Barack Obama's populist attack on the "rich" is the beginning of a war on the middle classes. The temporary tax rates currently in effect are due to expire at the end of the year and Congress has packed up and gone home to campaign without anything on the table to suggest that they will extend them. Allowing them to lapse would end up being one of the biggest tax rises America has ever seen.
The "Bush tax cuts" have been coined by Democrats as merely a tax break for the rich. Obama, who always seems to spend more time campaigning, even as president, than he does governing, is once again out and about trying to arouse the masses against the inequity of not raising taxes on "the rich." He opposes extending the Bush tax rates that are due to expire at the end of the year when a higher rate is restored for "millionaires and billionaires" as Obama calls it. The people President Obama believes fall into this category are the typical political scapegoats - "lawyers, investment fund managers, bankers". It's a populist attack and with it, Obama is being incredibly liberal with the truth too.
This isn't just a tax hike on the millionaires and billionaires, it's a tax hike on what is roundly considered to be his core base: police officers, teachers and the like. In Obama's Chicago, a high-school principal can earn $148,000. A police officer with 25 years service can earn $114,000 not even counting overtime. If the principal and the officer are married, supposedly they are rich as they would fall into Obama's new net for the "millionaire's and billionaires". Household income does not need to be the million dollars that Obama claims, but $250,000 - a figure easily achieved by those who have given lengthy service to public institutions such as education or policing. There's a $750,000 credibility gap. The hard-working, honest middle class teachers and police officers could now become the despised "rich" in Obama's America.
This only tells part of the story. It's not just the tax rates for those households earning more than $250,000 that are due to expire at the year's end, it's everyone's tax rates including the low earners. Congressional Democrats delayed a vote on extending the tax breaks for low-earners until after the mid-term elections because party leaders conceded that before the elections on November 2nd, despite holdng 59 Senate seats, Democrats wouldn't be able to find the 60 votes required to support their measure. The uncertainty surrounding the rates of tax is becoming a large burden on American business as well as individuals who may stop spending and investing for fear of being hit by higher tax rates in the near future. Consumer confidence once again fell in September.
We must, however, recognize and give credit to the Democrats in Congress who have a grasp of reality. Democrat Indiana Senator Evan Bayh got it right when he said it was not a good idea to risk dampening consumer demand right now. 4 other Democrat senators support Bayh in extending the tax cuts across the board. 31 other Democratic members of the House of Representatives got it right when they let Speaker Nancy Pelosi, D-Calif., know they would not support increasing taxes right now.
Connecticut Senator Joe Lieberman, an independent who usually caucuses with Democrats, said he supports extending the lower rates for everyone. "I don't think this is the time to raise anybody's taxes, including those who are wealthiest," Lieberman said on CNN. Lieberman added that there is a "possibility" that the cuts will expire and everybody's taxes would go up. "I think when we come back in November or December, the first thing is we've got to extend these tax cuts." As yet, there is no credible plan on the table to extend the tax cuts, even for the less wealthy.
While remembering that this is not a debate about increasing taxes on the "millionaires and billionaires" as Obama is attempting to frame the argument, but on honest, hard-working long-serving teachers and police officers and the like, as well as those on lower-earnings who should be in no uncertain terms that their lower tax rates may well expire come December 31st.