ;-)

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  12. george says:

    “It’s just certain Republicans have a rabid hatred of Obama that can’t be explained by politics alone.”

    I don’t know, the same rabid hatred was there for Clinton as well. I agree that its irrational though.

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