FRONT PAGE CONTRIBUTOR
Harry Reid: The New Walter Mondale
Back in the good old days, referring to a liberal as “tax and spend” was considered an insulting accusation – one that Democrats avoided, deflected and denied. All except poor Walter Mondale. Back in 1984, for some reason, Mondale thought that telling Americans that he was going to raise taxes would somehow be considered a good thing to do.
Let’s fast-forward to today. Today, Harry Reid released his inner Mondale:
“[Republicans] have to understand today, right now, the day that we passed the bill, that they will have no legislation coming out of that committee unless revenues are a part of the mix. It’s a fact of life,” Reid said on NPR’s “All Things Considered” radio program.
“In my private conversations with the Speaker [John Boehner] and with the Minority Leader [Mitch McConnell] over here, they assume and the legislation allows revenue will be part of the mix,” Reid said.
Surprisingly, Reid continued the use of the euphemistic “revenues” rather than “tax increases.” What I find baffling is this new-found belief that somehow the citizens of the United States want higher taxes. Ever since the debt limit “crisis” (and I use that term sarcastically) began, the Leftist meme machine has been trying to peddle this idea that we are all chomping at the bit to give the government more of our money. They have quoted polls and droned on with the poll-tested “balanced approach”. Investors Business Daily points out:
In fact, a quick look at the polling data referenced by the president shows this isn’t true. Not even close.
Gallup itself breaks it out: Those who say they want the deficit reduced “only/mostly with spending cuts” total 50% of those polled. Those who say they’d like it done “only/mostly with tax increases” total 11%. That’s not 80%.
Exactly. Like usual, the Obama/Reid crowd try to paint a picture that simply isn’t sane.
Reid and his posse are still smarting from last December, when Obama signed on to an extension of the tax reductions from the George W Bush administration. They hate this. They won’t give up. Soak-the-rich class warfare is burned into their DNA. Fortunately, the electorate is smarter than that. Even leftists like Kevin Drum realize this. They know that public opinion is against them.
But Reid and Obama press on. They insist that tax increases are the answer. But pining for the days of Mondale won’t work. As Cato illustrates, the soak-the-rich tax rates from the pre-Reagan era didn’t work either:
It is not as though we have never tried high tax rates before. From 1951 to 1963, the lowest tax rate was 20% to 22% and the highest was 91% to 92%. The top capital gains tax rate approached 40% in 1976-77. Aside from cyclical swings, however, the ratio of individual income tax receipts to GDP has always remained about 8% of GDP.
The individual income tax brought in 7.8% of GDP from 1952 to 1979 when the top tax rate ranged from 70% to 92%, 8% of GDP from 1993 to 1996 when the top tax rate was 39.6%, and 8.1% from 1988 to 1990 when the highest individual income tax rate was 28%. Mr. Obama’s hope that raising only the highest tax rates could keep individual tax receipts well above 9% of GDP has been repeatedly tested for more than six decades. It has always failed.
But, Democrats wail, high taxes WORKED!!11!!1! when Clinton was president! Cato unravels this argument as well:
The situation of 1997-2000 was unique. Individual income tax revenues reached an unprecedented 9.6% of GDP from 1997 to 2000 for reasons quite unlikely to be repeated. An astonishing quintupling of Nasdaq stock prices coincided with an extraordinary proliferation of stock options, which the Federal Reserve’s Survey of Consumer Finances found were granted to 11% of U.S. families by 2001, and with a reduction in the capital gains tax to 20% from 28%, which encouraged much greater realization of taxable gains through stock sales. Revenues from the capital gains tax rose to 10.8% of all individual income tax receipts in 1997 and 13% by 2000. The unexpected revenue windfalls in President Bill Clinton’s second term were largely a consequence of lower tax rates on capital gains.
Interesting. Windfalls due to reduced capital gains taxes. Where have we heard about that before? Oh, here:
The big 2001 and 2003 Bush tax cuts won a two-year extension in the Obama-Republican deal of December 2010 and are now set to expire at the end of 2012. Also expiring: a two year cut in the estate tax as well as tax cuts that were originally part of the 2009 stimulus, including Obama’s prized $2,500 American Opportunity college tax credit. If these tax provisions expire, the top tax rate on ordinary income such as salary will go from 35% to 39.6% (or 40.5%, when the Medicare surtax is included) and the top rate on long term capital gains will go from 15% to 20% (or 23.8%, when the surtax is included). Meanwhile, the current $5 million exemption from estate and gift tax would drop to $1 million, and the 35% tax rate would rise to 55%.
So one of the most beneficial tax policies of the Clinton years – the timeframe that the Democrats love to quote to back their claims for higher taxes – will be reversed and made worse if the Bush tax rates are rolled back. Marvelous.
But hey, Harry DID tell us – he WANTS higher taxes. The Democrats think we all WANT higher taxes. They’re telling us so.
The Democrats tried to peddle this story back in 1984 and it didn’t work. Considering Reid’s comments, I found this 1984 Ronald Reagan re-election ad to be quite relevant:
ReidObamanomics = Mondalenomics.
Mondalenomics didn’t sell with the electorate. ReidObamanomics won’t either.