Did Democrats Overplay Tax Hand?

In 2011 Barack Obama came up with the idea of the sequester. The plan was to force Congress to come up with a financial plan or each side’s top programs would get cuts. The idea was that Republicans would not want to see cuts to Defense and Democrats would not want to see cuts to social programs and other non defense agencies so they would all come together, sing Kumbaya and come up with a plan.

The election fell in between and Obama and his Democrats could not address the issue because they wanted tax increases that they could not tout if they wanted to keep their positions. Obama wanted to win a second term so he could not talk about his radical plans or he would lose.

Republicans felt sure that Romney would win and they would take the Senate so they could undo the damage caused by years of stupidity from both sides.

Romney did not win and the time for the sequestration cuts was rapidly approaching. Both sides worked against each other in an effort to fix the mess they created. At the last minute a deal was struck that increased taxes immediately for high income earners and pushed the sequestration cuts off until March First. John Boehner took heat for allowing the tax increases and he should but looking at it now his move might have been a good one.

If sequestration had taken place at the beginning of the year then ALL of the Bush era tax cuts would have gone away. This means there would be tax increases on everyone. Yes, even though Democrats have been screaming that the Bush tax cuts were for the rich they were forced to admit that everyone would be affected if the tax cuts went away.

The reality that the tax increase would hit the middle class and that Republicans would be blamed forced Boehner and Republicans to allow taxes to increase on about 2% of wage earners. At the same time, the deal made the Bush tax cuts for the other 98% permanent. This means that a tax increase on the middle class cannot be held over the heads of the Republicans. They are now in a stronger position to bargain because only a direct act to raise taxes on the middle class can make that happen. No matter what happens, inactivity or allowing the sequester to proceed will not cause taxes on the middle class to go up.

Sure, hundreds of thousands of the middle class will be affected by the sequester but that is by design. The White House came up with sequester and the cuts associated and the White House is ensuring that those cuts directly harm people so that those people will get upset with Republicans and hold them accountable. The Democrats need people to be miserable or they will realize that government is too big and cuts are not a bad thing.

This is why the cuts are taking place in a fashion that will cause direct harm to people and programs that directly involve people.

There is a lot that can be cut that would not harm people but that would not accomplish what Democrats want, direct dependence on government.

In any event, the average person will feel little affect from the cuts. Many federal employees will as will those who depend on services like meals on wheels. But, for the most part, the average person will notice little disruption in their lives.

Other than, of course, the disruption that has been with us since Obama first took office.

Democrats got their tax increase and were to bargain in good faith for spending cuts. They did not (which is not a surprise). Now they are screaming for more tax increases on the wealthy. They talk about closing loopholes (government speak for parts of the tax code people use to pay less in taxes, parts that Congress put there in the first place) and increasing rates on an even larger pool of wealthy taxpayers but refuse to discuss cutting. They want tax increases NOW and cuts sometime in the future.

Republicans are having none of that and are, so far, standing firm on their stance that there will be no more revenue (government speak for taxes). The Republicans do not have to worry now about an automatic tax increase on the middle class because the Bush cuts were made permanent so they have the upper hand.

Democrats might have overplayed their hand because they thought once Republicans allowed a tax increase in December they set a precedent and would cave again.

It is possible that Boehner gave his party a stronger position by allowing a tax increase on the top 2%. Democrats cannot hold that ax over the heads of the Republicans and must now gin up anger within the base in order to get things done.

So far the public has not been in much of an uproar and it looks like Democrats are scratching and clawing in order to get tax increases.

The sequester will begin to hit harder in the next few weeks and then we hit the end of the last continuing resolution. Boehner and his party might be in the driver’s seat because he took the wild card, tax cuts on the middle class, away from the Democrats.

It is time for Boehner to step up and rule with an iron fist. It is time for tax reform and spending cuts. He has the weapons at his disposal.

Because no matter what, Obama will ultimately be held responsible for any disaster that takes place in the coming months.

His stenographers in the media will try to deflect the blame but many Americans are paying attention each day (though we will never be rid of the low information voters).

Democrats toasted the tax increase while bringing in the New Year but they might have given away their bargaining chips in the process.

Related:
Politico

Cave canem!
Never surrender, never submit.
Big Dog

Gunline

[jpsub]



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