It was nearly 30 years ago, in the aftermath of the 1984 election, as pundits interpreted the presidential race, when the specter emerged.
Democratic candidate Walter Mondale lost badly, and many analysts said one major reason why was his statement on taxes: “Mr. Reagan will raise taxes, and so will I. He won’t tell you. I just did.”
In predicting policy, Mondale was absolutely right. President Ronald Reagan did raise taxes.
But the political lesson stuck. It would be political suicide for a political candidate to say he or she favored raising taxes.
Now, this bit of common wisdom, this ghost of campaigns past, is ready to vanish, dispersing like smoke.
For two presidential elections in a row, the winner called for higher taxes on upper incomes, along with lower taxes on the middle class. In 2012, accepting his party’s nomination, Barack Obama said he wanted, “the wealthiest households to pay higher taxes on incomes over $250,000, the same rate we had when Bill Clinton was president.”
Gov. Mitt Romney, his vice-presidential pick Paul Ryan, and the entire Republican party, strongly disagreed with Obama’s tax plan. Republicans framed the choice as epochal, claiming that restoring Clinton-era top rates was class warfare that would undermine free enterprise. And, in his convention speech, Ryan said, “We want this debate. We will win this debate.”
In response to this lively debate and, despite laws and administrative decisions that made it harder to vote in some key states, more people voted in swing states than did in 2008.
Ultimately not only did President Obama win 51-47 percent, with an Electoral College margin of 332-206, and a popular vote margin of more than 4.5 million votes, but Democrats also gained seats in the House and the Senate. While Democrats don’t hold a majority in the House of Representatives, they won nearly 1 million more votes than Republican House candidates.
In Maine, after campaigning against tax cuts that most benefited upper income individuals, Democrats took back both houses of the Legislature. (Maine Republicans then staked out a far-right position with a new party chair who has claimed Obamacare has death panels).
Under Republican policies, resources were redistributed upward and Obama proposals would reverse the flow.
Now President Obama has one huge advantage: The Bush tax cuts are all expiring at the end of the year.
After George W. Bush’s policy sunsets, Obama would implement a federal income tax cut for 98 percent. Only 2 percent would have increased taxes on part of their income.
Under the Obama plan, everyone will retain a tax cut on taxable incomes up to $250,000 a year. Because this is a marginal tax, people with $270,000 a year of taxable income would pay more just on the $20,000 above $250,000. If the rate went from 36 percent to 39 percent on that $20,000 portion, this means $600 more in federal income taxes.
Raising this top rate is a straightforward approach and, compared to reducing deductions, a higher rate would be harder for lobbyists to reverse.
At this decision point, most Americans want Bush’s tax policy replaced with Obama’s tax policies.
In an opinion study released last week, “6-in-10 Americans support raising the marginal tax rate on income above $250,000, according to a Washington Post/ABC poll. Only 37 percent would oppose a tax hike. Seventy-three percent of Democrats and 63 percent of independents support such a move, while 59 percent of Republicans oppose it. Even those making over $100,000 a year support a hike, 57 percent to 42 percent.”
Americans want what taxes pay for: health care, environmental protection, national security, research, infrastructure, college loans and more.
Some have proposed reducing the deficit by raising the Medicare eligibility age. This is unwanted and not needed. Far more Americans want Medicare extended to people younger than 65 than think people should have to wait until 67 for Medicare. Over ten years, this would reduce costs by $114 billion, much less than the $1.6 trillion brought in by the Obama tax plan. And just last year, as the economy grew, the deficit shrunk by $217 billion.
Many issues and dynamics were important this year. But choices on taxes and spending were front and center. Looking over a longer time span, in five of the last six presidential elections, Republican presidential candidates, who opposed all tax increases, lost the popular vote.
Surely that record soundly vanquishes the apparition of tax politics past.
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