The Los Angeles Times has one of the better discussions about the unabashed Democratic plans to raise taxes – in a very, very, big way – should they win in 2008. It is not just the politics but also covers some of the policy differences. While there is some difference of opinion among the Democratic candidates, all of them are flat out in favor of tax hikes.
WASHINGTON — More than two decades after presidential candidate Walter F. Mondale called for tax increases — and lost the White House in a landslide — the Democratic Party is on the verge of a major political gamble: Some of its leading members are proposing an array of tax hikes on wealthier Americans.
All of the major Democratic presidential candidates would allow President Bush's tax cuts for wealthier households to lapse. Most support raising the cap on income subject to Social Security taxes. Some want to raise taxes on capital gains and other investment income.
On Capitol Hill, a leading Democrat — House Ways and Means Committee Chairman Charles B. Rangel of New York — has proposed an additional tax on wealthy people and a levy on hedge fund managers to help pay for easing the tax burden on the middle class.
Some party strategists say calling for upper-income tax increases does not pose the political risk it once did because of wide public concern, particularly among Democratic voters, that the gap between rich and poor is growing. Income inequality has become an increasingly salient issue at a time when, amid news of astronomical corporate salaries, many people feel economically insecure about such bread-and-butter items as healthcare, pensions and college costs.
"The top 300,000 income-earners in America now make more than the bottom 150 million combined," former North Carolina Sen. John Edwards said when he unveiled his plan to raise taxes on the rich and cut them for the middle class. "Our tax code has shifted most of the burden onto the backs of working Americans."
But Republicans still see the emerging debate on taxes as a political gift. They have called Rangel's bill "the mother of all tax hikes," and their House campaign committee sent news releases and videos attacking the proposed legislation to 50 Democrats' districts.
Bush this week previewed the critique awaiting Democrats on the 2008 campaign trail. "They haven't seen a bill they could not solve without shoving a tax hike into it," he said of congressional Democrats, who included a cigarette-tax hike in a bill to expand children's health insurance. "In other words, they believe in raising taxes, and we don't."
The biggest driver: the alternative minimum tax. The Democrats unleashed that tax on Americans to soak the "rich". The definition of rich, however has been steadily defined downward by the Democrats as the years have gone by. Thus the tax has come down hard on the middle class in recent years. Washington has become quite addicted to the money, of course and now they need to fix the problem – and they plan to soak the "rich" to do so. Anyone else see the irony here? When these new tax hikes become increasingly crushing to the middle class in the future, Democrats will have no choice but to define "rich" as a lower and lower figure to keep the revenue coming in.
You can already see what is happening in Washington. Congress (and frankly, both parties have problems in this area) are trying to shove massively larded spending bills through. The bills are stuffed to the bursting point with pork and someone is going to have to pay for all that.
