Obama, Dems skirt issue on tax hikes

by Erica Werner
AP
July 11, 2011

Call it eliminating an unfair break, or removing an unjust loophole, or even “taking a balanced approach.” Just don’t call it raising taxes.

As they work toward a must-do deal with Republicans on paring trillions from the deficit in order to raise the nation’s debt limit, President Barack Obama and Democrats are saying almost anything to avoid the politically toxic pronouncement that they want to increase taxes.

Republicans, for their part, are just as quick to declare elimination of the most rarefied corporate benefit a job-killing tax hike on the American people.

It’s all about winning the public relations debate over the debt limit, and in turn, perhaps, gaining a more politically advantageous outcome in the resulting deal itself.

“We’re at a point where there’s no good tax,” said Joseph J. Thorndike, director of the Tax History Project at the nonprofit group Tax Analysts. “The sort of value proposition of a tax has been destroyed, so nobody wants to say it, nobody wants to say in any fashion that they support it except, because it polls well, taxing the rich.”

Taxes are hardly the only issue going through the partisan spin cycle — and emerging virtually unrecognizable — as the days tick down to an Aug. 2 deadline to raise the federal government’s borrowing limit or face unprecedented default. Take Social Security. Obama is insisting he won’t agree to “slash” benefits — a vague word the White House refuses to define, thus leaving room for benefits to be cut without ever saying it.

Then there’s the debt limit itself. Listen to Republicans, and the whole problem was created by out-of-control spending that now demands to be addressed. Democrats, on the other hand, are more likely to cast the issue as a question of whether or not the U.S. will make good on its obligations.

But it’s on taxes that the rhetoric is the most heated, and the most skewed. Analysts say that in recent decades Republicans have largely succeeded in turning taxes into a dirty word, and the government it pays for is increasingly viewed with disfavor, too. So that even while voters like some of the taxpayer-funded services they get — like Social Security — arguing in favor of taxes per se is a nonstarter.

For opponents, “it’s an easy argument to win because nobody wants to pay higher taxes,” said Brendan Daly, former spokesman to House Democratic Leader Nancy Pelosi and now a public relations executive at Ogilvy Washington.

Proposals under consideration include raising taxes on small business owners and potentially low- and middle-income families. You won’t hear about that from Obama. Instead the president focuses on the very rich, and speaks euphemistically. Here are a few of the phrases the president has used of late to talk about what amounts to raising taxes for some:

— “What we need to do is to have a balanced approach where everything is on the table.”

–“We need to take on spending in the tax code.”

“The tax cuts I’m proposing we get rid of are tax breaks for millionaires and billionaires; tax breaks for oil companies and hedge fund managers and corporate jet owners.”

–“You can’t reduce the deficit to the levels that it needs to be reduced without having some revenue in the mix.”

And here’s how Republicans respond:

–“Tax hikes on families and job creators would only make things worse.” — House Speaker John Boehner.

–“The focus for us is to make sure that we are not increasing taxes on individuals who are the job creators, and like it or not, the job creators are those who can be successful in a small business context.” — House Majority Leader Eric Cantor.

–“Democrats seem to think the solution to our debt crisis is to ask taxpayers and struggling businesses to reward their economic stewardship with even more money to spend as they please.” — Senate Minority Leader Mitch McConnell.

Bilderberg Attendee, Bill Clinton, has a new Plan to solve Debt problem

Wait no, it is the same old solution: Taxing the people to death.

ABC
June 30, 2011

Former President Bill Clinton sees a possible way past the bipartisan impasse over raising the debt limit: agree to cut spending AND raise taxes, but do neither until later, after the economy improves.

“If they [the Republicans] said, look, that now is not the time for big tax increases to harm the recovery, they would be right,” Clinton told ABC News in an exclusive interview at the Clinton Global Initiative America conference in Chicago. “But it’s also right to say that now’s not the time for big spending cuts.

“What I’d like to see them do is agree on the outlines of a 10-year plan and agree not to start either the revenue hikes or the spending cuts until we’ve got this recovery underway,” Clinton added. “The confidence that the Republicans say would be given to investors with a budget plan, they’d get whether we started this year or next year or the year after that, for that matter.”

For the first time, the former president is focusing his Clinton Global Initiative on creating jobs here in the United States. He suggested waiting for the recovery to take hold before pushing spending cuts and tax increases will make the issues clearer.

“We’ve got to get the jobs back in this economy again,” Clinton said. “The more people we get going back to work, the more businesses we start, that’ll bring up the revenue flow, and it will cut down on the expenses. Then, we’ll see what the real dimensions of our problem are.”

Unfortunately, however, Clinton fears Republicans’ “ideological conviction” about never raising taxes recalls the lead-up to government shutdowns in the ’90s, adding that the pressure on GOP candidates to toe the ideological line could hamstring their bids to unseat President Obama.

“They were in a similar anti-government fever, anti-tax fever in 1995 until, you know, the struggle went on for a year and they shut the government down twice,” Clinton said. “The public made a judgment that that was not right. And then we finally broke through. It wound up with the balanced budget act and forced surpluses and real prosperity.”

Could the dispute this time push past the Aug. 2 deadline when, officials say, failing to raise the nation’s debt ceiling could lead to America defaulting on its loans? Clinton didn’t discount the possibility.

“When I passed my budget in 1993, they routinely said it would bring on a terrible recession, [that] it was the end of capitalism as we knew it,” he said. “And we had the best eight years in our history. But they just kept saying it. You’ve got to give them credit. The evidence doesn’t deter them. … It’s an ideological conviction. So, I don’t know that it can be resolved until there’s some break in the action.”

Bill Clinton Expects Obama Re-Election: Here’s Why

Public opinion, Clinton said, swung against the Republicans when they pushed their anti-tax arguments over the line in the mid-1990s. But the possibility of the same thing happening again isn’t the whole reason he believes that President Obama will be elected to a second term in 2012.

“I’ll be surprised if he’s not reelected,” he said. “I’ve always thought he would be.”

For one thing, Clinton believes the economy will be better by Election Day than it is now, though unemployment still will be relatively high and the improvement in the economy won’t be as dramatic as the emergence from a shallower recession during his first four years as president.

“The circumstances are different,” Clinton said. “When President Obama took office, we were in the midst of avoiding having a financial collapse turn into a depression. So, the unemployment rate was higher and people were scared to death about what was going to happen. The so-called stimulus bill actually outperformed expectations, not underperformed, but it wasn’t big enough to lift this whole economy out of the hole it was in. The auto restructuring is working. And I think he’ll be able to point to that.”

He also believes whichever Republican gets nominated to face Obama will get boxed in by ideology.

“Since they, apparently, ideologically, will not permit their candidates to do some of the things that would be most effective in creating jobs and in balancing budget, I just don’t think they’ll be able to get away with what they got away with in the election in 2010,” Clinton said. “You won’t just be able to say, ‘Vote for me, I’m the non-Obama.’ I think he’s going to be able to point to a lot of very specific things that are better. I think that he’s going to be able to convince people that it takes a little longer after that kind of collapse to recover. It took Japan a decade to recover. … We’re coming back quicker than that.”

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