Tax politics

One thing that has clearly played into the public’s difficulty in seeing connections — the Bartel thesis — is the social security trust fund. Whatever the original logic of the TF, its existence has been a disaster for the policy debate on Bush’s tax cuts. Homer doesn’t seem to understand that his SS taxes are going to fund Bush’s unsustainable fiscal policy — which will be returned to sustainability by slashing his future social security benefits.

Part of the problem here, IMO, is the Democrats’ steadfast refusal to run against the rich.

The leading Democratic argument against the Bush tax cuts has instead been fiscal responsibility. While it’s not true that nobody cares about balanced budgets, I think it’s fair to say that most people don’t care very much about them.

Democrats would have done better stressing the inequity of the tax cuts. Of course, they would have been accused of “class warfare.” But, as Tom Frank keeps pointing out, class warfare — real or(more likely given their funding base) phoney — is probably their best ticket back to power.

One of the most obvious reasons the Repubs have managed to succeed is unbelievable cowardliness (or, perhaps, duplicity) of the opposition party.

Yeah, you bet – there is space for a much greater degree of left-populism in American politics, but who is going to champion it – Nancy freakin Pelosi?

asg is half-right. The problem with the Democrats is that they are funded, to a great degree, by the rich.

That certain Democratic officeholders are wealthy is undeniable, but that shouldn’t be a bar to taking populist stands. Look at Roosevelt and the Kennedys. But the real problem is that the donor base is composed of people almost as welthy as the Republican’s; part of the debacle of Democratic support for the bankruptcy bill was not wanting to cross the interests of donors.

Certainly, internet fundraising may change this dynamic–Howard Dean and (to an extent) John Kerry were able to tap into a more middle-class donor cohort. Whether the Democrats can shake their psychological dependence on wealthy donors remains to be seen.

Actually, the Democrats’ donor base is historically more wealthy than the Republicans’.

I’d argue that the real problem is the incredible complexity of the tax code. No voter is likely to understand the consequences of any changes given that no individual can understand the current system. About all most voters can really evaluate is more money in my pocket = good, not merely because of some Homeresque simplicity, but because most people can barely understand the tax provisions that directly affect them, much less the (iirc) ~28,000 pages in the tax code (I could be off by several thousand pages, but who cares).

Were the Democrats to seriously propose radical tax simplification, I believe that the dynamic in Washington would shift substantially. They could demonstrate their commitment to ending subsidies to big businesses, and construct a reasonably progressive system that doesn’t enable the Heinzs and Hiltons of the world to avoid taxes via the use of trusts and highly paid tax attorneys.

Hell will, of course, freeze solid first.

abb1,
Given best estimates of the intelligence of politicians, anyone who expects said politicians to make sense of anything, much less the tax code, is rather naively optimistic…

Are you arguing in favor of much more limited government?

“Certainly, internet fundraising may change this dynamic—Howard Dean and (to an extent) John Kerry were able to tap into a more middle-class donor cohort.”

This is a myth. The Republicans raised much more money (2X) through small donations than the Democrats did in the last election. There was just a lot of talk about it on the Democratic side because of their use of the internet.

http://www.opensecrets.org/pubs/bigpicture1998/overview_donations.asp

There’s an invalid assumption behind most of the comments I’ve read here. The assumptions is that poor and middle class Americans feel they are not getting as good a deal as the rich. That’s just patently false. A democrat that ran on a soak-the-rich platform would get crushed.

Americans don’t typically feel stuck at one socio-economic level, and this notion is constantly being reinforced by the wave of immigrants that come in and often succeed at bettering their lives.

In Europe, when someone sees a person driving down in street in a Rolls Royce, they think, “The person doesn’t deserve that car.” In America they think, “Someday I’ve be driving that car.”,/i>

There are no left-populists in this country to rival the Norquists. There are a few academics, some old lefties and 12 yuppies that know what the European left says.

Most Democrats are middleclass, middle-age and low risk. NFL-like, the Democtrat will come back to power only when the Republicans will lose by themselves.

The notion that we’ll all become rich was never very realistic, but it becomes sheer self deception in an increasingly static or declining economy.

You have to hand it to the Republicans. They at least know that they’re playing musical chairs and that the music just stopped.

The observation that there are a large number of rich democrats is connected to the problem facing traditional liberals: the intemperate focus on programs directed at the very poor. Democrats used to be the party of the working people, who needed and used social programs to better their own lives. The focus on the very poor effectively disenfranchised Clinton democrats, the people who work hard and play by the rules.

