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Republicans In A Bind On Tax Increases

The post-election debate inside the Republican Party was a major focus of the Sunday shows today, with perhaps the most interesting comments coming from Bill Kristol of The Weekly Standard, who appears to have taken a rather large step away from Republican tax orthodoxy:

WASHINGTON — Conservative commentator and Weekly Standard editor Bill Kristol said Sunday the Republican Party should accept new ideas, including the much-criticized suggestion by Democrats that taxes be allowed to go up on the wealthy.

“It won’t kill the country if we raise taxes a little bit on millionaires,” he said on “Fox News Sunday.” “It really won’t, I don’t think. I don’t really understand why Republicans don’t take Obama’s offer.”

“Really? The Republican Party is going to fall on its sword to defend a bunch of millionaires, half of whom voted Democratic and half of whom live in Hollywood and are hostile?” he asked.

One of the biggest fights as Congress returns will be over taxes, as cuts put in place by former President George W. Bush are set to expire at the end of the year. Republicans want to extend those tax cuts for all income brackets, while Democrats want to raise revenue by allowing them to expire for wealthy Americans.

Here’s the video via Mediaite:

There’s not really any doubt that the election has given the President a tremendous amount of leverage in the upcoming negotiations over the “fiscal cliff,” especially surrounding the extension of the Bush Tax Cuts. Unlike two years ago, when he was dealing with a lame duck Congress controlled by a Democratic majority that would be out the door by the end of the year, the President now has the momentum of a decisive re-election win and, come January, an increased Democratic majority in the Senate. Where he was willing to give the Republicans everything they wanted, one suspects that the negotiations this time around will be very different, something that Speaker Boehner seems to recognize, although one wonders whether he’ll be able to drag his party along on whatever deal ends up getting made.

My personal guess is that we’ll end up with a modified version of what the President is proposing. Even members of his own party, such as New York Senator Chuck Schumer and Virginia Congressman Gerry Connolly among others, have stated that $250,000 is too low an income level to start tax increases at and have suggested putting the limit at $1,000,000. Indeed, many analysts have suggested that the President would have been on stronger political ground if he’d started at the $1,000,000 level, but, of course, that would leave little room for negotiations.

Whatever the level ends up being, though, it seems to me that the President has a fairly strong negotiating position at this point. Republicans absolutely do not want the defense sequestration cuts to go into effect, and I’d hardly think they want to raise taxes on the middle class at this point. So, they may end up having to swallow some kind of tax increase on high income earners in order to get what they want. The alternative would be to let the nation jump off the “fiscal cliff,” with all of the attendant economic consequences that would bring. I’m better neither party wants that to happen, but at the moment it’s the President who seems to be holding all the cards.

The problem the GOP faces here is that it has spent the last four years, if not longer, pushing an agenda of absolute opposition to any tax increases at all, an orthodoxy reinforced by the ridiculous pledge from Americans For Tax Reform. It’s going to be difficult for them to sell even a slight retreat on this issue to their base, and that could cause problems for many incumbents once 2014 rolls around. As a matter of politics, though, the GOP has very few other options at the moment, and it may be necessary for them to just bite the bullet and make a deal.

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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. Lee R. says:

    The real test is how the vitriolic attack wing of the conservatives responds to this and similar statements. If Kristol doesn’t get attacked immediately, viciously, and endlessly, we’re watching the beginning of a policy shift. If the attacks are swift and furious, we’re watching the beginnings of a civil war.

    Like or Dislike: Thumb up 12 Thumb down 1

  2. James Young says:

    It only works if the Republicans have the wit to demand IMMEDIATE spending cuts, and not have those backloaded a la the deal Reagan made, with immediate tax increases. Unsurprisingly, the Democrats (then controlling Congress) never fulfilled their Wimpy —- “I’ll gladly pay you Tuesday for a hamburger today” pledge. My guess is they will stupidly agree to a similar deal, and get screwed again.

    Poorly-rated. Helpful or Unhelpful: Thumb up 1 Thumb down 16

  3. Latino_in_Boston says:

    In retrospect, the GOP will be very sorry that they did not take the original Boehner-Obama deal which would have given them a huge victory and would have seriously soured the President’s supporters (to the point that he might not have been reelected). It reminds of one of those Las Vegas gamblers who is up $10,000 and instead of walking away decides to keep playing “because they’re in such a hot streak” so that at the end of the night they’re actually thousands of dollars in the hole.

