Although they claim to represent and champion “the common man,” Democrats today are more the party of the rich than Republicans. Not only did Obama’s electoral victory include winning 52% of the $200,000-a-year income class of voters - 6% of the American public - but today Democratic Congressperson represent 14 of the 25 richest districts.
And there’s the rub. When Democrats used to talk about rising taxes on the rich to pay for entitlement spending, they were talking about taxing the Republican “other” not there own. Bill Clinton won only 38% of the +$100,000 income class, while Obama won 49% of those voters.
So when Democrats today talk about rising taxes, they are increasingly talking about placing the burden on their own class of voters. And while those wealthy Democrats are happy to sign on to liberal social policies and, say, environmental regulation; they are not keen on passing higher taxes on themselves.
And they have the ability to stop Obama’s ambitious domestic agenda if it means higher taxes for the wealthy. President Obama has outsourced his health-care agenda to liberal Democratic committee chairmen whom relish the art of class warfare.
The White House and liberal Congressional Democrats intend to pay for a public-health care option, which will cost at least a $1 trillion; by adding a 1% tax increase on household earning between $350,000 to $500,000 and gradually increasing to 5.4% on those making +$1 million.
When one further factors in the proposed 2-4% payroll tax on incomes +$250,000 to help stabilize Social Security [public pensions plan] which is projected to go bankrupt in decades time.
All together, Obama intends to raise the top marginal tax rate to 47% - the highest since 1986 after President Reagan’s tax reform. Add to that state taxes and the United States will have a marginal tax rate higher than but three European nations. Yes, France will be more tax friendly than the United States!
Needless to say, wealthy Democrats are not happy about this. They understand not only is it unfair to so disproportionately tax the rich but that such taxes are counterproductive to economic growth and will undermine recovery from the still-present recession. And it is not they who will pay more in taxes, but their constituents who will vote in 2010.
As Democratic Rep. Gerald Connolly, who represents a Norther Virginia suburb of Washington which is also the wealthiest district in the country; recently stated about the 14% of his constituents whom earn at least $200,000: “They all vote.”
With the economy still in recession, Democrats facing reelection in 2010 know the consequences of running against an opponent whom labels them a “tax-and-spend liberal.”
That is why some of them are voting against the Obama agenda. In a Friday committee vote on the aforementioned health care reform, two Democrats representing wealthy district joined Republicans in voting NO. The bill cleared committee anyway because of the Democrats strong majority, but in a full House vote the combination of Democrats representing wealthy districts, Blue Dog fiscally conservative Democrats and Republicans may make a formidable No team.
The White House knows this and that is why they are meeting with Democrats to assuage their concerns. But even given the meeting and a letter declaring “Especially in a recession, we need to make sure not to kill the goose that will lay the golden eggs of our recovery,” the White House is unlikely to forgo the tax increases.
So a compromise between the new class of rich Democrats and old-establishment liberals may be hard to come by. And thus the Obama agenda may have found its Achilles’ Heel: the wealthy class of liberals.
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