Tax policies and priorities

TAX POLICIES AND PRIORITIES…. It’s been odd to watch the striking shift in Republican rhetoric as it relates to economic priorities. Last year, the standard GOP line was that reducing the budget deficit, which they themselves had created, was the single most important goal for policymakers. This year, the new GOP line is that tax cuts for the wealthy are paramount, and the cost should just be added to that deficit Republicans pretended to care about last year.

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Regardless, in the coming months, one of the key political battles will be over what, exactly, officials should do about the Bush-era tax policies that, by Republicans’ design, are due to expire at the end of the year. President Obama and most Democrats are touting the same plan presented in the 2008 campaign: keep the lower rates for the middle class, while allowing the top rates for the rich to expire on schedule. For Republicans, that’s not good enough — those millionaires and billionaires need champions, and GOP leaders intend to fill the role.

The Washington Post has a good report, with an incredibly helpful chart, on just how much the GOP approach would cost: “A Republican plan to extend tax cuts for the rich would add more than $36 billion to the federal deficit next year — and transfer the bulk of that cash into the pockets of the nation’s millionaires, according to a congressional analysis released Wednesday.”

The study, completed by the nonpartisan Joint Committee on Taxation, only looked at the effects for 2011, and they’re pretty striking — Republicans want to give millionaires and billionaires an average tax cut per household of about $100,000, every penny of which would be added to the deficit.

As a political matter, it’s at least possible, if not likely, that the GOP feels so strongly about this that they’ll block the Democratic plan (keeping the lower rates for those making less than $250,000) unless the majority goes along with the Republican plan (keeping the lower rates for the wealthy).

It sets up an interesting political fight in an election context — Dems fighting for the middle class, while Republicans fight for the rich. In the wake of the GOP’s opposition to the state-aid jobs bill, it creates a real opportunity for Democrats to reframe the parties’ fundamental differences when it comes to economic priorities.

Indeed, take a good look at this chart the Post put together. (If you’re having trouble reading it, click on it.) Notice that every single taxpayer making less than $250,000 is better off under the Democratic plan than the Republican plan, while the GOP approach overwhelmingly benefits millionaires and billionaires.

As working Americans struggle with a fragile recovery and high unemployment, Republican priorities — fight for the rich at all costs — not only seem radically out of touch, they also carry considerable political risks.

Referring to the GOP policy, Michael Tomasky concluded, “This is their agenda. If it’s for millionaires, it’s good. Period. It’s never been quite this naked, but there it is. How the idiot Democrats are going to manage to lose to a bunch of people whose only real domestic agenda is to hand out $100,000 bills to millionaires, busting the budget while doing it, makes me sick to my stomach.”

As I noted yesterday, it’s not every day the two parties’ approaches to government get spelled out so clearly, giving the public a stark choice between two very different ideologies.