Obama’s mandate: tax increase on rich

By Drew Lieberman and Andrew Baumann
November 16, 2012

Republican leaders such as Grover Norquist and Senate Minority Leader Mitch McConnell (R-Ky.) continue to strike a hard line on taxes and revenues, “warning” President Barack Obama that the GOP will not negotiate or compromise when it comes to tax policy and deficit reduction.

From an electoral politics standpoint, the Democrats should “have at it.”

As the election made clear, this policy is out of step with voters. Obama made raising taxes on people making more than $250,000 a year a centerpiece of his economic message – something he emphasized in his recent press conference – and he was rewarded with a resounding victory. Voters also handed Democrats an increased Senate majority, where the tax debate played out front-and-center in many campaigns.

This theme echoed through state politics as well. Voters in California, for example, passed Governor Jerry Brown’s plan to fund K-12 public schools through a revenue increase that comes from the highest earners.

Strikingly, on taxes – an issue long considered Republican terrain – Obama actually held a 46 – 44 percent advantage over GOP presidential nominee Mitt Romney among voters, according to our Democracy Corps/Campaign for America’s Future post-election survey.

Further, in our post-election survey of the presidential and Senate battleground states conducted for a coalition of environmental groups, nearly a quarter of swing state voters said the top reason for opposing Romney (22 percent) and Senate Republicans (24 percent) was their support for giving more tax breaks to millionaires while raising taxes on the middle class. An additional 18 percent said their top reason to oppose Republicans was their backing of tax breaks for companies that outsource jobs.

In addition, national exit polls show that a strong majority of 60 percent to 35 percent of voters support raising taxes on Americans making more than $250,000. Moreover, Gallup reports that support for tax increases as part of a budget deal is rising. Just 10 percent of Americans believe the deficit should be tackled with only spending cuts, down 10 points since last year. (By comparison, 56 percent believe such a deal should include at least half tax increases.)

The Republican Party’s determination to protect tax breaks for the wealthy, the big corporations and the special interests at the expense of the middle class will not only lead the country toward the fiscal cliff, it will likely serve to further disconnect the GOP from most of America.

Our post-election Democracy Corps polling looked specifically at different policies in relation to the coming negotiations about the fiscal cliff. And the result highlights strong support for the president’s position on taxes:

  • 75 percent of voters say “creating a higher tax rate on those earning over $1 million a year” is an acceptable policy, the second-highest rating of the 18 policies we tested.
  • 70 percent say “raising taxes on the richest 2 percent, while keeping taxes low for middle class and working people” is acceptable.
  •  More strikingly, 68 percent find “not raising taxes on the rich” an unacceptable option, with more than half the electorate feeling that way strongly. Let us say that again:  More than two-thirds of voters say that it would be unacceptable for a deal on the fiscal cliff to NOT include higher taxes on the wealthy.
  •  62 percent of voters say that any long-term deficit deal should get at least one-third of its deficit reduction from new tax revenue.

One of the most remarkable aspects of this polling is how Republican lawmakers such as McConnell are not only out of touch with Democrats and independents, but also out of touch with the Republican voters they claim to represent. Indeed, even a 56 percent majority of Republicans say that raising taxes on millionaires would be an acceptable part of a budget deal on the fiscal cliff.

There is clearly a mandate on taxes from this election. It’s just not the one Republicans are trying to convince themselves of.

The terms of the debate are now very different from 2010. Obama has all the leverage, while the Republicans may only dig themselves an even bigger hole by doubling down on policies that voters have soundly rejected.

PHOTO: President Obama hosts a bipartisan meeting to discuss the economy with Congressional leaders in the White House, Nov. 16, 2012.  REUTERS/Larry Downing

 

 

 

 

32 comments

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Obama is right on this. These tax breaks for the wealthy have been in effect for over 10 years now. If they are so effective at creating jobs…. where are those jobs.

Time to let them expire and move on.

