Democrats had their chance to raise tax rates on the rich

Lame-duck congressional Democrats continue their quest to pass controversial legislation (the DREAM Act) and bottleneck popular legislation (the tax deal). In response, political analyst Stu Rothenberg deals out some scathing criticism:

Many House Democrats apparently figure that November’s elections had nothing to do with them, their agenda or their leadership.

Sure, their party lost 63 House seats, with voters more than wiping out the Democratic gains from 2006 and 2008 and rejecting their argument that the election was a choice between going “forward” with Democrats or going “backward” with Republicans.

But is that a reason to change the House leadership team or lower their voices on issues that they’ve been talking about for months? Is that a reason to show some humility during a lame-duck session coming after the worst midterm election defeat in more than 60 years? Why on earth would anyone think so?

Rothenberg notes that the Democrats failed to address tax rates when they had the numbers to do it. They had two years to act. The decision was a political one whose calculus I hardly understand, and now they're paying the price for it.

What if they had done it? There is an argument to make that a tax showdown would have helped the Democrats politically. In the pre-election dynamic, Republicans would have been perceived as the ones forcing a tax hike on lower-income earners. That reality underlies presumptive Speaker John Boehner's comment that he would vote to freeze tax rates only for those making below $250,000 if that was the only choice he had.

But there was a lot going on in the 111th Congress that this argument ignores. The 2010 election was an example of what happens when liberals go way too far with their ideology and ignore political realities in several different areas at once, creating a laundry list of faults: “He voted for the stimulus, he voted for Obamacare, he voted for cap and trade,” etc. A tax hike would have added a big-ticket item to the list.

It didn't damn Obama in 2010 that he promised to let it happen, but things were certainly different in 2008. Then again, the argument that raising any taxes in a recession is poor policy should not be discounted.

Public polls show support for increasing tax rates on families with incomes above $250,000, but the support is shallow. In the run-up to the election, you could certainly get 50 percent to say they support increases in the top tax rate. But only the left-wing base — probably south of 20 percent of the electorate — is so concerned about soaking the rich that they want to reject the current tax deal, with DeMint-conservatives making up the balance of the opposition.

Of course, that's not the way it would have looked if Democrats had acted sooner. They would have framed the GOP as hostage-takers. Republicans would have accused them of raising taxes in a recession in order to pay for the failed stimulus package.

You can really never know how this would have turned out. A lot depends on which House seats the Democrats thought a tax hike would imperil — the calculus that motivated them to put off the issue.

Beltway ConfidentialUS

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