President Obama the self-proclaimed compromiser sounds the same as Obama the partisan politician running for reelection. At his press conference Wednesday, he harped on what had been a chief talking point of his campaign—raising taxes for the wealthy.
He not only brought it up in his opening statement, it was the thrust of those remarks. He touted the tax hike on the top 2 percent of taxpayers in response to questions about that subject specifically and to a question about the “fiscal cliff.” And he used arguments for the tax increase lifted directly from his campaign speeches.
The voters, he said, endorsed the idea, in effect giving him a mandate. The majority of voters agreed with me, Obama told reporters. “By the way, more voters agreed with me on this issue than voted for me.”
According to the exit poll, that’s not true. It found that 47 percent of voters prefer to raise taxes only on the wealthy. Obama got 51 percent of the total national vote.
It was Obama’s first press conference in 8 months and his first lengthy discussion of issues facing the country since his reelection last week. While all but demanding that congressional Republicans accede to the tax hike, he said repeatedly that he is eager to compromise with them.
“If we’re going to be serious about the reducing the deficit,” Obama said, it’s important to raise taxes on the rich. In their case, he wants to increase the rate on individual income from 35 percent to 39.6 percent, curb their deductions, and also raise the tax rates on capital gains, dividends, and inheritances. This would be achieved by allowing the Bush tax cuts to expire at the end of 2012 for the affluent.
He said this is “the foundation for a deal” during the lame duck session of Congress after Thanksgiving. The deal would retain the Bush tax cuts, Obama said, for 98 percent of taxpayers and 97 percent of small businesses. Such a deal would help the economy, protect the middle class, create jobs, and give “businesses confidence that they’re going to have consumers during the holiday season.”
The president didn’t advocate any other proposals to curb a 2013 deficit expected to exceed $1 trillion for the fifth straight year. He said he’d take a “serious look” at entitlement spending and is “willing to look at” discretionary spending as well. But again, no specifics. His emphasis was solely on raising taxes.
Obama was asked why he extended the Bush tax cuts in 2010 for all taxpayers but would deny them now to taxpayers making more than $250,000 a year. “The economy was in a different situation” then, he said. “We were still very much in the early parts of recovering from the worst economic crisis since the Great Depression.”
But rather than gain strength since then, the economy has grown more slowly than it had in 2010. Obama didn’t address that, nor did he deal with the role the wealthy play as investors and job creators. By increasing their taxes, he insisted, “We are actually removing half of the fiscal cliff, half of the danger to our economy.”
On that point, the president’s math is in serious dispute. Barron’s, the financial newspaper, describes the fiscal cliff as “a unique convergence of tax increases that legislators could still reverse of mitigate. Items on that list, totaling nearly $475 billion in 2013, are key drivers of the tax shock. By raising the rates for those earning $250,000 or more, tax revenues would increase by $66 billion.”