Posted by AlkalineState | Report as abusive

A 51% blue state mandate to cram financial calamity down 49% red state throats? i.e. you must pay for my free stuff. Forget it. Red states will revolt. A great article by Jack Worthington “Secession in Europe and the US” http://jackworthington.wordpress.com/201 2/11/15/secession-in-europe-and-the-us/

Posted by sarkozyrocks | Report as abusive

“Further, in our post-election survey of the presidential and Senate battleground states conducted for a coalition of environmental groups, nearly a quarter of swing state voters said the top reason for opposing Romney (22 percent) and Senate Republicans (24 percent) was their support for giving more tax breaks to millionaires while raising taxes on the middle class. An additional 18 percent said their top reason to oppose Republicans was their backing of tax breaks for companies that outsource jobs.”

So what this should tell every reader of this article is that the vast majority of Americans did not understand either party’s tax policies going into this election. This election was nothing more than a testament to the failed education system of the United States. Only an educated society could re-elect such a failure, and also think that the Republican platform is to increase tax breaks for the wealthy or increase taxes on the middle class. This is fundamentally not accurate. An educated society would understand that increasing taxes will not do anything to address the fact that the federal government needs to stop spending!!!

Posted by next205 | Report as abusive

Even if we let the “Bush tax cuts” expire and dive off the fiscal cliff, it will hardly put a dent in the deficit. We should embrace the Clinton era tax rates for the simple reason that our economy was relatively prosperous then. Maybe it will work again. Besides, the Fed is doing a wonderful job buying up our debt (treasury auctions) which is helping to keep interest rates ridculously low. I just don’t see what all the fuss is about. Don’t worry, be happy!

Posted by gordo53 | Report as abusive

Obviously we cannot have austerity until the recession is over. The biggest and most dangerous debt comes from importing more than we export, that debt we owe to outsiders. No one is talking about taking control or how much we import and growing export industries.

We need revenue to pay off debt. If we want tax unearned wealth the place to do it is estate and gift taxes (inheritance). Inheritance is a motivator or earned and is the opposite of equal opportunity. High income may be a result of high service to the rest of us such as a highly skilled surgeon. But it is desirable to tax income of any sin industry that not now taxed like junk food.

PS I do not have a high income.

Posted by Samrch | Report as abusive

sarkozyrocks – The Red States cannot afford to secede, as they constitute the Confederacy of Takers that receive more federal funds than they pay in taxes. The Blue States constitute the Union of Makers that receive less federal funds than they pay in taxes. The Blue States are thus paying for the Red States’ free stuff.

Posted by MoBioph | Report as abusive

@MoBiorph: Fact: Utah (the reddest state) has among the best finances of any state in the country; whereas California (the bluest state) has among the worst finances. (How does that fit in with your claims?)

@sarkozyrocks: We’ve been going through that “financial calamity” you mentioned for the last ten years, in slow motion (with a major stock-market & housing-market correction late in 2008 & early in 2009) — and that too, during a period with historically low rates of tax. Grover Norquist’s claims have been blown out of the water for anyone reading the real numbers. The economic policies you favor have demonstrated an undeniable tendency to create economic turbulence and reduce economic growth. I’m backing @AlkalineState and @gordo53 on this… In recent decades, every time America has implemented the kind of policies Obama is now proposing, America’s GDP and employment levels have INCREASED, sustainably, over an extended period of time. (Therefore, comment by @Samrch is mistaken.)

Take a look at the numbers for yourself. “Reaganomics and Prudent Taxation”. Article contains graphs & references to official data and key historical events…

Posted by matthewslyman | Report as abusive

One more FACT… The reason for California’s terrible financial situation is largely because of a low-tax hard-line Republican faction that implemented a “no tax rise” constitutional amendment and then refused to support dropping that amendment when the economy tanked (all the while being in bed with public safety unions for perpetual unfunded increases to safety workers’ pay). Unsurprisingly, California is now a one-party state… Voters have punished at the polls the party that created this mess — Democrats now have 2/3 majorities in California! IS THAT what Republicans want nationally?

http://blogs.reuters.com/great-debate/20 12/11/06/can-one-party-rule-fix-californ ia/

http://www.reuters.com/article/2012/11/1 3/us-bernardino-bankrupt-idUSBRE8AC0HP20 121113

Posted by matthewslyman | Report as abusive

The fact that the debate hinges on this issue is an indication of the disfunction of our government. This is pure politics at a time when we desperately need substantive legislation to reign in our out of control spending. The deficit and debt are the biggest threats to our liberty and our way of life. The Rs won’t cut military spending (they want an increase!) and the Ds won’t cut entitlements. The clowns in Washington will never learn as long as we keep voting for incumbents. Soon the laws of economics will catch up with us and to be sure it won’t be pretty. The political class in this country is nothing but a gaggle of self absorbed parasites. They have led our nation down a path to economic destruction that is now almost certainly unavoidable.

