By Bernie Becker - 04/25/11 10:00 AM EDT
Congressional Democrats say they will aggressively push to allow taxes to rise for the wealthiest Americans — a move they say is not only widely popular, but sets up a stark contrast with Republicans who want to keep the tax rates the same but make broad changes to entitlement programs.
With the Bush-era tax rates now set to expire at the end of next year, some question remains about whether Democrats on Capitol Hill will coalesce behind a plan for higher taxes for annual incomes above $250,000 for families or income north of $1 million.
The effort comes as the White House and Congress are beginning to hash out plans to cut the deficit and control the nation's debt level. Republicans have proposed doing so by cutting spending and reforming entitlement programs, while Democrats have said that the government must also generate more revenue.
President Obama has thrown his weight behind the $250,000 number for higher tax rates, and several new polls also indicate that the idea resonates with the public. Some of that polling also found deep opposition to cuts to Medicare and Medicaid, programs that would undergo vast changes if the House Republicans' fiscal 2012 budget were to be enacted.
“While Republicans are gutting Medicare and Medicaid with one hand, they are handing out tax subsidies for big oil companies and making tax cuts for the wealthy permanent with the other hand,” Rep. James Clyburn of South Carolina, the No. 3 House Democrat, said this month about the Republican budget, which was largely crafted by Rep. Paul Ryan (R-Wis.).
Still, some Democratic strategists have suggested that top policymakers in their party could push what they see as an advantage on taxes even harder.
Some polling last year suggested that the public supported increased taxes at the highest income levels, but that didn’t stop the White House from making a deal during the lame-duck session of Congress to extend the Bush tax rates for all taxpayers through 2012, a compromise that many Democratic lawmakers went along with.
“You need to really push the issue and join the debate,” said Peter Hart, a Democratic pollster. “And the theme of that debate, obviously, has to do with looking after the middle class and making sure the affluent pay their fair share.”
For their part, Republicans have not stood down at all from their stance that all of the Bush tax rates should be extended, accusing Democrats of playing class warfare by advising otherwise.
“The No. 1 priority of the American people is jobs, and they know you can’t create jobs by taxing the small businesses that create most of them,” said Michael Steel, a spokesman for House Speaker John Boehner (R-Ohio).
The most recent polling on taxes for the wealthy appears to show voters currently sympathize with Democrats on the issue, with the Washington Post-ABC News and New York Times-CBS News polls both finding in recent weeks that 72 percent of adults supported raising taxes on incomes above $250,000.
During his April 13 deficit-reduction speech, the president reiterated that he opposed renewing the tax cuts for the highest income levels, after earlier saying in his fiscal 2012 budget that he was still against the Bush tax rates on family incomes above $250,000 a year.
Obama, in recent appearances, has framed his position as essentially asking millionaires and billionaires to do their part to help the country’s fiscal situation. House and Senate Democrats have made similar comments, even though it remains to be seen which figure the party’s lawmakers will push for most strongly.
Sen. Charles Schumer of New York, who leads Senate Democrats’ messaging operations, proposed extending the Bush tax rates for annual incomes up to $1 million last year.
Rep. Nancy Pelosi of California, the Democratic leader in the House, also floated the idea recently of raising taxes on income above $1 million a year.
A Senate Democratic aide told The Hill that while Democrats were united on their tax rhetoric, they still had close to 20 months to decide which policy proposal to get behind.
“Policy-wise, the White House continues to draw the line at 250,000,” the aide said. “Messaging-wise, everyone’s talking about a million.”
A House Democratic aide, meanwhile, said party lawmakers in that chamber were coming together behind the $250,000 option, with Republicans not seeming keen on the $1 million proposal.
The lower threshold was included in the House Democrats’ 2012 budget alternative, while the Ryan budget assumes that all of the Bush tax rates will be extended and calls for eventually lowering the top individual rate to 25 percent and broadening the tax base.
“It just shows how out of touch they are with a very large segment of the population,” the Democratic aide said about Republican lawmakers. “As Democrats go across the country, we’re talking about the impact of the Republican budget on seniors and contrasting that with the positive impact millionaires get from the additional tax cuts.”
As the House aide alluded to, changes to Medicare, which the Ryan budget turns into a sort of voucher system, and Medicaid, which would become a block grant under the plan, have proven to be less popular than higher taxes for the wealthy in recent polls.
The Washington Post-ABC News poll found strong majorities opposing cuts to either program to help reduce budget deficits, while the New York Times-CBS News poll reported that six in ten believe Medicare is worth its current costs. The Times-CBS poll also found a plurality — 47 percent — supported letting seniors buy private insurance under Medicare.
GOP lawmakers have pushed back against Democratic rhetoric on taxes and entitlements, saying the House budget seeks to preserve and protect Medicare and Medicaid.
Sen. Mitch McConnell (R-Ky.), the minority leader, is also among those who have pointed to a recent Wall Street Journal op-ed that said taking every taxable dollar of top-earning Americans still wouldn’t fully take care of the current deficit.
Some Republicans have said that the Democratic case on taxes is giving them a sense of déjà vu as well.
“Washington Democrats tried this argument last year and got their butts kicked,” a House GOP aide said. “They’re more than welcome to try it again – but it’s tough to see how it works this time.”
Democrats, now back in their districts after the House GOP budget was approved, Ryan and other Republican House members have gotten some static over their position on taxes for the wealthy and entitlement programs.
“It would have been great to have gotten this done at the end of last year,” Michael Bocian of Greenberg Quinlan Rosner, a Democratic polling firm, said about ending the Bush tax cuts at the top income levels. “But as a political strategist, I’m perfectly happy to have this as an issue going into the 2012 elections.”