"It would be fair to say this tax increase on job creators is the kind of proposal both parties have opposed in the past," [Boehner spokesman] Michael Steel said in a written statement.What are Eric Cantor and John Boehner talking about? This: the president has suggested paying for the jobs bill by limiting itemized tax deductions for the top 2% of American income earners, by treating hedge fund earnings as regular income rather than capital gains, and by eliminating tax loopholes for the oil companies to the tune of $40 billion. The Washington Post has a handy chart that explains this well:
House Majority Leader Eric Cantor echoed that stance, telling reporters: "I sure hope that the president is not suggesting that we pay for his proposals with a massive tax increase at the end of 2012 on the job creators that we're actually counting on to reduce unemployment."
I had covered this idea of eliminating itemized deductions in my series explaining the recommendations from the Fiscal Commission that the President set up last year. I noted then that far and away, the top fifth of income earners, and especially the top 1% of money makers in America take the benefit the most from itemized deductions, making the whole itemized deduction system into a regressive tax system. For the top one percent, itemized deductions lower their share of taxes by a whopping 15%.
Of course, we all know the GOP's real motive to find a way to oppose the president's plan: it's political. They are afraid to do anything that can be considered a "win" for the President. They would rather the country fail than the President succeed. That is of course the real reason for GOP opposition to the president's plan. The headwind they are facing as the president has taken his case to the American people is that the President begins this campaign with a significant advantage among the American people for his leadership on the economy over the Republicans, as well as with major support for elements of his plan from both the American people in general and specifically and significantly from independent voters.
But still, the Republicans are right that the president is talking about raising taxes on the "job creators," isn't he? Not exactly. See, the president's proposal is merely to shift the tax breaks - it would change it so that these so-called 'job creators' wouldn't be able to get the breaks just for the privilege of being called that. They would actually have to create jobs to get the credits! The oil and gas industry wants to earn that $40 billion in tax breaks back? All they have to do is create 10 million jobs for the long term unemployed, or hire enough new workers to get enough of the payroll tax break on the employer side, or some combination of it. The rich want their tax breaks back? Fine, let's see you actually create jobs and you can get the credits back.
This is an incredibly smart move on the president's part. Plus, it has the added benefit of being substantive. As the president said, we no longer have the luxury of both investing in our future and wasting taxpayer money on giveaways to multinationals. We no longer have the luxury to both incentivize small businesses to create jobs and incentivize ubercorporations to horde cash. We no longer have the luxury to both rebuild America and coddle corporate jet owners.
So the president is calling the Republicans' bluff and challenging the "job creators" meme the GOP has invented to protect special interest boondoggles for the rich. He is basically saying through his proposal: You want tax breaks because you are the job creators? Fine, let's see you actually create jobs and you can keep your tax breaks. Otherwise, STFU.
Speaking of which, it's time Democrats in Congress (both "blue dog" and non-blue dog) got behind the president solidly on this. While Democrats are generally supportive, some in Congress have been less than committal. Whether it's Bob Casey scared of 'big bills' or Pete DeFazio indiscriminately bashing all tax breaks including those actually tied to creating actual jobs, they need to get on board, and fast. Everyone who claims to be a progressive, liberal, Democrat or even in favor of job creation should be squarely on this side. We should be asking every Congresscritter one question: Should the rich and powerful have tax breaks just because they are rich and powerful or should they actually be required to live up to their manufactured title of 'job creators' in order to get those tax breaks?
This is not the only possible way the President is willing to accept for paying for his proposals, of course. As long as the actual job creation ideas are accepted by Congress, the President is open to other methods that Congress can find to pay for them. That's also not great for Republicans. By putting out his own proposal to pay for it and by calling for Republicans to come up with alternatives if they don't want to accept his proposal, he's charging them with the ... gasp! ... responsibility to govern!
Well, Congress has the responsibility to govern. Pass the jobs bill. NOW! Call Congress - House.gov, Senate.gov. You know the drill.