Posted by gordo53 | Report as abusive

Let’s remember that the “income tax” that you pay with your 1040 is not the only income tax in America. Social security tax commonly called “payroll tax” is also part of the income tax picture. Social security is in more trouble than the government as a whole. The payroll tax are the biggest loophole for the rich. Let’s start charging payroll tax on ALL EARNED INCOME including most especially CEO bonuses and stock options and hedge fund “carried interests.”

“The Republican Party’s determination to protect tax breaks for the wealthy, the big corporations and the special interests at the expense of the middle class will not only lead the country toward the fiscal cliff, it will likely serve to further disconnect the GOP from most of America.” I just had to repeat that.

Posted by QuietThinker | Report as abusive

As someone who has worked my way up through the tax brackets to the highest tax bracket I am continually astonished that taxes do not keep increasing after you earn over $250k…Effectively the more I earn, the more of a tax break I get. Why are there not increasing thresholds at $500k, $750k and $1m. The whole tax code does not even ackolwlege that higher earners even exist. As a small business owner this would make me want to keep my own earnings lower, so I would likely invest even more in my business. I would likely not run it as lean as I do right now due to the recent economic downturn. As I see it I would hire additional administrative help and support staff, upgrade equipment. So I am not sure that the Government would get significantly more of my earnings (to give to people who want free stuff!)….but would be good for the economy.

Posted by mj12 | Report as abusive

In the USA, state and federal finances are different creatures. (You’re from the UK, I gather.) So, a state may struggle to put its finances in order, yet may generate more federal revenues than it receives. Obviously, it’s a cinch for a state to keep its finances in order if it receives more federal revenues than it generates. Other than that, you’re “spot on,” as y’all say.

Posted by MoBioph | Report as abusive

It seems that the solution to income equality is always to tax the massive amounts of wealth in order to appropriate it to those less fortunate. But of course we ignore the system by which they amassed those great fortunes. Monopoly and Privilege will continue to make the rich richer and the poor poorer until it is dealt with. The “who gets the surplus wealth that labor produces?” question won’t be answered as long as compulsion exists in government protection of the means of amassing this wealth. In a pre-internet world it wasn’t as easy to just outsource jobs as it is now. I don’t think increasing taxes on the most wealthy will do anything except cause them to leave the country to protect their wealth, which is what so many seem to be doing. I’m also amazed at the people who consider taxation anything other than the very theft that enables the system they complain about to operate, and then call it social revenue.

Posted by LysanderTucker | Report as abusive

Moving up financially is possible only if you are entrepreneur.

Even the workers who manage the enterprise like CEO are not supposed to be financially up as they have become…. after all they too no risk .. no consequences .. yet made themselves rich and wealthy coz they think otherwise a business will fail…

Managing a product which become necessity for mankind is not entrepreneurship ; the one who made the product available and or is making the product is the one destined … rest are fleecers who are enjoying the benefits of his creation…

The point is if workers extract more wages and benefits … it will ultimately result into inflation and they will end up paying more for their same products and services…

This rises the base of cost .. like US provide food stamp to a family of four where income is less than 1700 USD … in other words US govt have reason to believe that a family if earns less than 1700 USD a month .. may not be able to buy food and hence govt has to provide them with food..

A family of 4 in India or in China or in Thailand or in Indonesia or in many country of Africa… that is more than 60pc of world population ; can live a decent life can fed themselves .. can educate their children can buy a house and pay for it … can afford medical insurance…

and then if US with almost 50k USD as per capita income record 2pc as inflation …. it raises prices and cost of living further by 1k … this makes the life a bit more difficult once more….

Greed is not always good. it at times kills the system.. and situation like Greece , Spain ,etc occurs…. USA is running coz it is still a Global reserve currency else …..