    Of course, none of that would have happened without the tea party. That’s the price you pay when you decide to base your success on the whims of zealots. They’re not about to negotiate, nor can they see when they’re winning, because by definition what they want is absolute victory.

    Highly-rated. Helpful or Unhelpful: Thumb up 26 Thumb down 1

  4. Geek, Esq. says:

    There won’t be any movement before January 1.

    Any deal before then would require Republicans to defy Grover Norquist.

    After the tax rates go up, the very same tax package would be in compliance with Norquist’s edicts, since it would be a reduction in tax rates.

    Makes zero sense, but when Congress outsources its tax policy to an Abramoff co-conspirator like Norquist, that’s what we get.

    Obama needs to ignore bloviators like Beltway Bob Woodward who are acting like it’s going to be his fault that Republicans are beholden to Norquist.

    Highly-rated. Helpful or Unhelpful: Thumb up 16 Thumb down 0

  5. Geek, Esq. says:

    @Lee R.:

    Kristol isn’t the test case–it’s when someone who has to face primary voters makes such a statement that civil war will break out.

    Tax increases on the wealthy plus a pathway to citizenship for undocumented immigrants–double popcorn around.

    Like or Dislike: Thumb up 11 Thumb down 0

  6. Rick DeMent says:

    I can’t figure our why the GOP feels it’s so important to hold the line on this. I mean lets say you make 350K AGI, your taxes will go up all of 4 thousand dollars or 1.14%. and that means that your gross income is something over 350k. I mean god, give the guy his tax increases so he can fulfill his campaign promise then id the economy tanks they can club him over the head with it until the cows come home.

    I’m not really getting what is in it for the tax jihadists other then to appease Grover Norquist (and really someone need to drown Grover Norquist in a bathtub). I mean had they given in right off the bat and the economy still sucked they would have had two years to hammer home how raising taxes on the wealthy is a loser.

    Like or Dislike: Thumb up 9 Thumb down 0

  7. Argon says:

    Ok. $250,001 and not a $%&##!!! penny lower.
    Jeez, $250k is more than plenty. Hell, $150k wouldn’t kill the economy either. Remember, we’re talking about marginal rates.

    Like or Dislike: Thumb up 7 Thumb down 1

  8. OzarkHillbilly says:

    @Argon: No, we’re talking about sanity, something there is precious little of in the GOP.

    Like or Dislike: Thumb up 7 Thumb down 1

  9. Eric Florack says:

    the reference to the election would seem to suggest somebody thinks that Obama got a large mandate for such tax increases. Certainly, Obama will try to make that case as well as supporters. But frankly with the popular vote came within a couple of percentage points I don’t see any large mandate.

    Poorly-rated. Helpful or Unhelpful: Thumb up 1 Thumb down 28

  10. john personna says:

    @James Young:

    So, what is you opinion on the promise that Bush tax cuts were “temporary?”

    Like or Dislike: Thumb up 5 Thumb down 0

  11. john personna says:

    @Eric Florack:

    Disbelieving polls again?

    Like or Dislike: Thumb up 8 Thumb down 1

  12. Eric Florack says:

    @john personna: Polls have nothing to do with it.
    Vote counts do.

    That small a majority does not constitute a mandate.

    Poorly-rated. Helpful or Unhelpful: Thumb up 0 Thumb down 16

  13. Console says:

    I’d settle for a new higher tax bracket. I still think it’s stupid to raise any taxes now and that the whole fiscal cliff stand off is still a way of not solving a problem that doesn’t exist in the first place. The primary drivers of our future deficits are not the discretionary budget, taxes, or defense… and our current deficit isn’t a problem (if it was, no one would be scared of the fiscal cliff).

    Like or Dislike: Thumb up 0 Thumb down 0

  14. anjin-san says:

    I don’t see any large mandate.

    Well, you also saw that Obama was going to lose, no-doubt-about-it. The only question in your mind was by how much. Sort of like when you saw that “Obama can’t win” in 2008.

    Like or Dislike: Thumb up 10 Thumb down 0

  15. Jc says:

    W lost the popular vote and did an unnecessary tax cut (which we continue to pay for). If the deficit is soooo deadly to us all, why not do something to get some revenue from those who can easily afford it?

