January 3, 2013

MORE, MORE, MORE! After The Fiscal Cliff, What Do Democrats Want? “President Obama just successfully raised taxes on the rich. Is he going to go back and do it again in a few months? I’m not sure about the optics here: while I think that a tax increase on the rich was popular and inevitable, I don’t think that Democrats will do well to position themselves as the party that does nothing but demand more tax increases, even on rich people.”

Oh, I think they’re okay with that. The real problem is that further tax increases will hit Democratic constituencies particularly hard.

UPDATE: A reader emails:

You’re missing the point. Look at what was passed in the last-minute fiscal cliff parachute… the Democratic strategy is not just to raise taxes on the rich, but also to exempt their favored constituencies from those taxes. If tax rates are intolerably high for everyone with money, everyone with money has to go to the democrats and beg for a loophole in smoke-filled back rooms. This is exactly what politicians want: invisible leverage, the wealthy and powerful coming to them, hat in hand, begging to be allowed to get their money back in a secret tax loophole.

Well, yes, but that only works for the Warren Buffett/George Soros rich people. Lawyers, ad execs, and nonprofit executives making $500K/year can’t do that. And they got significant pushback from the NY and CA delegations for that very reason.