Posted by Spiritual_Mind1 | Report as abusive

The Republican party, now the Tea Party, has become dysfunctional, confused and a big mess. It has come to be strongly associated with the rich, elite and mega corporations that have no alliance with the American worker, they will pull their profits regardless their destructive means.
The Banksters, elite & mega corporations are thriving with conning the civil-war-era-mentality republicans into a long ago gone reality.
Just think of how badly their judgement is by the astronomical amount of money they threw at Romney campaign.

These are the same entities that we have trusted in making prudent judgements with our personal investments.

Posted by EthicsIntl | Report as abusive

It is the use of those taxes that seem to be troubling me. Nothing to show for it, and the wealthy corporate owners do give to charities and help build hospitals, and get huge tax write offs as well. There is off shore money being hidden from taxation, and this is one of the biggest problems we have: why does the government think they own any of our money if this is a free society? I think it is time to re think what our government means to us, and what we expect it to be.

Posted by susette | Report as abusive

The United States has one fiscal issue – government spending in excess of the revenue. This issue is a combination of bad policy and a changing demographic – as the population ages, it costs more to support them.

In years past, the assumptions were essentially that the makeup of the American working public would stay the same – the ratio of retired to workers would be in a balanced state where the “pay as you go” method would work. It won’t. The Social Security system will go bankrupt. Benefits must be reduced.

Military spending is too high. It must be reduced.

Health care spending is too high. It must be reduced.

Unfortunately, taxes need to go up. AMT needs to go away, and investment-based earnings need to be taxed at the same rate as regular earning. Painful, but necessary. Unfortunately Mr. Obama’s $1.6 trillion over 10 years is a drop in the bucket, he’d need to generate 5 times that much to balance the budget.

But at the same time, the entitlement programs and tax-funded indirect welfare need to expire, too. The earned-income credit, for example, needs to go away.

Sorry folks, this isn’t class warfare, isn’t not the haves against the have-nots – it’s math.

And if you are among the alarmingly high number of people who don’t have a high-school education and can’t understand the math – please for the sake of our country, make sure your children graduate.

Posted by MikeReid | Report as abusive

Obama said he was going to do this…. and now he’s doing it. I’m glad.

Posted by AlkalineState | Report as abusive

It is interesting how 50.66% of the vote is a “mandate” – particularly when no previous president re-elected to a 2d term prior to this has seen his electoral support go down from the first time. A win is a win, but hardly a mandate. Polls show that majorities think taxes should be raised on someone else? That’s a big surprise.

Posted by SayHey | Report as abusive

Who’s talking mandate? I’m talking President.

And not President of the 9 Wives Country Club and Homeowners Association in Park City, Utah either. The real President. Obama has a job to do and he’s doing it.

Posted by AlkalineState | Report as abusive

Polls show that significantly more folks than voted for Obama want the wealthy to pay more taxes. As the first poster noted, these tax breaks for the wealthy have been in effect for more than 10 years and have not been creating jobs.

Posted by PCScipio | Report as abusive

Alkaline
Lets check back on how this impacts the ecomony. It will be a negative as the positvies will not out weigh the negatives. It is a drop in the bucket covering the deficit.

Posted by Crash866 | Report as abusive

This is a tactic to tantalize all of the ideologues of Democrat party – as the party of fairness. Both parties are a joke when they both put our nation’s future in jeopardy by playing with the tax code as a way to payback their donors. Obama’s supporters and that is what they are – are very excited by bright shiny objects – that little socialist tinkerers play with. There isn’t anything government does well – houses of Congress have colluded to spend – as a way of holding power, perks and patronage. There is a rare politician that understands the gravity of their position an chooses to do the right thing. Raising taxes on the wealthy – is OK if they are going to roll the spending back and move the country to sound financial footing. How can you trust anyone who won’t make a budget to right any financial ship?

Posted by xit007 | Report as abusive

xit007 writes: “Raising taxes on the wealthy – is OK if they are going to roll the spending back…”

Not sure what you’re complaining about. What you’ve just described is the Simpson-Bowles plan. Or by its more recent, media-driven name, the ‘fiscal cliff.’

There is no cliff, sport. The big thing we’re supposed to be scared of is returning taxes to what they were in the 90′s and making spending cuts across the board. But it’s not scary and it does not ruin economies. The economy of the 90′s was actually pretty good.

