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The Class-Warfare Gambit
Heritage Foundation ^ | August 10, 2010 | by Michael Franc

Posted on 08/16/2010 6:30:27 PM PDT by Son House

Imagine you are one of House Speaker Nancy Pelosi’s top political strategists. The polls show your party needs a game-changer, something that will transform what looks like a losing political hand into a winner. “I know,” you shout, “let’s push for a large tax increase on the ‘fortunate few’ — the 2 or 3 percent of the population with so much money they won’t even miss a few thousand bucks. The other 97 or 98 percent will feel no pain, and we’ll be able to call ourselves deficit hawks when all those billions start rolling in.”

On paper, this strategy may look promising. But a close look at who will pay the tab, where they live, and who represents them on Capitol Hill suggests that this approach has some major political flaws.

First, a few facts. When the Times Square ball falls on New Year’s Eve, the top tax rate on wages will jump by more than 13 percent, to 39.6 percent; the capital-gains tax will leap by a third, to 20 percent; and the tax on dividends will more than double, leaping to 39.6 percent from 15 percent.

Other taxes are slated to rise, too. Tens of millions of middle-income families will not only see their own marginal tax rates increase, but will also see the tax credits they claim for their children cut in half, their marriage-penalty relief vanish, and the current 10 percent tax bracket on the first $12,000 of their income increase to 15 percent.

In sum, tax-hike Armageddon looms, and the political lines are clearly drawn. Every single Republican lawmaker in Congress has called for stopping these hikes. But many leading Democrats — such as Treasury secretary Timothy Geithner, Speaker Pelosi, and Senate majority leader Harry Reid — see things differently. While they insist they won’t let taxes rise on the middle class, they believe it is only “appropriate” to boost taxes significantly for the wealthiest 2 to 3 percent of Americans. It is, they insist, the best way to reduce the burgeoning federal budget deficit.

Their plan is straightforward: Soak only the top-earning households in America — those earning more than $200,000 as single filers or $250,000 as married couples. Economically, they argue, it’s a free lunch. Pelosi summed up the progressive macroeconomic view this way: “The Bush tax cuts for the wealthiest people in America did nothing to grow the economy during the Bush administration, did not create jobs, [and] did not reduce the deficit.” And House majority leader Steny Hoyer articulated the microeconomic rationale: “Those who are doing well will not have their lives adversely affected [by these tax increases].” Not only do they see no economic harm in squeezing an extra $75 billion or so each year from our most productive citizens, but Democratic political strategists also see this soak-the-rich strategy as a political winner.

Lori Montgomery of the Washington Post explains:

Raising taxes is usually a perilous move. But Democrats, facing the potential loss of their majorities on Capitol Hill, believe that the [tax increase] strategy will both force Republicans to defend tax breaks for a tiny, wealthy minority and expose GOP hypocrisy on budget deficits.

So there you have it. Divide that “tiny, wealthy minority” from the rest of us. Pit those idle rich against the hoi polloi. Let “the little people” keep their tax credits and their pathetic 10 percent tax bracket, and they will reward you at the polls for sticking it to those haughty country-club types. What’s not to like about that road to political victory in November?

Well, a couple of things. According to the most recent IRS income-tax data, that “tiny, wealthy minority” encompasses more than 4.3 million households. Counting spouses, children, and other dependents, you’re talking about putting 12.5 million living, breathing Americans in the tax-hike crosshairs.

That’s an average of nearly 29,000 “rich” constituents per district — no small potatoes in an era when lawmakers break out in night sweats whenever district offices report that disgruntled voters are asking when they will hold town-hall meetings.

Of course, no district is “average.” The number of “rich” households varies dramatically from one district to the next. No fewer than 100 House districts boast at least 40,000 “rich” constituents (for the full list, go here); 68 districts are home to 50,000 or more; and 25 districts have 75,000 or more. One of those 25 is VA-11, located in the D.C. suburbs. Its current representative, Democrat Gerry Connolly, acknowledges that constituents have been lighting up his phone lines. As a result, he has been making the rounds on cable news and saying that now is not the time to raise taxes on anyone, including the rich.

Connolly is no supply-sider; his concern is a prudential one. While tax increases on the wealthy may one day be appropriate and necessary, he argues, the “fragile” nature of our economic recovery precludes such a move forthe time being. He’s on stronger ground when he points out that the top 5 percent of income earners generate 30 percent of all economic activity; hitting them with a draconian tax hike would surely throttle the recovery.

