Why the GOP defends the wealthy
By David Callahan
The opinions expressed are his own.
With polls showing strong public support for tax hikes on the rich, Republicans should hardly relish a fight with President Obama over “class warfare.” And yet, for weeks, GOP leaders have been bashing the White House for a tax plan that affects just 2 percent of U.S. households and lets the rest of us off the hook.
How is this smart politics?
Maybe it isn’t, but sticking up for the rich is more popular than one might think – and not just in Palm Beach. America is a famously aspirational country and Republicans have long sought to ally themselves with that ethos. If you want to make a pile of money, the GOP is the party for you – or so they say. It vows to clear away barriers to getting rich, like pesky employer healthcare mandates and environmental rules, and let you keep more of your winnings.
Meanwhile, the conservative story goes, all the left cares about is social leveling. Democrats want to punish the successful in order to subsidize the losers, leading us toward a dreary future in which America’s hot shots no longer even make an effort and everyone ends up poorer. As Fox News puts it, Obama favors “takers” over “makers.”
This is nonsense, of course. The President merely wants to go back to the tax rates of the 1990s, a boom decade hardly remembered for its creeping socialism. And one of his main reasons for hiking taxes on the wealthy is precisely to keep the American dream alive, avoiding deep cuts to education, infrastructure and other keys to our long-term prosperity. What’s more, the wealthy have been pulling up the ladder behind them for years – they’re the real experts at class warfare, according to Warren Buffett – and it’s about time that we had a president who says that this is not okay. So far, most Americans would seem to agree.
Still, singling out the wealthy for higher taxes does carry risks. The deep-seated American values of aspiration and economic freedom have a funny way of trumping rationality in debates over fiscal policy. Let’s not forget how George W. Bush’s massive tax cuts – which shoveled huge gains to high earners and chump change to everyone else – proved strangely impervious to criticism, starting with Al Gore’s repeated attacks during the 2000 campaign. Like Obama, Gore imagined that fiscal policy was about the “math” of who should logically pay what. John Kerry made the same mistake in 2004.
No, the tax debate is not about math. It is about which policies best advance the American desire to get ahead economically. Progressive message groups, such as Media Matters, argue that Democrats should justify tax hikes on the rich as a way to preserve crucial social insurance programs like Medicare and Social Security. That seems like bad advice, playing directly into the “makers vs. takers” framework. Shared responsibility may be another loser, since it prioritizes the common good over the individual – a hierarchy that Americans aren’t crazy about.
Instead, the President is on the right track when he explains why new revenues are needed to create jobs now and also to underwrite future prosperity and upward mobility. The winning message, in effect, is that taxing the rich will give all Americans a better shot at doing well financially – and even will benefit the wealthy themselves. Or, put another way, it takes money to make money.
A big appeal of this argument is that it is true. Everyone, including the rich, will do better in an America with slightly higher tax rates but also more investment in the foundations of long-term growth.
This kind of rap, about “winning the future” and such, may not be red meat for the Democratic base, which is rightly angry at an American upper class that ran the economy into a ditch with its outsized greed and unchecked privilege. But Obama needs more than that base to win in 2012, and also to prevail in fiscal debates today.
The coalition that elected the President in 2008 famously knitted together Americans of modest means and upscale professionals. If Obama scares away the affluent side of this coalition by not clearly siding with their economic aspirations, he’ll not only lose the election, but won’t have the public support he needs to push through his tax plan.
Raising taxes on the rich is the right thing to do. But it will only happen if Democrats show they are for success, not against it.
David Callahan is the author of Fortunes of Change: The Rise of the Liberal Rich and the Remaking of America (Wiley).