    Like or Dislike: Thumb up 5 Thumb down 0

  16. Argon says:

    Eric, the GOP lost seats in the US House and Senate at a a time when the economy sucks and we’re still engaged in a war under a Democratic administration. The Norquist idolators lost. The Tea Party and excessive elements of the party are roundly scorned as contributing.

    The President won against a guy who claimed the far right in the primaries and with what was the GOP’s signature economic plan and *including* its primary author as VP pick. Ryan couldn’t care his own state and even lost a large percentage of votes relative to his last run in his bid for the house. The GOP knows it’s operating under the spotlight and from a position of weakness.

    That sounds like a strong enough message for me.

    Like or Dislike: Thumb up 11 Thumb down 0

  17. john personna says:

    @Eric Florack:

    The vote is not a clear tax mandate. It has all those screwy social conservaties messing it up.

    See here:

    By two-to-one (44% to 22%), the public says that raising taxes on incomes above $250,00o would help the economy rather than hurt it, while 24% say this would not make a difference. Moreover, an identical percentage (44%) says a tax increase on higher incomes would make the tax system more fair, while just 21% say it would make the system less fair.

    Like or Dislike: Thumb up 6 Thumb down 0

  18. Nikki says:

    @Eric Florack: It’s not a mandate in those 4 swing states, but it’s a mandate in the electoral college (the only count that matters) and the popular vote.

    You guys lost. Deal with it.

    Like or Dislike: Thumb up 7 Thumb down 0

  19. matt says:

    @anjin-san: That’s GOOD NEWS FOR MCCAIN!!

    Like or Dislike: Thumb up 2 Thumb down 0

  20. Unsympathetic says:

    @Eric Florack:

    You’re objectively wrong. George Bush stated quite clearly that his win in 2004 – with fewer EV’s than Obama had on Tuesday and a much lower PV margin than Obama had on Tuesday – was a mandate.

    If GWB had a mandate, Obama has a bigger mandate.

    Deal with it.

    Like or Dislike: Thumb up 9 Thumb down 0

  21. Andre Kenji says:

    People talks like if raising taxes is a choice.

    Like or Dislike: Thumb up 2 Thumb down 0

  22. john personna says:

    @Andre Kenji:

    Class warfare!

    (Sadly, people who should know better will take up that chant. As much as we need revenue, any change that is progressive will be rejected.)

    Like or Dislike: Thumb up 0 Thumb down 0

  23. Eric Florack says:

    @Jc: How about cutting spending?

    @Unsympathetic: I don’t recall MY saying Bush had a large mandate, either. In fact, I suggested he had none, back in 04 when he made the claim. (Though I do recall allowing : he had one as regards our actions in Iraq…. )

    @Nikki An interesting comment coming from the left who figures the electoral college should be eliminated because it stifles the will of the people….

    @Argon:

    The Norquist idolators lost.

    Ummmm no. That war was never fought. The GOP shunk away from it by aiming at the mythical center. I predicted the result of that a year ago.

    Like or Dislike: Thumb up 0 Thumb down 9

  24. Brainster says:

    I’m with Kristol; I suspect that a lot of wealthy people vote (D) precisely because they know the Republicans will protect them from tax increases, so they can vote their liberal social inclinations.

    Like or Dislike: Thumb up 0 Thumb down 0

  25. An Interested Party says:

    the reference to the election would seem to suggest somebody thinks that Obama got a large mandate for such tax increases. Certainly, Obama will try to make that case as well as supporters. But frankly with the popular vote came within a couple of percentage points I don’t see any large mandate.

    Whenever any conservative tries to peddle this horseshit, he only needs to be reminded of what Bush did after he “won” in 2000, when he didn’t even win the popular vote…

    Like or Dislike: Thumb up 5 Thumb down 0

  26. Whitfield says:

    Here is a solution for the budget problems: form a committee of small business owners, construction workers, and other middle class workers. No politicians, lawyers, or university professors. Have them come up with tax plans, government reform, and budget cuts. Then present it to Congress and the president: “Mr. President, here is a plan of the people!”.

