Wednesday, December 08, 2010

Tax derangement syndrome

The debate over whether to extend the Bush tax cuts for the top bracket provides an eye-opening glimpse into the mentality of the Democratic base. Since taking office, President Obama has made several moves which one could have reasonably expected to have upset key party constituencies such as foreign policy doves (increased military activity in Afghanistan, sticking with the Bush administration's drawdown schedule in Iraq rather than an acceleration) and civil libertarians (extension of Patriot Act, use of military tribunals, failure to close Guantanamo Bay, TSA insanity, proceeding apace with the drug war, increasing deportations of illegal immigrants).

Yet despite such moves, criticism has typically been restricted to Glenn Greenwald and a handful of others on the left, and the president maintains a 79-16 approve/disapprove split among self-identified liberals.

In stunning contrast to the scattered grumbling which has greeted these Obama administration policies, reaction among the base to news that the White House has endorsed a two year extension of tax cuts, which include the top bracket, is nothing short of outrage. The fury has reached such a fever pitch that there is even chatter of the president facing a primary challenge (although I highly doubt this will occur). While the continuation of the Bush administration's approach on any number of social or foreign policy areas has elicited a collective shrug (which shows that such issues are either something most Democrats only care about when a Republican occupies the White House or are a pretty low priority), the prospect of failing to raise taxes on those making $250,000+ has sent the base into a lather.

The economics don't make any sense either, as Joe Weisenthal astutely observes:
The Democrats, it would appear, would are willing to risk rising middle-class taxes during a recession -- about as anti-stimulative as it gets -- if it means the wealthy aren't seeing taxes rise during this period. That's how devoted they are to higher taxes.

Look, you can make an argument that taxes on the rich ought to be raised from a deficit standpoint. And you can argue that tax cuts for the rich have virtually no stimulative value. But it's implausible to argue that the economy would be strengthened by higher taxes on the rich, unless you use the farcical deficit hawk logic that somehow it's high deficits causing the economy to be weak, a line of logic we know that no Democrats accept.
As Weisenthal points out, we know that opposition to the tax move is not motivated by concerns over the deficit. After all, this is the same crowd which wholeheartedly welcomed the $800+ billion stimulus package and seems to have no problem with continued tax cuts for all other income brackets even though their revenue cost is much greater than that of the top bracket. Suffice to say, they haven't exactly been leading the charge to reign in spending to reduce the deficit either.

It's a mind-boggling situation. Those making $250,000+ are not being offered a tax cut. They will pay no less tax next year than they did this year. And yet Democrats seethe over the fact that the marginal tax they face, already greater than one-third of income, will not be increased to nearly 40 percent. And at a time of high unemployment and economic weakness to boot!

Nothing can explain this other than an irrational, borderline pathological dislike of the rich. It's policy by emotion. In the apparent minds of many Democrats, the upper middle class and rich reached their station in life by trampling over others. Deep suspicion is harbored towards the free market, which is viewed as an immoral, law-of-the-jungle environment (ameliorated only by government regulation) where advancement is obtained by holding someone else back. One person's gain is another's loss, and one person's joy another's misery. Atonement and the path to salvation lies in handing over huge amounts of one's ill-gotten gains to the morally pure inhabitants of the halls of government, wisely redistributing these sums in order to foster the creation of a more perfect world.

Let's stop pretending that the Democratic position on taxes is rooted in economic thinking or any consideration other than class warfare.

Update: Similar points from Peter Wehner.

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