See this excellent post by Max Sawicky:
http://maxspeak.org/mt/archives/001358.html

Until we realizethat any program we enact must focus on creating a better society for everyone, not just the poorest members of society, we will not recapture the fervor of the voter.

Henry, thanks for calling attention to two important and thought-provoking articles. I suspect this thread is about to die, but I hope you can keep the topic alive somehow. It seems to me that nothing has contributed more to the Republican ascendancy than their message on taxes. And nothing has hurt the Democrats more than their inability to develop an effective counter message. Because of this, creating that compelling counter message on taxation is the single most important step the Democrats must take if they ever hope to regain any significant influence in Washington.

What is the counter message the Democrats should be using? After reading both articles and the posts in this thread so far, I’d suggest the following:

1. First, Democrats have to resist the temptation to explain away what people are telling them. Yes, Americans dislike income inequality, yes they do like social programs more than the conservatives think, and yes, the issues are complex and the Republicans have manipulated public opinion effectively. But what motivates people in the voting booth is exactly what they’ve been telling us for decades: THEY REALLY THINK THEIR OWN TAXES ARE TOO HIGH, AND REGARDLESS OF TRADEOFFS IN INCOME EQUITY OR SOCIAL PROGRAMS (UNDERSTOOD OR NOT), LOWER TAXES ARE SOMETHING THEY WILL VOTE FOR. Democrats continue to ignore (or try to explain away) this simple statement at their own peril. Take it at face value.

2. Because the voters believe their taxes are too high, Democrats must begin saying that taxes are too high, just like the Republicans do. STEAL THE REPUBLICAN’S RHETORIC HERE! There is nothing inherently “illiberal” about thinking taxes are too high. Believing in preserving government social programs, doesn’t mean we can’t also work to make these social programs as inexpensive as possible for the taxpayer. In fact, lowering the cost of social programs is quite liberal, since the cheaper we can provide social benefits to the middle and lower classes, the better off those classes will be in the long run. Demographics being what they are, the reality is that the middle and lower classes are going to bear a significant portion of the cost of social programs even if the very rich do “get soaked” with high tax rates. There just aren’t enough very rich to fully cover the programs’ costs.

3. Adopting a message of fiscal responsibility is essential to having a credible message on taxes. Republicans have been able to paint Democrats as fiscally irresponsible: “tax and spend” Democrats! The fact is, the Republicans have become profligate. The Democrats must start decrying Republican profligacy. REPEAT THE MESSAGE THAT THE REPUBLICANS HAVE CREATED THE HIGHEST GOVERNMENT BUDGET EVER. DECRY THE REPUBLICANS’ MASSIVE SPENDING CONTINUOUSLY. DON’T LET UP ON THIS POINT TILL IT SINKS IN. USE EXAMPLES THAT FOCUS ON THE MOST EGREGIOUS PORK.

4. Focus on the fact that not only have the Republicans raised spending to unheard of levels, THEY’VE CHARGED EVERYTHING TO THE PEOPLE’S CREDIT CARD WITH INTEREST. Through the ever rising deficit, the Republicans are leaving a huge credit card bill to our children. WOULD YOU RUN UP YOUR CREDIT CARD BALANCE AND LEAVE IT TO YOUR CHILDREN? IS THAT SOME NEW KIND OF FAMILY VALUE? Of course not, but it’s exactly what the Republicans are doing and some day either you or your children are going to be stuck with that bill. And that MEANS YOUR TAXES ARE EVENTUALLY GOING TO BE RAISED BECAUSE THE CREDIT CARD BILL HAS TO BE PAID AT SOME POINT—JUST LIKE IT DOES AT HOME.

