Facing South

Do Democrats need to cave on extending Bush's tax cuts?

Facing South
Facing South
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In 1992, country singer Travis Tritt released one of the year's hottest singles in the '90s country revival: "Lord Have Mercy on the Working Man." Penned by Greek-born songwriter Kostas (go figure), Tritt's tune had this memorable refrain:

Why's the rich man dancing
While the poor man pays the band?

The populist sentiment made sense: The first President Bush's term, marked by a deepening recession and falling wages, was just coming to an end. But Tritt's song didn't say anything about rising income inequality or corporations shipping record numbers of jobs overseas [pdf]to boost profits. Kostas and Tritt instead directed their anger at the government and taxes, a theme played out in the song's video and lyrics:

Uncle Sam's got his hands in my pockets
And he helps himself each time he needs a dime

Tritt's country ditty crystallizes perfectly the thinking behind conservatives' anti-tax crusade, now playing out in the debate over whether to extend President Bush's tax cuts for the wealthy: Forget about greedy Wall Street; your problems are in tax-and-spend Washington (even though government spending accounts for less than 20% of our Gross Domestic Product, one of the smallest shares in the world).

What's more, they claim, tax cuts aren't about helping the rich (even though the wealthy would undeniably benefit the most); it's about helping average folks. And now a handful of Democrats -- nervously eying the November elections -- are going along and joining the GOP's fight against letting the Bush tax cuts expire.

But Democrats in search of moderate votes shouldn't be so quick to buy the anti-tax line. The reality is that across the country -- even in supposed conservative strongholds like the South -- there's a strong populist current that rejects the simplistic anti-tax views of Tritt and anti-government conservatives.

In 2006, the Pew Research Center released its latest survey of political ideology in the U.S. As I reported at the time, their main point was that our usual way of breaking down the nation's electorate -- liberal/conservative, Republican/Democrat, red/blue -- grossly mangled the more complicated political views held by most people in the country.

One group that gets overlooked in our right/left thinking: populists, which Pew describes as those who "favor an active role for government in both the economic and the social spheres." They don't think corporations and "the market" should have unfettered reign, but they also favor government involvement on "morality" issues like abortion.

Populists are everywhere: In Pew's survey, populists make up 16% of the population -- making it one of the most popular ideologies in the country ("liberal" was first at 18%, "conservative" third at 16%).

Populists aren't just white guys: In fact, "populist" was the highest-ranking ideology among women and African-Americans nationally.

And populists are very big in the South: According to Pew, nearly half (47%) of populists live in Southern states.

So what do all these populists think about the Bush tax cuts which largely benefit the rich? Pew hasn't done a more recent survey, but in 2006, they didn't like them. Pew found that only 25% of populists wanted to make the Bush tax cuts permanent -- the only group with lower support were those identified as "liberals."

That was in line with the populists' overall progressive economic outlook: businesses make too much profit, NAFTA-like trade deals aren't good for the country and our nation needed to boost the minimum wage.

Populists are also a huge political swing group: 50% lean or identify as Republican; 40% lean or identify as Democrats. This suggests that when it comes to voting for candidates, Republicans have succeeded in getting many populists to chose their pro-government stance on "values" issues like abortion over their pro-government stance on economic issues like taxes.

But Democrats, take heed: If, in a straight up-and-down vote, you take a stand against a tax policy that largely benefits the wealthy, like a bill extending the Bush-era tax cuts, millions of populists (including Republicans) will be on your side.

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re: Do Democrats need to cave on extending Bush's tax cuts?

Wow, the plethora of ignorance on all points here is astounding.

re: Do Democrats need to cave on extending Bush's tax cuts?

Apparently you have never run a business or understand much about economics. The last time I checked, poor people don't create jobs. Don't make this into a class issue, it's a jobs issue. Redistributing wealth does not create more wealth and just encourages flight of capital which lessens the opportunity for job creation which also reduces tax revenue. You don't raise taxes in the middle of a recession unless you want to kill growth. We are in a global economy now and jobs will flow faster offshore if the tax code does not encorage growth. Capitalism is brutal but it is also efficient. The prudent thing would be to allow the cuts to extend until we are out of the woods which may be never based on the debt hole Obama has put us in. The top 10% pay 70% of all taxes and also include small businesses that are the engine of job creation.

re: Do Democrats need to cave on extending Bush's tax cuts?

Anonymous #2 -- The CBO recently did an analysis that showed that tax breaks for the wealthiest in the country is one of the LEAST effective ways to create jobs. Much more effective would be small business tax cuts, investment in state budgets and unemployment relief, which stimulates demand and business activity. On the contrary, the rich tend to save their money -- especially when the tax cut proposed is a PERSONAL income tax break. This is all documented, as well as being basic common sense.