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September 29, 2010

Hacker: Democrats Unwilling to Let Bush Tax Cuts Expire

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As a symbol of how Democrats have completely lost control of the tax debate in Congress, witness this display just now in the House. Basically, the House set up the terms for their debate today and their eventual adjournment this week. John Boehner called them cowards for running from extending the Bush tax cuts in total. He wanted the House to vote against adjournment so he could get a vote on the tax cuts, and a shocking number of House Democrats responded to him. In fact, Nancy Pelosi had to cast the deciding vote to set up the adjournment, a rare occurrence.

If that doesn’t lead you to agree that Congress just doesn’t want to let tax breaks for millionaires expire, try these data points on for size. Forty-seven House Democrats insisted to Pelosi in a letter that Congress extend capital gains and dividend tax cuts for the rich. Ben Nelson spoke at the Heritage Foundation in support of extending all the tax cuts. The majority of the House Democratic caucus may favor the Obama tax plan, but the majority of Congress simply doesn’t agree. Which makes it nearly impossible to schedule a vote in an acceptable fashion. Which is why Pelosi didn’t.

Jacob Hacker understands this:

TWI: So the backdrop for all of this is the Bush tax cut debate. Would raising income taxes on high earners, or making taxes more progressive, help?

Hacker: It’s obvious that the extension of all the Bush tax cuts, including those for the very richest, will exacerbate this imbalance. But, we have seen that that issue is not going to be front and center in the midterms. You would think that Democrats would gain political ground by emphasizing the rising inequality, still rising. But Democrats aren’t wiling to support tax increases at all.

And I think it’s just a reminder that while those at the very top may be paying a large share of the nation’s taxes, they actually have been paying lower and lower rates over this period. Government has added to their gains via federal tax policy. Again, it suggests to me that there is not any natural tendency for things to come back. It requires leadership and action, politically, and it is not a particularly encouraging sign that the party that has the most to make from emphasizing the rising inequality is not doing it.

The Democrats are afraid to talk about taxes, afraid they’ll be tarred as big government liberals if they stick to their guns and stick to the middle tax cuts only. That’s suggestive of the degree to which the debate has been shaped by those criticizing government and arguing that the manifest problems in the economy aren’t a result of recklessness or misbehavior or mismanagement. People are upset. There’s no natural reason — it’s not inevitable that they’ll connect the problems in their lives to these trend in inequality. So, instead, it is about a runaway government that’s spending too much and hasn’t dealt with the debt.

Absolutely. The public may get this, but the policymakers are significantly behind the curve. So Congress will adjourn today, and Republicans will still call Democrats tax-raisers, Democrats will try to dodge the issue, and the public will scratch their heads, when they’re not being bombarded with far-right propaganda.

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