t is assumed that Obama has the upper hand. Unless Republicans acquiesce and get the best deal they can right now, tax rates will rise across the board on Jan. 1, and the GOP will be left without any bargaining chips.
But what about Obama? If we all cliff-dive, he gets to preside over yet another recession. It will wreck his second term. Sure, Republicans will get blamed. But Obama is never running again. He cares about his legacy. You think he wants a second term with a double-dip recession, 9 percent unemployment and a totally gridlocked Congress? Republicans have to stop playing as if they have no cards.
Obama is claiming an electoral mandate to raise taxes on the top 2 percent. Perhaps, but remember those incessant campaign ads promising a return to the economic nirvana of the Clinton years? Well, George W. Bush cut rates across the board, not just for the top 2 percent. Going back to the Clinton rates means middle-class tax hikes that yield four times the revenue that you get from just the rich.
So give Obama the full Clinton. Let him live with that. And with what also lies on the other side of the cliff: 28 million Americans newly subject to the ruinous alternative minimum tax.
Republicans must stop acting like supplicants. If Obama so loves those Clinton rates, Republicans should say: Then go over the cliff and have them all.
A couple weeks ago I took some heat for suggesting that the GOP — as a part of the price of losing, but mostly just to change the subject away from themselves — go on and cave on Obama’s tax hikes “for the rich.”
But as the Democrats dig in and refuse to do anything about our deficits except for hiking taxes, my play is becoming small beer, isn’t it?
Disaster is coming. Why not have it come sooner rather than later, and with the man mostly responsible for it still in the Oval Office? He might not take the blame, but he can sure as hell be made to feel the heat.
This decision isn’t an easy one to make, either. In this case, I’m not just a blogger sitting in my pajamas. My wife’s job could very well be eliminated if the sequester goes through, and she and I we would be two of those 28 million Americans who get socked right between the eyes by the AMT. I’ve taken hits from it before, and it isn’t fun.
A lot less income. A much bigger tax bill. Oh, yeah — I’ve got skin in this game.
But it might just be the only game in town.