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Posted at 09:08 AM ET, 07/24/2012

The Morning Plum: The Senate GOP’s tax conundrum

What if Republican Senators are set to vote for a plan that would continue tax cuts for the wealthy while ending tax breaks for millions of poor and middle class Americans? Would that be politically problematic?

This week, the Senate will vote on the GOP and Dem plans for the Bush tax cuts. Democrats want to extend the tax cuts for all income up to $250,000, including that earned by people who make more than that amount, the “job creators” and “small business” people included.

The Republican plan would extend all the Bush tax cuts. But as Jonathan Weisman notes in a great piece this morning, it turns out the GOP plan also would allow a variety of tax breaks for the working poor and middle class — which were passed into law in the 2009 stimulus — to expire. Click through the link for the details on which stimulus tax breaks we’re talking about, but here’s the bottom line:

In all, the Republican plan would extend tax cuts for 2.7 million affluent families while allowing tax breaks to expire for 13 million on the bottom of the income spectrum, tax analysts say.

What’s particularly interesting is that Republicans are defending their plan to allow the lower end tax breaks to expire by arguing that they were supposed to be temporary. Of course, the tax cuts for the rich were also supposed to be temporary. We saw this dynamic play out during the payroll tax cut extension. Republicans argued that we shouldn’t extend the payroll tax cut because it was temporary and needed to be paid for, even as they continued to insist that the high end cuts should be extended.

The Democratic plan would continue these tax breaks for the poor and middle class. In fairness to Republicans, this undermines Dem claims to some degree because it would reduce the amount of revenues their approach would bring in. But Dems will argue that the last thing you want to do amid a bad economy is end tax breaks for poor and middle class Americans. Republicans, meanwhile, will also be arguing that the last thing you want to do amid a bad economy is raise taxes — but they will be talking about the taxes paid only by the top two percent of taxpayers, even as they are voting to end tax breaks for more than 10 million Americans at the lower end of the spectrum. The political contrast is pretty stark.

* Dems hope to gain advantage in tax fight: The above is another reason Dems are hoping to gain the advantage this summer by painting Republicans as obstructing middle class tax relief. Again: The Dem plan would keep the low tax rates for much of the income earned even by those job creators and small business people who earn over $250,000, and as a result, opponents of the Dem plan are mainly protecting the top one percent. That’s in chart form right here.

* Obama hits Romney for “splicing and dicing: Obama, at a fundraiser last night (per the White House transcript):

In politics we all tolerate a certain amount of spin. I understand these are the games that get played in political campaigns, although when folks just omit entire sentences of what you said, they start kind of splicing and dicing, you may have gone a little over the edge there.

That’s a reference to the Romney campaign video that deceptively edited Obama’s speech to fuse two separate chunks into one passage, omitting multiple sentences to portray his remarks as an insult to business people. The video explicitly concealed the fact that the Obama audio had been edited, yet news orgs have largely given it a pass.

* Obama campaign pushes back hard on “didn’t build that” lie”: The Obama campaign is out with a new Web video pointing out that Obama didn’t actually say business owners didn’t build their businesses. The video also makes the point that businesses do rely on infrastructure and on a smoothly functioning society, and argues that Romney’s policies — cuts to infrastructure and education spending — would actually be worse for small businesses.

This is where the Obama campaign’s pushback — which looks like it’s set to intensify — may be headed next.

* Romney undermines own argument against Obama: Mitt, in an interview on CNBC last night:

“We ought to give, whichever president is going to be elected, at least six months or a year to get those policies in place.”

You’d think this would make it harder for Romney to hammer Obama — as he frequently does — for the “net” jobs lost on his watch, a metric that includes all the jobs lost during Obama’s first six months and year. You’d think.

* Obama, Romney silent on gun control: A very good Post editorial slams Obama and Romney for their refusal in the wake of shooting to even debate a policy response to a problem that continues to claim the lives of Americans. As the editorial notes, the White House’s insistence that we should continue working within “existing law” is not exactly reassuring, since it isn’t clear existing law would have done anything to stop the massacre.

Key point: “politicians should not be permitted to evade a serious discussion of whether additional restrictions are warranted.” More later.

* The NRA owns politicians in both parties: Relatedly, this quote from GOP strategist Steve Schmidt sums up the problem:

“Politicians go to the N.R.A., Democrats and Republicans, and they basically read a script, which is not much different from a hostage video.”

* Politicians cowed by gun lobby: The New York Times editorial this morning on the topic is also hard hitting:

Sensible restrictions on ammunition and clips won’t eliminate mass shootings; they may make them less likely and reduce their level of violence. Many politicians of both parties know this. To overcome their fear of the gun lobby, they need only look at the faces of the victims in Aurora, Colo.

* Obama’s new ad viewed as “seminal”: Yesterday the Obama campaign released a new ad featuring Obama appealing to voters to make this election a choice between two competing sets of policies to secure our economic future and bring down the deficit. On Morning Joe, New York Magazine’s John Heilemann had some smart things to say about the spot, calling it “seminal” and noting that it’s a true contrast ad with no negative attacks on Romney.

Polls suggest that Romney continues to enjoy a presumption of competence on the economy and the deficit, and Obama’s best hope may be to get voters to focus on his actual proposals to tackle them.

* And super PACs are coming to Romney’s rescue: Amazing numbers from the Fix team:

Republican-aligned super PACs and other outside conservative groups have spent more than $144 million on general election ads in swing presidential states....Roughly 80 percent of all ad spending by Republicans on the general election has come from these super PACs, as Romney has expended a relatively meager $35 million to date on ads in swing states, according to ad buy figures provided to the Fix by a GOP media buyer.

The political scientists tell us all this spending is unlikely to have too much of an impact. Perhaps. But this is yet another way this election is taking us into truly uncharted terrritory.

What else?

By  |  09:08 AM ET, 07/24/2012

 
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