    Like or Dislike: Thumb up 0 Thumb down 4

  27. Jc says:

    @Eric Florack: Sure, let’s start with the spending done through the tax code and the war on Afghanistan. Or are you for attacking the safety net? Cut what spending? Everyone agrees to some of both, or at least they said they did. Reverting back to old rates for 250k plus seems like a no brainer, unless you believe it will destroy us all.

    Like or Dislike: Thumb up 1 Thumb down 0

  28. dmhlt says:

    @Eric Florack:
    Why, even before the election at least four Republicans characterized Pres. Obama’s final margin of victory as a LANDSLIDE:

    Larry Kudlow: “I am now predicting a 330 Electoral Vote landslide for Romney”
    http://video.msnbc.msn.com/cnbc/49561468#49561468

    George Will: “I’m projecting Minnesota to go for Romney in a 321-217 landslide.”
    http://dailycaller.com/2012/11/04/george-will-predicts-321-217-romney-landslide/

    Wayne Allen Root: “Electorally it won’t even be close … I predict a Romney victory by 100 to 120 electoral votes.”
    http://www.foxnews.com/opinion/2012/10/09/romney-will-win-in-landslide-las-vegas-oddsmaker-doubles-down-on-prediction/

    Dick Morris: “We’re going to win by a landslide…. My own view is that Romney is going to carry 325 votes.”
    http://www.washingtonpost.com/blogs/erik-wemple/post/dick-morris-landslide-prediction-too-early-to-call/2012/11/06/aafe5796-2875-11e2-bab2-eda299503684_blog.html

    Like or Dislike: Thumb up 7 Thumb down 0

  29. jukeboxgrad says:

    florack:

    frankly with the popular vote came within a couple of percentage points I don’t see any large mandate … That small a majority does not constitute a mandate.

    I can’t imagine why you would think that anyone would give a damn about what you “see.” You’re the guy who said this on 10/21:

    Obama has lost re-election. The only question remaining is how large a victory Romney is headed for.

    And you told us a couple of days before Obama was elected (the first time) that he would lose and there would be “rioting in Grant park.” Your credibility is less than zero.

    Like or Dislike: Thumb up 5 Thumb down 0

  30. jukeboxgrad says:

    within a couple of percentage points

    The popular vote margin is 2.7% (and I’m not sure the counting is done). That’s not fairly described as “a couple of percentage points.” What’s closer to “a couple of percentage points” is Bush’s margin in 2004: 2.46%.

    In 2004, many people claimed that GWB had a mandate. This group included many supposedly liberal reporters (link).

    Notice what Krauthammer said when Bush won 286 electoral votes in 2004: “a solid mandate.” What Krauthammer said when Obama won 332 electoral votes in 2012: “he’s got no mandate.” Hilarious. Let’s review some numbers:

    Popular vote margin in 2004: 2.46%
    Popular vote margin in 2012: 2.7% as of now, and will probably be about 3% once all the votes are counted. Last time any R won with a bigger margin: 1988.

    Electoral vote margin in 2004: 35.
    Electoral vote margin in 2012: 126.

    Also, as of the latest count, Obama 2012 has more votes than Bush 2004. On the other hand, Romney has fewer votes than McCain, and fewer votes than Kerry.

    If GWB had a mandate in 2004, then Obama has a mandate now (as Unsympathetic also explained).

    I don’t recall MY saying Bush had a large mandate

    So what? Who cares? Your statements and opinions are entirely worthless except as inadvertent humor.

    Like or Dislike: Thumb up 2 Thumb down 0

  31. jukeboxgrad says:

    dmhlt:

    Why, even before the election at least four Republicans characterized Pres. Obama’s final margin of victory as a LANDSLIDE

    Outstanding. I’m sure you won’t mind if I point to your comment in the future.

    I also like this from Steve Forbes:

    Romney Will Win Decisively … Romney will win big tonight. His popular vote margin will be between 3 – 5%. He will win the Electoral College I believe by a vote of 321 to 217 … One of the big Wednesday morning stories will be why most of the polls didn’t have this right. … In the Senate, the GOP should easily have won a basketful of new seats but a number of missteps by their candidates have made outcomes uncertain. Nonetheless enough will struggle across the finish line to give Republicans control of the upper house.

