Thursday, April 16, 2009

Tea Parties End With A Whimper

The Tea Bagging movement is really sad. The Tea Party protest for Lafayette Square in Washington, D.C. drew hundreds of people. The truck to dump the million tea bags drove around for hours. The truck driver finally dumped his tea bags without much fanfare.

In October 2002, the first major Iraq war protests drew 100,000 in the District of Columbia and 50,000 in San Francisco. Fox News has been promoting the tea parties for weeks. Nate Silver lists the Denver tea party's as the most attended at 5,000. The Huffington Post reports Fresno, California having 7,500 in attendance. The numbers can be disputed. I fail to see this movement as having much traction.

These are the same conservative that believe Barack Obama is not an American citizen. Most tea party protesters are rallying against their own economic self-interest. Obama's Make Work Pay policy will provide tax cuts to 95 percent of Americans.

Middle class families will see their taxes cut – and no family making less than $250,000 will see their taxes increase. The typical middle class family will receive well over $1,000 in tax relief under the Obama plan, and will pay tax rates that are 20% lower than they faced under President Reagan. According to the Tax Policy Center, the Obama plan provides three times as much tax relief for middle class families as the McCain plan.

Families making more than $250,000 will pay either the same or lower tax rates than they paid in the 1990s. Obama will ask the wealthiest 2% of families to give back a portion of the tax cuts they have received over the past eight years to ensure we are restoring fairness and returning to fiscal responsibility. But no family will pay higher tax rates than they would have paid in the 1990s. In fact, dividend rates would be 39 percent lower than what President Bush proposed in his 2001 tax cut.

Obama’s plan will cut taxes overall, reducing revenues to below the levels that prevailed under Ronald Reagan (less than 18.2 percent of GDP). The Obama tax plan is a net tax cut – his tax relief for middle class families is larger than the revenue raised by his tax changes for families over $250,000. Coupled with his commitment to cut unnecessary spending, Obama will pay for this tax relief while bringing down the budget deficit.

The Tea Baggers are protesting against increased taxes of the top 5 percent. Obama repeatedly stated he will not extend the Bush tax cuts. The media assumed Obama would immediately end the Bush tax cuts.

Asked Monday when those hikes might go into effect, Obama said, "Whether that's done through repeal, or whether that's done because the Bush tax cuts are not renewed, is something that my economic team will be providing me a recommendation on."

Obama will let the cuts lapse in 2011. Obama will go into the 2012 election by claiming he hasn't raised taxes. In a technical sense, that will be true. It will also be true Obama didn't do anything to decrease the taxes of the wealthy. Obama is giving the GOP little ground to attack him on taxes.

Conservatives have been obsessed about taxes. The fringe conservatives don't know that Obama is cutting taxes and wouldn't believe it if the evidence was in front of them. Glenn Beck, Sean Hannity, and Rush Limbaugh say Obama is raising taxes. And no one knows more about economic policy than a talk radio host.

A CBS/New York Times poll 71 percent support tax increases for the wealthy. I have seen other polls with the same trend. The GOP message of tax cuts for the wealthy at all cost is a political loser. The fringe conservative base is going to scare off voters. This photo by Edward Favara from a Tampa tea party rally is a perfect example.

Photo by Edward Favara

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