The Blog

Let's Cap the Tax Cut at $253,571.33

President Obama's latest tax cut announcement is more bad messaging. When you throw out an arbitrary number as your cap for tax cuts, you immediately get off message and into the weeds. Why? Because your number rapidly becomes contested.
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Last year at this time, as the president was singing the praises of the "grand bargain," negotiating with Republican leaders a plan that, come January, will impose Herbert Hoover's economics on an economy that already can't create enough jobs to keep up with the number of kids graduating from high school or college, let alone their out-of-work parents. But since then, President Obama has taken a sharp turn in his rhetoric. It began with a jobs speech last Labor Day, and once he and his advisors saw the dynamism of the Occupy movement, they eventually decided to embrace it.

Barack Obama isn't a natural populist, but he's working hard at it. Most of his moves are symbolic and rhetorical, but at least he's looking leftward every once in a while. And the Republicans have, in fact, done something unprecedented in modern American history: They have deliberately refused to act on anything that could improve the economy so they could attack the president and the Democrats for an anemic economy. Personally, I wish he'd look rightward for his talking points on that, and use the language of patriotism, which the left gave the right during the Vietnam War like a "steal your Christmas" present, because that's treason. But at least the president is saying most of the right things and occasionally even taking baby steps toward actions that can help with his election chances. In the last few weeks, as his margin of victory over the hapless Mitt Romney has evaporated, he's evolved into a progressive on marriage equality and taken a hiatus from deporting 400,000 people a year to give some of their sons and daughters a temporary reprieve to go to college or join the military (but he just couldn't get himself to make it a very long reprieve).

Yesterday the president made an effort to draw a stronger distinction between himself and his Republican opponents on taxes, by proposing a one-year extension of the Bush tax cuts for families making less than $250,000 a year. The proposal, of course, is pure symbolism; the Republicans will never "agree where we agree," as Obama nicely put it, on a partial extension of the tax cuts if they leave out the richest Americans, because that wouldn't benefit the "job creators" (i.e., those who create jobs for Republican legislators and their staffs).

But the symbolism and especially the rhetoric on the middle class were right on target:

Many members of the other party believe that prosperity comes from the top down, so that if we spend trillions more on tax cuts for the wealthiest Americans, that that will somehow unleash jobs and economic growth.

I disagree. I think they're wrong. I believe our prosperity has always come from an economy that's built on a strong and growing middle class -- one that can afford to buy the products that our businesses sell; a middle class that can own homes, and send their kids to college, and save enough to retire on.

Well, almost.

The president and his campaign continue to make unforced errors because they don't have, and never have had since he entered the White House, either an overarching vision that would guide the way they communicate with the American people about the economy or anything else or a competent messaging team that could compensate for their over-reliance on polling where their vision should be.

Yesterday's press conference, which included some tremendous language and an equally strong delivery by the President, is a case in point. Let me give two examples of what I mean.

First, the decision to choose $250,000 is bad policy, bad politics, and bad messaging.

It's bad policy because the main beneficiaries of the "winner take all" economy of the last 30 years have actually not been the upper 2 percent (although those with incomes hovering around $250,000 have certainly done a lot better than those with the 1980 equivalent of incomes of $50,000, who now earn $45,000 (a steep 10% decline -- nowhere near their 50-plus percent decline in wealth and savings). In contrast to the 98th percentile, the upper 1 percent have done quite well -- although the real winners are the top .1 and .01 percent, who have taken virtually every dime of extra income over the last decade and then some.

It's bad politics because most of the people in this country who earn $250,000 live in suburbs or exurbs. These are not only desperately-needed Democratic voters, but they see themselves as middle class, not rich, and they share many of the economic insecurities of the rest of the country, with job loss, home foreclosures, and underwater mortgages constant sources of stress. Most earn $250,000 because they worked hard for it, not inherited it.

A defining feature of the Great Recession, unlike prior recessions, is that its tentacles have reached into the upper middle class, to precisely these Americans. If you live in Dothan, Alabama and earn $250,000, you're rich. New York City? Los Angeles? Chicago? Atlanta? After you knock the first $80,000 off for taxes, pay for someone to take care of your kids if you both work, and pay for private schools if you don't live in the right part of town, you're down to about $120,000. Now pay your mortgage and your property taxes.

You get my point. I'd sure rather be in the 98th percentile than the lower 97 below it, but outside of Dothan, you might be comfortable enough, but you you're probably not building an elevator for your "a couple of Cadillacs," as Mitt "common touch" Romney would put it.

And that leads to why it's bad messaging.

When you throw out an arbitrary number as your cap for tax cuts (or virtually anything else), you immediately get off message and into the weeds. Why? Because your number rapidly becomes contested (as I just showed by example). What's the cut-off for rich? Should we index it by place of city? State?

The other problem with specific numbers is that they take people into their heads and away from their guts, which they respond to appeals to values like fairness. You don't want them engaged in internal debate about the validity of your numbers. It's like talking with voters about climate change by citing sea water levels in fractions of an inch, which doesn't pass the layperson's "who cares" test, even though it's perfectly legitimate to a climate scientist.

The White House had two easy ways around this. One was to talk in units of millions. Personally, I wouldn't have gone down to a quarter of a million for all the reasons I just described. But if I felt some compulsion to do so (likely because my pollster asked the question that way and didn't think to ask it a different way), I would have called it a quarter of a million. That smacks of opulence.

Better yet, a half a million. Who can contest that if you make a half a million a year you can't afford to pay fifteen to twenty thousand more in taxes so somebody working three jobs to make one-tenth of what you earn can have health care? Selfish pig.

But better yet, stick with a million. Why? Because the difference in revenue is not all that large, but the difference in meaning is substantial. