The partisan battle over taxing success threatens to distract from needed recovery efforts, just as the president’s obsession with replacing our health care system prevented legislators from focusing on job creation. We have hit a record 62-year high for long-term unemployment , and need to get the campaign against the wealthy behind us so we can move forward in January and fix the economy.
The future looked brighter in February 2009. So rosy was the administration’s outlook that President Obama’s Budget Director, Peter Orszag, believed we would recover from the recession before the Bush tax rates expired in 2011:
One of the questions I received throughout the day today, as we released the Fiscal Year 2010 budget, is why we are proposing to raise taxes on high-income taxpayers during a recession. And the answer is simple: we’re not. 
Mr. Orszag resigned in July 2010.
The rhetoric has since shifted to accommodate the failure of the administration’s economic policies. In February 2009 officials expected the recession to be over by 2011, but planned to raise taxes on the wealthy anyway as a deficit reduction measure. Now, with no end in sight to crippling joblessness, the president criticizes the “tax cut” for higher income taxpayers on the grounds that it is not an effective stimulus policy. Christina Roemer, who chaired the Council of Economic Advisors until August 2010, delivered the party line:
First, extending the high-income tax cuts would provide very little job creation in 2011. There is widespread agreement that the short-run economic benefits of high-income tax cuts are small. 
The Congressional Budget Office made the same observation about Mr. Obama’s plans for infrastructure spending, which they awarded a last place tie on a list of policies and their potential to create jobs in 2010 and 2011 (see: A Federal Infrastructure Bank: Stashing Cash For A Jobless Tomorrow). Why does the president still opt for billions in infrastructure spending, which will not create jobs quickly, while rejecting a tax rate extension on the same grounds? Labor unions support infrastructure spending. They also support the Democratic Party.
This is an issue of party politics and passing out rewards and punishment, not economic recovery. When organized labor put pressure on the administration to forego billions in tax revenue by approving a delay on the excise tax for high-cost health plans until 2018, the decision was a foregone conclusion. The wealthy have been lumped in with Wall Street as unfairly benefitting at the expense of the middle class, and that they deserve to be punished has also become a foregone conclusion.
Fortunately, tax rates are all but irrelevant because Washington’s unfettered spending has put us on a course that will lead to disaster whether or not we raise taxes. Even if we accede to Democratic desires and begin to punish the wealthy tomorrow, federal debt will continue to be unsustainable.
There was a time when success in America had no ceiling, and certainly not a minimalist $250,000 ceiling that separates poor from rich, and good from evil. The president talks about small business job creation, but why should business owners invest, expand, and risk financial liability when they will become objects of scorn and contempt if they beat the odds, achieve their dreams, and break through that $250,000 benchmark of financial success? This is not the America we were raised to believe in. This is an America whose Democratic leaders have given up hope, and who intend to distribute whatever they can smash and grab in their efforts to retain a shrinking base of support.
1..Congressional Research Service. The Bush Tax Cuts and the Economy. Thomas L. Hungerford. September 3, 2010. p. 3.
2..Office of Management and Budget. Clearing up a misconception: “tax hikes during a recession”? Peter Orszag. February 26 2009.
3..Council of Economic Advisors. Extending High-Income Tax Cuts is the Wrong Answer for the Recovery. Christina Romer. July 28, 2010.