See if you can count the straw men CNN erects in three minutes and 23 seconds, in this interview with Rep. Kevin Brady (R-TX). It’s not difficult to lose count, as they come quickly and constantly as Brady rejects the idea that tax increases boost economies. In the end, Brady predicts that Barack Obama will cave on his tax position, but Brady’s not caving on his:
I’ll just pick up a couple of strawmen — first and foremost, that we’ve had tax cuts for ten years for the rich. We cut the tax rate eleven years ago, and then again nine years ago, both of which resulted in a healthy and robust recovery that only got derailed by an unrelated government intervention into the housing markets, which created a massive bubble and nearly crippled the global financial sector. Those rates have been in place for a decade, more or less, unchanged. We haven’t cut anyincome tax rates since then. Changing them upward now would be a tax hike, a reality that the media keeps avoiding by calling it an extension of tax cuts that already took place a decade ago.
Second, Obama hasn’t been “cutting taxes like crazy.” His Making Work Pay cut referenced by one of the hosts amounted to about $8 a week on average for middle-class taxpayers ($16 a week for families), hardly a blip in their tax outlays — and it didn’t do anything to boost the economy. The payroll tax “holiday” got cooked up by both Democrats and Republicans, has been equally ineffective, and in this case actually takes money from the Social Security trust fund that would otherwise have paid for benefits the same workers expect to draw in the future. He also pushed several gimmicky short-term credits like Cash for Clunkers and the homebuyer tax credit that succeeded only in subsidizing purchases that would have taken place anyway, and stealing demand from future quarters.
Otherwise, Obama has spent most of his time hiking taxes through the ObamaCare bill that is packed with massive taxes and fees even apart from the individual mandate that got ruled a tax by the Supreme Court. Those taxes, such as on medical devices and the fees and penalties on employers, will get passed along to consumers in the form of higher prices.
Will Obama cave? Probably, because as I noted earlier, even Democrats refused to go along with this proposal in 2010 and 2011. Politico makes the same point:
Both sides acknowledge that the again impending expiration of the tax cuts, coupled with deep spending cuts set to kick in automatically — the so-called fiscal cliff — is causing uncertainty in financial markets, and could depress already-anemic growth in a still sluggish economy.
But even lading Congressional Democrats, including Sen. Chuck Schumer (D-N.Y.) and House minority leader Nancy Pelosi (D-Calif.), have diverged from what the president is now proposing. They prefer letting the tax cuts lapse only on incomes over $1 million — not $250,000, as the White House has proposed.
What CNN and others should be asking is why Obama will only propose a one-year commitment to the current middle-income tax rates in exchange for a tax hike not even Democrats support. What does Obama plan to do after the one year is up?