Calling Mitt Romney stupid hasn’t made other Republicans any smarter. John Boehner is already making the same mistakes.
For a while, the House Speaker was careful to match Obama’s explicit call for higher tax rates for the top 2% with pleasing generalities: Please, higher revenues not higher tax rates; and, yes, special interests should give up their loopholes and deductions.
This approach united Republicans. It would likely work as firm policy in another presidential television debate. However, it didn’t go far enough as a compromise formula for actually legislating a package of tax changes with Obama. And Republicans insist that the voters want them to lead too. So Boehner, in a letter to the President last week, went further: He’d agree to raise $800 billion by cutting the deductions and loopholes of the “same people” Obama would tax at higher rates.
If you insist on negotiating, not just campaigning in public, you have to get specific. However, Boehner has bought himself a world of trouble. The reaction to what he’s proposed, in fact, may be enough to force him to work within the revenue formula Obama has long proposed.
Konrad Yakabuski in today’s Globe and Mail neatly summarizes Obama’s response and, more importantly, the alarm of the unintended, lovable victims of Boehner's counter-proposal: America’s charities and its fragile housing recovery.
“The United Way and other non-profit organizations held a 'Hill Day' on Wednesday to press members of Congress not to change the tax deduction for the $200-billion Americans donate to charities each year.
“The deduction costs the federal treasury more than $50-billion in foregone tax revenue annually. Charities worry donations would dry up without it.”
Boehner can’t find his $800 billion without taking away that $50 billion of offsetting tax relief for those who give most generously to charities.
Yet it’s Republican orthodoxy—and widely accepted—that significantly raising taxes on work and consumer activities alters what taxpayers do with their time and money. Raise marginal income tax rates too high and many will stay home longer and putter in the basement. Make gasoline considerably more expensive and they’ll drive less.
It defies faith and common sense to believe that taking away $50 billion in targeted tax relief for charitable giving will not materially dampen support for charities.
If Boehner thinks the rich will carry on as if nothing happened, then what’s the problem with Obama’s modest across-the-board increase in the top tax rates on their incomes? They’ll lay off their workers while giving more to charity?