5. Not only have they run up the country’s credit card debt—which is going to mean a huge future tax bill, THEY ARE CHANGING THE TAX CODE TO PUSH THE TAX BURDEN ON HARD-WORKING PEOPLE. As taxes are continually cut for investors and people who inherit their money, the burden of paying taxes is being transferred to ordinary wage earners. Investors, business people, people with trust funds now can shelter their money from nearly all taxes under the Republican system. ORDINARY PEOPLE WHO WORK FOR WAGES, THOUGH, HAVE NO TAX SHELTERS AND ARE INCREASINGLY PAYING THE WHOLE COST OF THE REPUBLICAN’S PROFLIGATE SPENDING BILLS. IT’S COMING OUT OF YOUR PAYCHECK BEFORE YOU EVEN CAN GET YOUR HANDS ON IT. Some Republicans are even advocating that we introduce a NATIONAL SALES TAX, SO THAT EVERYTIME YOU SPEND ANY MONEY THE FEDERAL GOVERNMENT WILL MAKE YOU PAY. This is designed to transfer the cost of the Republican’s profligate government spending to the ordinary consumer who lives paycheck to paycheck and ends up spending most of his or her money. People with more money to save will no longer pay much in taxes as all as the Republican program is implemented. Is that fair? IF YOU WORK HARD FOR A LIVING, EARN AN HONEST WAGE, AND HAVE TO SPEND JUST TO MAKE ENDS MEET, THE REPUBLICANS ARE COMING FOR YOU MONEY THROUGH A TAX PROGRAM THAT TRANSFERS ALL OF THE TAX BURDEN TO ORDINARY WORKING PEOPLE.

6. Finally, the Republican’s spending priorities mean that YOUR TAX MONEY IS GOING TO THE WRONG PROGRAMS. Is it really sensible to be spending $300 billion dollars to build a democracy in Iraq when George Bush says we can’t afford Social Security at home anymore? Are YOU HAPPY SACRIFICING YOUR RETIREMENT SECURITY TO MAKE IRAQ SAFE FOR DEMOCRACY? IS IT SENSIBLE THAT WE ARE BUILDING SCHOOLS FOR IRAQIS AND CUTTING EDUCATION FUNDING IN YOUR HOME TOWN? Maybe your $300 billion in tax money would be better spent at home? THERE’S ONLY SO MUCH AMERICANS CAN AFFORD, AND MAYBE WE SHOULD MAKE OURSELVES THE PRIORITY. Instead, the Republicans are spending record amounts of your taxpayer dollars on programs that don’t benefit do anything to benefit you—and they’re cutting the few programs that really do help hard-working Americans, like Social Security and Medicare.

FINAL NOTE: NEVER USE THE WORD “RICH” OR “POOR” and even avoid using the term “middle class.” Just focus on the fact that THE REPUBLICANS ARE TRANSFERRING THE EVER-RISING COST OF GOVERNMENT TO ORDINARY PEOPLE WHO WORK HARD FOR A LIVING, ALL THE WHILE CUTTING THE ONE OR TWO GOVERNMENT PROGRAMS THAT ACTUALLY BENEFIT THOSE HARD WORKING PEOPLE. Making the argument a “class” issue just gets you off the main topic—that the Republicans are increasing the tax burden on ordinary working people.

This goes to show they should ask knowlege testing questions along with opinion questions in most every poll, or at least do them both equally often. It seems disingenuous to report that half the country feels one way about an issue and the other half feels another way, and not tell you which half doesn’t have a clue what they’re talking about.

“Can we educate such people, though?”

Nancy–you’re asking the wrong question. You should ask can she educate us?

The woman you described certainly is paying taxes–FICA if nothing else–but probably a small income tax bill too.

She probably is making minimum wage (or very close to it) with few or no benefits.

She’s probably living paycheck to paycheck at best–maybe going deeper and deeper into debt all the time or at least not paying all of her monthly bills. Her financial situation is almost certainly perilous.

Because of this, any financial relief is valuable to her–so naturally she wants a tax cut. It may seem like “nothing” to you and me, but even $100 is significant to someone like this. Even $10 can make a difference. The $300 check she got from the Bush tax cut was likely more than her weekly paycheck. In fact, it could have been two weeks of her take home pay–1/26th of her annual salary. It may have helped her keep an apartment or pay a medical bill that she had no other way to pay. That’s pretty damn significant for her. People in this income bracket don’t have the luxury of thinking long-term. They need immediate relief because they’re living on the edge of finacial ruin.

The Republicans (and other conservatives) understand this truth and they use it to get the votes of people like this woman. Their policies may not really be helping these people (in fact, they are even hurting these people in the long run), but the Republicans are listening to ordinary people and acknowledging that they mean what they say. Liberals are acting like elitists by asking questions like yours, which really are condescending. Start assuming this woman really does know what she’s talking about. She does. She’s not stupid. She’s desperate for some financial relief–so desperate in fact as to vote against her long-term self-interest in order to gain some immediate, short-term relief from the ever-present cloud of financial ruin.