Posted by AlkalineState | Report as abusive

We would all be in better shape if oil prices had stayed low and we didn’t have a 10 year war.

Republican or Democrat – all their plans and ideas pale when it comes to these 2 huge factors.

Will likely take us another decade to recover.

Posted by Butch_from_PA | Report as abusive

ALkaline – whose scared – I think that is a great idea but you are going to find there is no will to stop government spending…You can’t have your cake and eat it too…Sure I think the Republicans are foolish for defending a 4% tax increase on the wealthiest. They have had worse days of taxation. But the folly comes when both parties need to shut down the over spending bureaucracies in Washington. Both parties are takers – when they spend beyond recovery. Kicking the can down road is not a solution. Did you see a budget in the last 4 years – that tells you there is no one at the helm of this ship….

Posted by xit007 | Report as abusive

I’ve got no problem with raising the tax rate on the rich, however even if you put it back to where it was under Clinton, you still on raise 87 billion a year. Where are you democraps going to come up with the other $1 trillion in new spending the idiot-in-chief wants to do. That 87 billion will also only cover the interest on the CURRENT NATIONAL DEBIT for 10 days! We need real lasting cost cutting (ACROSS THE BOARD)! Entitlements included.
As far as any comments about the payroll tax. Get rid of it. All it is doing is taking money out of the social security fund. We alread pay out dollars in social security to 4 people for every 1 person that pays into it now.
And last but not least, since democrpas seem to like to talk about the rich not paying “their fair share” of income tax, how about the bottem 47% who PAY NO FEDERAL INCOME TAX. What is their fair share? And please don’t harp on me about all the other taxes they are paying. We all pay those too. Democraps are focusing on INCOME TAX!

Posted by Dave6280 | Report as abusive

we may not need tax increases or decreases if we can just stop the DC crowd from thinking this country needs too sent trillions to other countries too make sure they all have the latest in iphones flat screen tv’s in every home. Time to take care of this countries infrastructure and stay out of the rest of the worlds troubles. It doesn’t seem too make any difference if you tax the rich or poor MORE, it’s just never enough. What’s next? Tax that little bit of air we breath. Come on folks, Keep picking on the rich, they close up shop, leave town, nothing left. I’m retired and not rich, but you need someone around to take the risk of opening a business and that takes money and actually might put some of those that complain to work, if they actually can get out of bed and look for those jobs. Ten years past retirement and I still can find work. HUMMMMMM

Posted by bd38 | Report as abusive

Just because some poll says that “x” feel that doing something is right does not make it good policy. With respect to the questions at hand, how many voters actually know wha they are talking about? How many know what percentage of all taxes the top 2% pay? The fact is most have no idea and most do not have any clue how the economy works? We have an ignorant electorate, pure and simple. The president has made it his policy to prey on this electorate stirring up class divisions in his quest to redistribute wealth and income. He has no idea himself how business works because he never did anything in the private sector. Further he is dogmatic in his pursuit of social justice. Well, of he wants an example of that pursuit in real time, he can look at western Eirope. It is in decline and will be for years to come. The end game of social justice is bankruptcy as you run out of other peoples money to distribute. Margaret Thatcher was right and is turning in her grave as we speak. Journalists like you only perpetuate the problem with your complete ignorance.

Posted by emmf4000 | Report as abusive

Posted by emmf4000
‘We have an ignorant electorate, pure and simple. The president has made it his policy to prey on this electorate stirring up class divisions in his quest to redistribute wealth and income. He has no idea himself how business works because he never did anything in the private sector’

You win the excellence in insight award….I completely agree and have witnessed this phenomena in our local community. I have said ‘how do you get a community organizer to think about anything other than using government money for his projects – he could care less about the economy or how it works. Add to your narrative – a group of whiners who bellyache every time there is a bump in the road or their ideology is not fostered. What a mess – unfortunately it might take a taste of their own policies to turn things around. I thought there was more intelligence in the general populace – but our education system is a victim of the liberal bureaucracy and all they whine about is more money.. there’s a pattern here.

Posted by xit007 | Report as abusive

I guess the authors of this piece doesn’t realize that Republicans kept the US House and Obama only won by 3 points.

Posted by bjoh249 | Report as abusive