At the end of the day, the Republican movement on extending tax cuts just for the middle class turns out to be apparently no movement at all. By now most of the inside-the-Beltway crowd – if very few real people across the country – knows that in a pre-taped interview with CBS’s Face the Nation that aired on Sunday, Minority Leader John Boehner conceded that if backed into a corner, Republicans wouldn’t vote down extending George W. Bush’s tax cuts for the middle class in order to save cuts for the richest of Americans.
“If the only option I have is to vote for some of those tax reductions, I’ll vote for it,” Boehner said. “But I’ve been making the point now for months that we need to extend all the current rates for all Americans if we want to get our economy going again, and we want to get jobs in America.”
“So you are saying you would vote for the middle class tax cuts, if that’s all you can get done?” Schieffer asked.
“Bob, we don’t know what the bill’s going to say, alright?” Boehner replied. “If the only option I have is to vote for those at $250,000 and below, of course I’m going to do that. But I’m going to do everything I can to fight to make sure that we extend the current tax rates for all Americans.”
(Side note to Dems: I know you need a villain, but this strategy didn’t work so well when Republicans tried to demonize Nancy Pelosi ahead of the 2006 elections, remember?).
Democrats, of course, have been busy asking every GOP candidate and incumbent if they back Boehner’s stance on the tax cuts – which expire at the end of the year if they’re not renewed. Dems want to renew only those for folks making less than $250,000 a year; Republicans want all of them made permanent.
Boehner’s folks have been busy trying to emphasize the fact that his message was, first and foremost, that the GOP preference is to renew ALL the tax cuts. From Boehner’s spokesman Michael Steel:
Boehner supports stopping all the tax hikes, and that’s what he said we are going to fight for on Face the Nation. Republicans have offered a two-part plan to (1) freeze all the tax rates for two years; and (2) cut spending back to 2008 levels. That is Boehner’s position because it’s the only thing that’s going to help our economy create jobs. If Speaker Pelosi allows an open process, we’re confident our plan to freeze all the rates would win out.
Personally, I think most people are focusing on the wrong part of the interview. Far more interesting to me is Boehner’s agreement with Schieffer that letting the tax cuts for the wealthiest Americans expire would only affect 3% of small businesses. The GOP argument for making all of the tax cuts permanent is that raising taxes on small businesses, which created more than two-thirds of U.S. jobs, would further depress the economy.
“You keep talking about all the small business people that are going to get taxed,” Schieffer said. Yet, he said, according to figures by the non-partisan Joint Committee on Taxation, only 3% would be affected by the proposal. “Do you quarrel with that figure?” he asked.
“Well, it may be 3%, but it’s half of small business income, because obviously the top 3% have half of the gross income for those companies that we would term ‘small businesses,'” Boehner replied. “And this is why you don’t want to punish these people at a time when you have a weak economy. We need them to reinvest in their business.”
To my ear, Boehner just conceded that just about the only people that would be affected by a tax hike on the wealthiest of Americans are hedge fund owners and partners in law firms, which count as small businesses and account for the vast majority of small business income.
Either way, the entire debate is purely academic. Even if the House passes the tax cuts extension – which is by no means guaranteed – it’s DOA in the Senate. Senate GOP leaders today reaffirmed their staunch opposition to extending only the middle class tax cuts — unlike Boehner they don’t mind holding them hostage in order to get the tax cuts for the rich extended. And even if Republicans weren’t united, Dems have at least for defections in the Senate (Joe, Lieberman, Jim Webb, Kent Conrad and Ben Nelson) meaning there’s no way they could overcome a filibuster.