No, no, no, Moni . . . it’s not stupid to vote against your long-term self-interest when you’re in a desperate short-term situation. It’s actually very rational behavior. We’ve got to understand that if we’re ever going to win power again! It also doesn’t matter that others (rich people) are getting more than you–when you’re desparate, you don’t have the luxury about worrying about the fact that others may be getting more. You just act to protect yourself. Liberals keep buying into this view that somehow we can “educate” people to look at the long term. These people are in trouble now and they simply are reacting to the inescapable fact that they could get kicked out of their home tomorrow because they don’t have the money to pay the rent. You don’t worry about your Social Security benefits when you can’t meet the rent payment. That’s not stupid behavior, it’s survival.

God, please, we have to escape this mentality that we know what’s best for these people, and start really listening to what they are actually saying to us and formulate a respectful response that addresses their short-term needs. Once we do this, we can start to make progress on addressing the long-term issues where, yes, I toally agree, we can really help them (and the Republicans are really screwing them).

How many poor and working class votes do we need to lose before we stop fooling ourselves? The Republicans are winning their votes, guys, despite all our “analysis” of why we think that makes no sense.

One other thing we have to ask: are the social programs we are proposing really working for these people? The working poor and lower middle class do not get great benefits from our current social safety net and I haven’t seen the Democrats making any truly convincing proposals that would give these people confidence they really are voting for their long-term self-interest if they vote Democratic. If we are going to argue that they should vote long-term over short-term, then we better be more convincing that we really have something to offer them long-term. I don’t think we’ve done that either.

We’re losers guys.

Moni, I agree with much of what you’re saying. But there are a few misconceptions that liberals need to overcome if they are ever going to regain power (and therefore actually be in a position to do some good for real working people):

First, that reducing taxes is bad–and only a populist gimmick designed to dupe voters. On the contrary, low taxes are good. In fact, taxes should be absolutely as low as possible, while still being sufficient to support essential government programs (such as decent social programs). You are right about warped spending priorities and inexcusable waste in Iraq and elsewhere–I totally agree–but wanting to fix those priorities and eliminate waste and misallocation of funds does not somehow mean we shouldn’t also want to lower taxes at the same time. Quite the opposite, the two should go hand-in-hand–and we should be saying so loudly.

Second, that the current social programs this country has are really very effective at relieving the financial stresses of the poor and lower middle classes (particularly the working poor and middle class). Yes, you are right that people need programs that provide health coverage, make housing more affordable, provide better job opportunities, etc., etc more than they may need a small tax cut. But I don’t think we’ve really delivered those benefits all that effectively in most of our actual social programs (Social Security comes the closest to success, but the benefits are deferred, not immediate–and many of our other social programs don’t do much for you if you’re working and therefore they won’t benefit you as much as a tax cut unless you first lose your job). Voters sense this, and it’s one reason they pick short-term tax relief over vague promises of better social benefits. The reality is that the promises of better social benefits haven’t been delivered, so voters may less be duped by the conservatives’ low-tax promises then they are skeptical of the higher-benefit promise being made by liberals. Yeah, Clinton promised more universal health care coverage. But what he really delivered was a cut in welfare and more manufacturing jobs shipped overseas. If I’m working in a chicken processing plant for $6/hr, am I really being duped if I decide to take Bush’s lousy $300 tax refund over Clinton’s welfare cut and job exports? Hmmm . . . puts the choice in a different perspective, doesn’t it, particularly if at the same time I’m making my choice, the bank is trying to repossess my car and I need the $300 bucks to save my wheels?

Third and finally, what the rich get (or get away with) isn’t the main concern of the people we’re trying to reach. We need to address their concerns first if we want to appeal to them. And as funny (and true, in some respects) as the cartoon that introduces this thread might be, it is indeed condescending to the “Homers” whose votes we are trying to win and whom we are supposedly trying to help. Whatever possible truth might be contained in our rhetoric about the rich getting away with murder and the uninformed masses being duped, it’s not helping us win any votes–and in fact, it’s only obscuring what I hope is our primary message, making life easier and fairer for those who are struggling in the current system. I don’t know, but just maybe we should dispense with the rhetoric that seems to get us repeatedly and apparently quite convincingly labeled as “elitist class warriors out of touch with working people”? Maybe we could ask Karl Rove. I bet he knows.