According to the latest IRS income-tax data, Connolly’s district ranks among the 20 wealthiest in the nation. Counting spouses and kids, fully 84,804 of his constituents live in “rich” households. That’s over 11 percent of his constituency.

Several of Connolly’s Democratic colleagues find themselves in a similar bind. Topping the list is freshman Rep. Jim Himes in CT-4. More than 146,000 of his constituents — who comprise over a fifth of his district’s entire population — live in high-income households that will be asked to fork over an astonishing $1.7 billion in additional taxes next year. That’s more than $39,000 per household.

When we consider how many other competitive House districts have significant numbers of “rich” constituents, it becomes clear that the politics of “taxing the rich” may turn out to be more complex than Democratic strategists first envisioned. Indeed, the progressives’ class-warfare gambit may backfire disastrously this November.

TOPICS: Business/Economy; Front Page News; News/Current Events; Politics/Elections
KEYWORDS: class; gambit; nazipelousy; npftl; toostupidtobreath; warfare
The Democrat Majority Congress are ruining state and local economies. Since they won in the 2006 mid-term election, they have been offering stimulus, aid, and grants, but it will never make up for the money they take from constituents. Pitting the poor against the rich has only ruined the economy for all. Thanks, Democrats!
1 posted on 08/16/2010 6:30:29 PM PDT by Son House
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To: Son House
text describing the image
2 posted on 08/16/2010 6:31:58 PM PDT by Son House (The Bush Tax Cuts Produced Better Results Than All The Democrat's Stimulus Bills Combined.)
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To: Son House

They’re going to continue to try the class warfare strategy.

Jesse Jackson is holding a “rebuild America” march in detroit on the 28th (The same day Beck is holding his event in DC)

The listed co conspirators and usual class warriors

•Rainbow PUSH Coalition
•Detroit Urban League
•Metro Detroit AFL-CIO
•USW District 2
•Progressive Democrats of America
•AFSCME Council 25
•City Clerk Janice Winfrey
•Jobs with Justice
•Coalition of Black Trade Unionists-Detroit
•Huntington Woods Peace, Citizenship and Education Project
•Moratorium Now!
•Michigan Emergency Committee Against the War
•Labor Council for Latin American Advancement
•Rep. John Conyers
•US Labor Against the War
•Earth Day Network
•United for Peace and Justice
•Michigan State AFL-CIO
•Code Pink/Michigan
•Teamsters Local 299
•The United Communities of America
•Michigan Welfare Rights Organization
•11th Hour for Peace
•Rep. John Dingell
•Jim Hightower

3 posted on 08/16/2010 6:36:16 PM PDT by cripplecreek (Remember the River Raisin! (look it up))
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To: cripplecreek

How about demanding that the tax freeloaders contribute? 50 percent of tax filers pay no federal income taxes with a large number in this group receiving tax welfare (refundable tax credits) and many other forms of transfer payments. The tax code encourages non work and under reporting of income in this group on a massive scale. The tax freeloaders are the problem, not the productive individuals currently taxed at 37.9 percent (35 percent income tax plus 2.9 percent Medical tax). The effective rate is actually higher because of deduction phase out and other confiscatory policies.

As a group, conservatives should demand an end to the free lunch given to tax freeloaders. Let them pay at a 10 percent rate. They will understand the costs of government services and perform a patriotic service.

4 posted on 08/16/2010 7:03:49 PM PDT by businessprofessor
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To: Son House
NOTHING will save them.

It'll be an electoral disaster not seen since the 19th Century.

5 posted on 08/16/2010 7:10:18 PM PDT by Mariner (USS Tarawa, VQ3, USS Benjamin Stoddert, NAVCAMS WestPac, 7th Fleet, Navcommsta Puget Sound)
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To: cripplecreek

Good list of communist front groups for attorney general Arapaio to investigate.

6 posted on 08/16/2010 7:23:47 PM PDT by screaminsunshine (m)
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To: Son House

Just looking at that list, the GOP could say, “OK, extend the tax cuts for everyone except those people if you must. We’ll go along with it for the sake of everyone else, but we’d really prefer to extend the tax cuts for everyone!”

7 posted on 08/16/2010 7:58:39 PM PDT by Vigilanteman (Obama: Fake black man. Fake Messiah. Fake American. How many fakes can you fit in one Zer0?)
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To: Son House
Pelosi summed up the progressive macroeconomic view this way:
“The Bush tax cuts for the wealthiest people in America did nothing to grow the economy during the Bush administration, did not create jobs, [and] did not reduce the deficit.”

This ignorant communist bi!ch is too stupid to breathe.
She should be locked up in a home somewhere to mumble to herself.


