Report: Democrats drop demand for new tax on millionaires in payroll tax standoff

posted at 10:00 pm on December 14, 2011 by Allahpundit

Not so much a big win for us as a big loss for them.

Democrats backed away from their demand for higher taxes on millionaires as part of legislation to extend Social Security tax cuts for most Americans on Wednesday as Congress struggled to clear critical year-end bills without triggering a partial government shutdown…

Republicans minimized the significance of the move. “They’re not giving up a whole lot. The tax they wanted to implement on business owners was something that couldn’t pass the House and couldn’t pass the Senate,” McConnell said in a CNBC interview.

Jettisoning the tax could also require Democrats to agree to politically painful savings elsewhere in the budget to replace the estimated $140 billion the tax would have raised over a decade.

In its most recent form, the surtax would have slapped a 1.9 percent tax on income in excess of $1 million, with the proceeds helping pay for the extension of tax cuts for 160 million workers. Senate Democrats have twice forced votes on the proposal in what officials have described as a political maneuver designed to force GOP lawmakers to choose between protecting the wealthy on the one hand and extending tax cuts for millions on the other.

CNN calls it a “major concession,” which is true insofar as this was part of The One’s big populist Elizabeth Warren-esque push against “the one percent” ahead of the election. His base will hate being forced to drop it given how well tax hikes on the rich poll, even though realistically there was no way Democrats were going to walk away from extending a payroll-tax cut for the middle class to try to get Republicans to bend on this. The quid pro quo, I take it, will be the GOP agreeing to drop the Keystone pipeline provision from whatever compromise bill ends up on the House floor. Which means less revenue and fewer jobs in exchange — hopefully — for new spending cuts, or just maybe another hundred billion or so in deficit spending. Doesn’t feel like a major victory, but at least the kabuki phase of these dull negotiations is over.

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Comment pages: 1 2

Look at those dead lifeless eyes. No soul there!!

wkrp-in-cincy on December 15, 2011 at 8:32 AM

I hate compromise with the libs. It gives them a small victory and a lot of inches add up to a mile.

Kissmygrits on December 15, 2011 at 8:36 AM

Government savings, unless from the Defense Budget, are always down the road. Savings which are cancelled as soon as Dems have a chance.

davod on December 15, 2011 at 9:01 AM

How are we going to stop the collapse of our nation? I’m feeling completely defeated and angry at our representatives. Is it time to send a message and begin a third party movement? Is it time for the (R) Party to go the way of the Whigs? I don’t see this government shrinking with the current structure in place. We might as well give the sinking ship to the libs and let it go down quickly, thus letting them take complete blame and then rebuild with a real Limited Government, Constitutional Party.

Decoski on December 15, 2011 at 12:35 AM

That’s what I’ve been wondering. I’m sick of the spineless GOP and the Repub elites.

dominigan on December 15, 2011 at 9:12 AM

I hate compromise with the libs. It gives them a small victory and a lot of inches add up to a mile.

Kissmygrits on December 15, 2011 at 8:36 AM

You’re gonna hate President Mittens with a passion.

angryed on December 15, 2011 at 9:13 AM

I don’t see this government shrinking with the current structure in place. We might as well give the sinking ship to the libs and let it go down quickly, thus letting them take complete blame and then rebuild with a real Limited Government, Constitutional Party.

Decoski on December 15, 2011 at 12:35 AM

Liberals want a sinking ship. When chaos ensues, fascism rises. There will be no rebuilding, no political parties, afterwards.

angryed on December 15, 2011 at 9:15 AM

Does this just mean a littla backbone goes a long way?

JAGonzo on December 15, 2011 at 9:45 AM

How about the GOP doesn’t back down on the Keystone Pipeline.
Forget the politics and the compromising.

The pipeline is the right thing to do. So do it. Get a spine.

tomg51 on December 15, 2011 at 9:46 AM

It should be pretty obvious that the Democrats polled this and found they were losing on the pipeline so they’re working out a deal. If the Republicans were smart, they’d insist on the pipeline and get people working. The Democrats know they won’t have people working, by election time, so they don’t want to pass any Republican plans that will reverse that trend and have Republicans getting credit for it. And Obama has the gall to talk about who’s putting party ahead of country and our illustrious free press lets him get away with it.

bflat879 on December 15, 2011 at 11:35 AM

I find this interesting considering the Republicans were never able to come up with a small business owner who said they wouldn’t hire/would cut jobs because of this tax.

Rainsford on December 15, 2011 at 12:23 PM

If the dems really wanted to tax the rich, they could have done so when they had total control.

jfox21 on December 15, 2011 at 8:03 AM

They need just enough Republicans to join them to deflect the blame or they know they will get killed in the elections.

conservativecaveman on December 15, 2011 at 8:25 AM

Exactly!

jfox21 on December 15, 2011 at 1:16 PM

Obamba will come after the rich and keep coming no matter what. So, if you make over $100K, you’re in his sight. And don’t forget, it’s not one person making $100K, it’s the joint return that counts.

rjulio on December 15, 2011 at 2:51 PM

Comment pages: 1 2