Those who want to extend the Bush tax cuts for everybody except those earning over $250,000 probably thought they had an ace in the hole: class warfare. They could claim that the GOP was “holding the middle-class cuts hostage to those for the wealthy.”
There’s just one problem for the big taxers: Americans don’t hate the rich.
If Americans did hate the rich the Democrats would have made letting the Bush cuts on the top income folks a bigger issue on the campaign trail. But vulnerable Democrats steered clear of this during the midterms. William Voegeli notes in the new Commentary:
It seems plausible, then, to conclude that the Democrats’ craven and feckless decision not to go to the voters in November as the champions of a tax increase on well-to-do families was, in fact, politically sensible. But what explains this explanation? Why are Republican voters the only ones who really care about taxes? Why, more broadly, are the well-paid Americans who write editorials in the New York Times offices during the day more exercised about economic inequality than the modestly compensated ones who empty their wastepaper baskets and vacuum their carpets after dark? And why do the editorialists’ solutions for the problem of inequality so often elicit the janitors’ indifference or disdain?
Income inequality is popular with intellectuals and editorial writers, but it is an abstraction for most people, who care more about their own economic situation than how it compares with somebody else’s. They also, wisely, appreciate that the attitude that the rich can have their property confiscated is dangerous; this view eventually trickles down to them, and their taxes go up:
To go beyond the electoral failure of economic leveling and understand why it antagonizes the very voters the Democrats want to attract is a harder challenge. I have an unproven, untested, and perhaps untestable hypothesis for why so many middle- and working-class Americans confound liberals by siding, often angrily, with the Stinking Rich against the Beneficent Reformers. It is that Bonnie Snodgrass’s version of the trickle-down theory, in which tax increases supposed to be confined to the prosperous are going to wind up imposed on the precarious, is more broadly applicable and resonant. In this view, the “principle” that rich people should be forced to surrender some of their wealth, just because they are deemed to have too much, is eventually going to justify policies that force non-rich people to surrender some of their wealth, just because. One of the telling arguments against Washington’s income-tax ballot proposition, for example, was that the promise to limit the new tax to families making more than $400,000 and individuals making more than $200,000 would be good for all of two years, after which the legislature would be able to apply the tax to people with smaller incomes through a simple majority vote.
Thomas Sowell faults Republicans for not making the lower taxes on the rich=better economy for us all argument better. If Voegeli is right, however, it’s not that the GOP hasn’t made an argument; it’s that the lame duck Congress is the same highly ideological Congress that has paid very little attention to what Americans think all along and doesn’t intend to break with that tradition now.