Taxpayer by Marital Status,
Taxable Income
Pre-2001 Code Bush Plan by 2006 or '03
Single, $0-6,000 15% 10%
Single, $6,000-27,050 15% 15%
Single, $27,050-65,550 28% 25%
Single, $65,550-136,750 31% 25%
Single, $136,750-297,350 36% 33%
Single, $297,350+ 39.6% 33%
Married, JF $0-12,000 15% 10%
Married, JF $12,000-45,200 15% 15%
Married, JF $45,200-109,250 28% 25%
Married,JF $109,250-166,500 31% 25%
Married, JF $166,500-297,350 36% 33%
Married, JF $297,350+ 39.6% 33%

June 9, 2008 marking 52 months of uninterrupted job growth!

(and don't even start about growing the deficit before reducing it!)

Budget Surplus/Deficits:
2001 ___ 2002 ___ 2003 ___ 2004 ___ 2005 ___ 2006 ___ 2007 ___ 2008
127 ____ -158 ____ -375 ____ -413 ____ -363 ____ -248 ____ -162 ____ -438

In 2006:
1. Consumer confidence stood at a 2 1/2 year high
2. Regular gasoline sold for $2.19 a gallon
3. The unemployment rate was 4.5%
4) The DOW JONES hit a record high 14,000+
5) American’s were buying new cars, taking cruises, vacations overseas, living large

In 2007 a demonrat CONgre$$ took control and look how things changed.

In 2007:
1. Consumer confidence plummeted
2. Gasoline went to $4 a gallon & climbed
3. Unemployment moved up to 5.5% (a 10% increase)
4. Americans began seeing their home equity drop by $12 trillion dollars and prices started dropping
5. 1% of American homes were in foreclosure
6. $2.5 trillion dollars evaporated from Consumers stocks, bonds, mutual fund investment portfolios.

8 posted on 08/16/2010 8:14:19 PM PDT by Just A Nobody ( (Better Dead than RED! NEVER AGAIN...Support our Troops! Beware the ENEMEDIA))
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To: Son House
damn right... the Ambitious vs the LAZY! NO PITY FOR THE LAZY!!!
9 posted on 08/16/2010 8:25:51 PM PDT by Chode (American Hedonist *DTOM* -ww- NO Pity for the LAZY)
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To: Son House
While this article points out how many "rich" will be affected negatively and I admit there are plenty in certain congressional districts, they are still vastly out numbered by the "gimme something for nothing" class.

I remember when the tax cuts went into effect and I saved thousands. Am I "rich"? Rich is a relative word and I don't consider my self as such but those with less than I have may think I'm rich. It's a game that democrats have successfully played for years.

10 posted on 08/16/2010 8:43:18 PM PDT by Graybeard58 (Nobody reads tag lines.)
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To: Graybeard58

One notes that the democrats/liberals never bring up the
aborted 55 million taxpayers who would no doubt have
contributed quite a bit in income and taxes by now.

11 posted on 08/16/2010 9:49:15 PM PDT by tet68 ( " We would not die in that man's company, that fears his fellowship to die with us...." Henry V.)
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To: Just A Nobody

Tax revenues to the Government also increased, it is Pelosi's Spending bills that increased the deficit.

12 posted on 08/17/2010 3:15:19 AM PDT by Son House (The Bush Tax Cuts Produced Better Results Than All The Democrat's Stimulus Bills Combined.)
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To: Graybeard58

Apparently I am rich. After years of hard work, DH and I have broken into the top tax bracket (barely). Of course with 2 kids in college and one in private HS, confiscatory tax rates and a mortgage, we are hardly rolling in it. We make too much money to receive any financial aid for college, and I am helping my son’s best friend with college as well.
It would be nice to feel as rich as the government thinks I am.(and working 14 hour days certainly does not qualify me as “idle rich”). Last year we broke 6 figures for our federal and state tax bill. The accountant told us to expect 15% more this year. We would almost be better off if I quit and we reduced our income dramatically, something that I plan to do as soon as kids are out of college. I understand John Galt perfectly.

13 posted on 08/17/2010 3:32:12 AM PDT by Mom MD (Jesus is the Light of the world!)
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To: Son House
Federal revenue in 2000 was about $1.8 trillion and in 2003 it was about $1.7 trillion. After the Bush tax cuts of 2003 federal revenue by 2006 jumped to $2.5 trillion.
14 posted on 08/17/2010 6:08:00 AM PDT by Just A Nobody ( (Better Dead than RED! NEVER AGAIN...Support our Troops! Beware the ENEMEDIA))
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