    Like or Dislike: Thumb up 1 Thumb down 0

  32. jukeboxgrad says:

    argon:

    Ryan couldn’t carry his own state

    Mitt had essentially the same problem (link):

    Romney-Ryan poised for historic home state Election Day defeats …

    … the final pre-Election Day polling indicates … Romney and … Ryan face the likelihood of making a dubious form of presidential election history – losing all of the states they call home. For the first time since 1972 … a major political party’s presidential ballot may lose all of its candidates’ states of both birth and residence.

    … the final polls … show the Romney-Ryan ticket trailing in every single state that the two candidates were either born in, held elected office, or claimed as their primary domicile.

    In total, the 2012 Republican presidential ticket is in jeopardy of losing an unprecedented five states – worth an eye-popping 96 votes in the Electoral College – that know the candidates better than anyone else.

    … all indications point to Mitt Romney losing every single state in which he has lived during his entire lifetime, with the sole exception of Utah …

    … Romney has lived in Belmont, Massachusetts since he graduated from Harvard University in the 1970s, and Bay State residents are the only people voting in the presidential election who have experienced living under his style of governance.

    Romney was born in the state of Michigan, where his father George Romney was the governor from 1963 to 1969, and he was raised in the suburb of Bloomfield Hills. …

    California holds the dual distinction of being the state where Romney owns a $12 million beachfront home in La Jolla, and was also the first state he lived in as an adult when he briefly attended Stanford University for his freshman year of college. …

    New Hampshire is the state where Romney owns a $10 million vacation home compound in Wolfesboro that qualifies as his family domicile every summer …

    Wisconsin is both the birth state and home of Romney’s running-mate Rep. Paul Ryan …

    In 2000, the embarrassing loss of his home state of Tennessee was what ultimately cost former Vice President Al Gore the presidential race. In the 2012 election, the potential of as many as 96 electoral votes lost in the Romney-Ryan ticket’s home states is even more costly and humiliating …

    Also:

    As many as five states could claim to be Romney’s home state: Massachusetts, where he voted Tuesday; Michigan, where he was born; New Hampshire, where he has vacation property; California, where he owns a home; and Utah. But he lost all of them except Utah… In Michigan, where his father was governor and Romney was raised, he lost by 9 points. In California, where he spent a year at Stanford and now has his primary residence in La Jolla, it was 20 points. In Massachusetts, which has perhaps the strongest claim to be his home state, he lost by 23 points. Romney lost his hometown, Belmont, by a nearly 2-1 ratio.

    Loser.

    Like or Dislike: Thumb up 0 Thumb down 0

  33. Barry says:

    @Eric Florack: “But frankly with the popular vote came within a couple of percentage points I don’t see any large mandate.”

    Funny – I don’t recall Republicans saying that in 2000 or 2004.

    Like or Dislike: Thumb up 4 Thumb down 0

  34. C. Clavin says:

    Florack claims Obama doesn’t have a mandate by the popular vote…even though it is a bigger spread than Bush got when he decided he had the political capital to push privatizing Social Security.
    First…We don’t elect by the popular vote…if we did everyone would be campaigning in NY and California and not Iowa or Ohio.
    9 swing states…Obama won 8. That’s 88% success rate.
    Second…Romney ran on tax cuts for the rich. Obama ran on increasing the traxes paid by the rich. Obama won.
    Third…McConnell and the Republicans made defeating Obama thier number one priority. They failed miserably.
    People like Florack should grow a pair and learn to deal with losing. It’s only going to get worse for the Racist Republican Party.

    Like or Dislike: Thumb up 3 Thumb down 0

  35. john personna says:

    @C. Clavin:

    Third…McConnell and the Republicans made defeating Obama thier number one priority. They failed miserably.

    This. How is holding the nation hostage actually working out for you?

    Like or Dislike: Thumb up 3 Thumb down 0

  36. john personna says:

    @jukeboxgrad:

    There is a reason Steve Forbes might have affinity for other idiot sons of bright and accomplished fathers.

    Like or Dislike: Thumb up 2 Thumb down 0

  37. jukeboxgrad says:

    Excellent point. It’s interesting to notice how often this happens: Donald Trump, GWB. (“Idiot” is a strong word for GWB, but he’s a smaller man than his father.) Probably a lot of other people belong on that list who I can’t think of right now.

    McCain isn’t an idiot but he’s probably someone else who is smaller than his father.

    Like or Dislike: Thumb up 1 Thumb down 0