Extreme tax makeover

It’s been said that government should be on the side of the little guy, because the big guys can take care of themselves, and they usually do. But this fall, Republicans have a message for disaffected big guys all across the country: Don’t worry — we’ve got your back.

There’s no other way to explain the GOP’s increasingly extreme tax argument as we head into the midterm elections.

ADVERTISEMENT
It began with the debate over the 2001 Bush tax breaks, which are set to expire at the end of this year. President Obama has called for extending those tax cuts for the first $250,000 of income earned. That means all Americans would benefit. Those making less than a quarter-million dollars a year would keep their tax cuts. And those making more than $250,000 per year would keep paying lower taxes on all the income they earn below that threshold. Seems reasonable.

But that’s not good enough for Washington Republicans. Who will be there to stand up for those hard-pressed American millionaires who would see their taxes rise on income above the quarter-million-dollar mark? The Democrats’ plan would be a disincentive, goes the GOP logic, for the wealthy to continue their hardscrabble lives. It’s only a matter of time before Bill Gates cuts his own pay to $249,999. Who wants the bother of paying higher taxes on any income above that?

To the 2 percent of American taxpayers who fall into this “upper-class squeeze,” there are plenty of Republicans who feel your pain. Last week, Senate Minority Leader Mitch McConnell (R-Ky.) spoke out against the Democrats’ hard-hearted proposal to deny the wealthy the big tax cuts they so richly deserve. “We can’t let the people who’ve been hit hardest by this recession, and who we need to create the jobs that will get us out of it, foot the bill for the Democrats’ two-year adventure in expanded government,” he declared from the Senate floor.

It’s true that extending the Bush tax cuts on income over $250,000 would blow a hole in the deficit, adding $700 billion to our debt to countries like China. But going a little further into the red is the least we can do to assist struggling hedge fund managers who sit at their kitchen table each month having to make the tough decision between paying the mortgage on their third summer home or paying off their American Express black card.

McConnell’s problem is that he isn’t going far enough. Republican Rep. Darrell Issa (Calif.) — whose net worth of $160 million makes him the second-richest member of Congress — is keeping the heat on his fellow advocates for the affluent. Issa believes the current tax rate for the wealthiest Americans — 35 percent — not only shouldn’t be increased, it should be slashed dramatically. “We were better off at 28 percent under Reagan than we’ve been since,” Issa told Fox News this week. So buck up, billionaires! Hope is on the way.

Now, Issa isn’t being unreasonable. He knows that lowering the top tax rate isn’t an immediate boon to every American. “One of the things that you lose in the debate is most people don’t make over a quarter-million dollars a year,” he said. “But a great many people once in their lifetime will sort of win the lottery.” Of course! The Powerball Plan. How could Democrats turn their backs on the millions of Americans who are ever so close to seeing their lucky numbers hit?

But the issue with Issa is that he sets his sights too low. Republican congressional candidate Ben Lange (Iowa) has a better idea: lower the tax rate on the super-rich to something a little more equitable than the oppressive Reagan-era level. Lange would reduce the top bracket to just 25 percent. So if you are one of those ordinary, hardworking Americans who earned a mere billion dollars in 2010, there’s light at the end of the tunnel. Under Lange’s plan, you would get to keep an extra hundred million dollars, making it a little easier to pay the electric bill of the small island you own in the Caribbean.

For the big guys struggling to take care of themselves in this penny-pinching environment, fear not. Congressional Republicans are here to help.

Del Cecato is a partner at AKPD Message and Media, the political consulting firm founded by David Axelrod in 1985. He served as media adviser and admaker for Obama for America and Obama-Biden 2008.