Tuesday, November 27, 2012

Capitulation or Confused?

"The president will travel to Montgomery County, Pennsylvania, to continue making the public case for action by visiting a business that depends on middle class consumers during the holiday season, and could be impacted if taxes go up on 98 percent of Americans at the end of the year,"


Presumably the case here is Congress should pass Tax Cuts else small businesses are going to get impacted. GOP would say, 'Sure Mr. President, why not extend Bush Tax Cuts for all Americans then? Passing Tax Cuts for 100% is better than for 98%, isn't it Mr. President? After all these Small Businesses would get additional 2% customers and that too rich ones. What is wrong in that?'

Where is the other half of the argument that doing Tax Cuts for 100% Americans is 'irresponsible' as it includes top 2% earners too?

Or is President Obama basically signalling to Senator Patty Murray and her Democratic Caucus that letting Bush Tax Cuts 'expire' is in no case acceptable to him? In other words, 'capitulation to GOP threat of vandalizing Economy' is back!

President Obama is still missing few critical things here - first and most importantly, how to communicate with Americans like Bill Clinton did in the Democratic Convention and how to avoid 'confusion'. In this case, the real case President has to do is to 'highlight' 98% of Small Businesses WILL NOT see any change in their personal tax liability because of increasing tax rates on above $250K annual income. Small Businesses getting impacted 'due to reduced sales in absence of no middle class Tax Cuts' is a coarse case since it keeps the GOP argument of Tax Cuts for all 'intact'. Agreed, such nuances are difficult and the 'message' essentially becomes 'coarse' in all this. But that is the challenge President Obama has to address in any case. 

This also implies President Obama is not ready to follow the bold script created by Senator Patty Murray - that let Bush Tax Cuts expire for all rather than accept a 'faulty deal'. As rightly pointed by the Senator, Congress will get an opportunity to pass Tax Cuts for 98% of Americans next year; what will be wrong is to squander that opportunity, subject Democrats to ideological insistence of GOP and in that process inflict permanent damage to America's Fiscal balance. President Obama has a great opportunity to help America 'get rid off' failed GOP theology of 'Tax Cuts for Rich' and seems like he may miss that.

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