Stakes are high as Republicans try to destroy Obama’s progressive legacy
Republicans will be committed to destroying Obamacare and slashing taxes on wealthy
US President Barack Obama: after the 2012 election he was able to go through with a significant rise in taxes on high incomes. Photograph: Zach Gibson/The New York Times
You have to be seriously geeky to get excited when the Internal Revenue Service releases new statistics. Well, I’m a big geek; like quite a few others who work on policy issues I was eagerly awaiting the IRS’s tax tables for 2013, which were released last week.
And what these tables show is that elections really do have consequences.
You might think this is obvious. But on the left, in particular, there are some who, disappointed by the limits of what President Barack Obama has accomplished, minimise the differences between the parties.
Whoever the next president is, they assert – or at least, whoever it is if it’s not Bernie Sanders – things will remain pretty much the same, with the wealthy continuing to dominate the scene.
And it’s true that if you were expecting Obama to preside over a transformation of America’s political and economic scene, what he’s achieved can seem like a big letdown.
One of the important consequences of the 2012 election was that Obama was able to go through with a significant rise in taxes on high incomes.
This was partly achieved by allowing the upper end of the Bush tax cuts to expire; there were also new taxes on high incomes passed along with the Affordable Care Act, aka Obamacare. If Mitt Romney had won we can be sure that Republicans would have found a way to prevent these tax rises. And we can now see what happened because he didn’t.
According to the new tables, the average income tax rate for 99 per cent of Americans barely changed from 2012 to 2013, but the tax rate for the top 1 per cent rose by more than four percentage points.
The tax rise was even bigger for very high incomes: 6.5 percentage points for the top 0.01 per cent. These numbers aren’t enough to give us a full picture of taxes at the top, which requires taking account of other taxes, especially taxes on corporate profits that indirectly affect the income of stockholders.
Yet the available numbers are consistent with Congressional Budget Office projections of the effects of the 2013 tax increases – projections which said the effective federal tax rate on the 1 per cent would rise roughly back to its pre-Reagan level.
No, really: for top incomes Obama has effectively rolled back not just the Bush tax cuts but Reagan’s as well.
The point, of course, was not to punish the rich but to raise money for progressive priorities, and while the 2013 tax rise wasn’t gigantic it was significant.
Those higher rates on the 1 per cent correspond to some $70 billion a year in revenue.
This happens to be in the same ballpark as both food stamps and budget office estimates of this year’s net outlays on Obamacare. So we’re not talking about something trivial.
Speaking of Obamacare, that’s another thing Republicans would surely have killed if 2012 had gone the other way. Instead the programme went into effect at the beginning of 2014. And the impact on healthcare has been huge.
According to estimates from the Centers for Disease Control and Prevention, the number of uninsured Americans fell 17 million between 2012 and the first half of 2015, with further declines most likely ahead.
So the 2012 election had major consequences. America would look very different today if it had gone the other way.
In fact the US economy has now added more than twice as many private sector jobs under Obama as it did over the same period of the George W Bush administration.
The unemployment rate is a full point lower than the rate Romney promised to achieve by the end of this year.
In other words the 2012 election didn’t just allow progressives to achieve some important goals. It also gave them an opportunity to show that achieving these goals is feasible.
No, asking the rich to pay more in taxes while helping the less fortunate won’t destroy the economy.
So now we’re heading for another presidential election. And once again the stakes are high.
Whoever the Republicans nominate will be committed to destroying Obamacare and slashing taxes on the wealthy – in fact the current GOP tax-cut plans make the Bush cuts look puny.
Whoever the Democrats nominate will be committed to defending the achievements of the past seven years.
Presidential elections matter a lot even if the people on the ballot aren’t as fiery as you might like.
Don’t let anyone tell you otherwise. – (New York Times service)