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					                                                                1724 C onn ec ti cut Ave nue , N. W .
G ARIN H ART Y ANG                                                       Wa sh ing ton , DC 20 009
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                                                                            F ax: ( 20 2) 2 32- 813 4
RESEARCH GROUP

MEMORANDUM
TO:            Interested Parties
FROM:          Geoff Garin
DATE:          September 14, 2010
RE:            Making The Middle-Class Tax Cuts Permanent

President Obama has articulated an approach to the tax cut debate that offers a winning
political proposition for Democrats because it frames the issue in a common-sense way
that is squarely in sync with the electorate’s views and priorities.

Public opinion polling shows strong support across the electorate for making permanent
the middle-class tax cuts that otherwise would expire at the end of this year. Indeed,
voters would feel anger and indignation toward either party if it stood in the way of
continuing the middle-class tax cuts.

On the other hand, voters are much more divided over what to do about the tax cuts for
those in the very top income bracket. Many polls show that a majority of voters believe
that those tax cuts should be allowed to expire, albeit with significant minorities
supporting their continuation.

President Obama’s framing of the issue captures these two aspects of the tax debate
perfectly: Let’s move forward now with making the middle-class tax cuts permanent,
because that is something everyone can agree on, and then let’s have an honest debate
about whether extending the cut in the top income rate is the right priority for the money.
The president strikes a strongly responsive chord with the public when he says that
securing the middle-class tax cuts should not be held hostage to partisan wrangling about
what to do with earners in the top income rate.

Indeed, Congressman Boehner was reflecting simple political reality when he said that he
would support the president’s position on middle-class tax cuts if that’s the only
alternative. A decision by Republicans to block action on the middle-class tax cuts as a
tactic to get their way on the tax cuts for those at the very top would be a untenable
position for the GOP, especially given that voters already view it as a party that cares
more about the wealthy than it does about the needs and struggles of the middle class.

More than a few Democrats in Congress have suggested that cuts in the top tax rate
should be extended for a year or two, while most Republicans want to make cuts for
those at the top permanent. President Obama’s approach to the issue anticipates and
welcomes this discussion, with only one proviso – that it occurs on a separate track so
that it does not stand in the way of securing the middle-class tax cuts.
G ARIN H ART Y ANG RESEARCH GROUP
The debate over what to do about the Bush tax cuts for those with the highest incomes is
fundamentally a debate about priorities – whether we are better off devoting finite
resources to a larger tax cut for those at the very top (who in President Obama’s scenario
already would receive the benefit of the middle-class tax cuts), or to new tax incentives to
promote investment and hiring, or to reducing the federal budget deficit.

When framed in terms of priorities, extending the Bush tax cuts for those with the highest
incomes recedes in importance, relatively speaking. For example, in a recent national
survey, voters were asked for their reactions to four different policies on the tax issue –
two that anticipated the expiration of the tax cuts to the top income rate, and two that
anticipated its continuation. The approaches that proposed to let the cuts to the top rate
expire and instead devote the money to other purposes were more broadly appealing to
the voters than the approaches that extended or made permanent the Bush tax cuts for
those at the top.

                                 Proportion Favoring Each Position
                                                         All     Demo-     Inde-     Repub-
                                                        Voters    crats   pendents    licans
                                                         %         %         %          %
Pass a permanent middle-class tax cut, let the Bush
tax cuts for those with the highest incomes expire as
scheduled this year, and use the savings to pass new
tax incentives to promote investment and hiring by
businesses                                               65       78        60         55
Pass a permanent middle-class tax cut, let the Bush
tax cuts for those with the highest incomes expire as
scheduled this year, and use the savings to reduce
the federal budget deficit                               61       76        65         45
Extend all the Bush tax cuts for two more years,
including both the tax cuts for the middle class and
the tax cuts for those with the highest incomes          53       33        52         76
Pass a permanent middle-class tax cut, and extend
the Bush tax cuts for those with the highest incomes
for two more years                                       51       32        52         70

On this issue, independents’ priorities are far more in sync with those of Democrats than
they are with Republicans’ priorities.

Whatever disagreements there might be about the top income rate, Americans want the
middle-class tax cuts made permanent. President Obama’s argument that we should get
that job done now is politically and substantively compelling, and it gives Democrats a
chance to play offense rather than defense. As John Boehner apparently has recognized,
holding the middle-class tax cuts hostage to tax cuts for those at the top is a position the
Republicans simply cannot sustain for long.




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posted:9/15/2010
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