Fiscal cliff: Democrats flip-flop on tax hikes for millionaires

Amid fiscal cliff talks, Democrats have flip-flopped on raising taxes on the wealthy, signaling cliff diving may not be far off. Photo: Associated Press

PHOENIX, December 18, 2012 ― It might not be time to go cliff diving just yet, as House Speaker John Boehner has introduced a “Plan B” to the fiscal cliff negotiation table. Boehner has caved, offering a tax hike on Americans making more than $1 million along with raising the capital gains and top dividends taxes to 20 percent from 15 percent. 

No, “Plan B” doesn’t include any spending cuts or entitlement reforms, as Boehner has taken the Democrat’s approach of waiting until next year to tackle spending. It isn’t likely he’ll get it; just look at past administrations that took the same route. Reagan never got real spending cuts in the early 80s, something he later regretted. 

Democrats in the Senate have already rejected Boehner’s offer, claiming that $1 million is too high of a threshold in taxing the rich. Democrats still want the tax cuts to expire for those making over $250 thousand per year, Boehner hasn’t caved on this. Yet. However, the White House proposed a counteroffer to see tax rates rise only for people earning more than $400 thousand per year, with revenues at $1.2 trillion from $1.6 trillion. 

So why isn’t this bill good enough for the Democrats? 

Their party was championing themselves as “warriors” of the middle-class, demanding that millionaires and billionaires pay their “fair share.”  It was only until President Obama’s re-election campaign that Democrats began pushing for tax cuts to expire for those making over $250 thousand per year.  

Boehner’s “Plan B” is reminiscent of the bill Democrats proposed two years ago that was quickly dubbed the “millionaire’s tax.” Democrats openly admitted that this bill was put forward largely in part to put Republicans on the defensive over tax policy. Raising taxes on the rich has largely been popular among a majority of Americans recently, putting Republicans in a corner. 

According to House Minority Whip Steny Hoyer, the Democratic compromise with Republicans then was just a “ploy.” They were willing to float a tax increase only for those making over $1 million confident that Republicans would reject it. Democratic Senators Chuck Schumer, Claire McCaskill, and Bill Nelson all indicated in 2010 that leaving the tax rate the same for those in the $250,000 bracket was acceptable, as long as taxes for the ‘millionaires and billionaires’ increased.  

“Well, I think there is a compromise in the making. Democrats had originally called for tax cuts for the people below 250,000 (dollars), Republicans for everybody. What if we moved it up to a million dollars?” New York Democrat senator Chuck Schumer said on Face the Nation in November 2010. 

When the “millionaire’s tax” bill was defeated, Democrats started the campaign-theme that Republicans were holding the economy ‘hostage’ and the middle-class would suffer. 

So why did the Democrats move from their originally proposed $1 million to $250,00? Pressure from the far-left wing of the Democratic Party. Obama won reelection and he had to deliver to his base. The original $1 million figure was, as Hoyer admitted, simply a political ploy. 

It’s unfortunate that Boehner won’t look at past tax reform bills when entering the negotiation room, such as the Tax Reform Act of 1986. This law that was ushered in by conservative President Ronald Reagan and was a major simplification of the tax code, with vast reductions to deductions and the number of tax brackets. 

Boehner has given so much on taxation, getting nothing in return on spending cuts. It was a mistake to cave on tax rates and now he cannot walk it back. There are even rumblings that Boehner may have a hard time winning reelection as House speaker in January over his fiscal cliff tactics. That remains to be seen. 

Yesterday a fiscal cliff deal seemed to have momentum behind it, though today we’re back to square one with just 13 days to go. 

Henry D’Andrea is a Conservative opinion columnist at the Communities @ the Washington Times. Feel free to email Mr. D’Andrea at and follow him on Twitter (@TheHenry)

This article is the copyrighted property of the writer and Communities @ Written permission must be obtained before reprint in online or print media. REPRINTING TWTC CONTENT WITHOUT PERMISSION AND/OR PAYMENT IS THEFT AND PUNISHABLE BY LAW.

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Henry D'Andrea

Henry D'Andrea is a Conservative columnist and commentator. He writes a weekly column at the Washington Times Communities called "The Conscience of a Conservative," which features his commentary on current events and political stories from a conservative perspective. He often writes on foreign policy, domestic and economic issues, the conservative movement, and elections.


D’Andrea has been a guest on many radio shows throughout the country since writing columns at the Washington Times Communities. His work has been featured in many publications, including, Commentary Magazine, The Wall Street Journal, The Tea Party Review Magazine, Big Government, Big Journalism, The Gateway Pundit, Instapundit, and many more.


Feel free to contact Henry D'Andrea at and follow him on Twitter: @TheHenry 


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