GOP Uses Health Care Playbook for Tax Cuts

Posted August 4, 2010 at 6:32pm

Senate Republicans stepped up their withering criticism of Democrats over taxes Wednesday, believing they have a line of attack that could prove as effective with voters in the midterm elections as their opposition to health care reform was last year.

Republican leaders, flanked by a trio of small-business owners at a Capitol Hill news conference, called for the tax cuts enacted in 2001 and 2003 under President George W. Bush to be preserved for all income brackets. Republicans argue that allowing the tax cuts to expire for the top two brackets — as President Barack Obama and most Democrats propose — would hurt hiring and wages.

Republicans are couching their push to extend the Bush tax cuts as a choice between creating jobs and continued high unemployment, and they are confident they can overpower Democratic charges that the GOP hypocritically supports deficit spending as long as the money is spent on tax cuts for the rich.

“The tax that will be increased is going to directly impact this small-businessman right here. He already said so,” Senate Minority Whip Jon Kyl (R-Ariz.) said, pointing to Craig Fritsche, the owner of Tart Lumber in Virginia. “Do we need to raise taxes on people who create the jobs in our country? Small businesses generally create jobs first coming out of a recession. So it’s both contrary to economic growth and job creation — and it hurts people.”

“Raising taxes to deal with the deficit is like a bailout for the big spenders,” Kyl continued. “The answer is to stop spending so much and promote economic growth so that the economic recovery and the addition to the gross domestic product will generate the tax revenue that the government needs.”

Kyl was joined by Minority Leader Mitch McConnell (R-Ky.), Republican Conference Chairman Lamar Alexander (Tenn.) and Sen. Johnny Isakson (R-Ga.) to argue that raising taxes in the middle of a recession was simply another in a long line of policies pushed by Obama and the Democrats that are impeding economic growth and job creation.

Republicans in the House and Senate have made such charges since Obama took office and made clear his intention to let the Bush tax cuts expire as scheduled at the end of the year for any individual or family earning more than $250,000 per year.

But Wednesday’s news conference, coming shortly before the Senate is scheduled to conclude what could be its last meaningful legislative work period of the year and adjourn for the August recess, functioned as a more formal rollout of a key component of the GOP’s policy agenda and campaign message for the November elections.

Majority Leader Harry Reid (D-Nev.) might bring the tax issue to the floor in September, and many Democrats have said it’s a debate they’re happy to have with the Republicans.

“You know, Republicans say they care about the deficit, but in actuality what they want to do — at least some of them here — is to protect the people who are making multimillions and multibillions. And so I would love to have that vote to protect everybody except the millionaires,” said Sen. Barbara Boxer (D-Calif.), who is facing a competitive re-election bid. “And those people who are making that kind of money, they’ve told me that they feel fine contributing to this country.”

During last year’s August recess, Republicans gained the upper hand with the public on health care reform. During a series of town hall meetings nationwide, voters voiced concern about the legislation. It ultimately was enacted, but the political battle reinvigorated the GOP. Most polls still show more Americans oppose the law than support it, and Republicans hope the battle over the tax cuts goes similarly heading into November.

Until about a decade ago, Republicans had the edge on the issue of taxes. Beginning in 1980, the GOP generally stood in support of tax cuts of any kind, while Democrats often argued against them. But Democrats began chipping away at the GOP’s advantage when they shifted their rhetoric to favoring tax cuts for the middle class, while asserting that across-the-board cuts flowed unfairly to the rich while creating huge deficits.

This is partly why Republicans are now focusing on the effect of the expiration of the Bush tax cuts on small businesses and, accordingly, the jobs they create. Many small businesses are not structured as corporations, and their owners file as individual taxpayers, meaning they could be subject to any increase in taxes levied against the top two income brackets.

Republicans argue that the more these businesses have to pay in taxes, the less money they have to hire new workers or give employees raises.

“Now, we see, the proposal is to raise taxes on half the small businesses in the middle of a recession,” Alexander said. “And, of course, that makes it hard to create jobs. So we need a change of direction. The change of direction needs to be a focus on creating private-sector jobs, instead of a series of policies that make it harder to create jobs.”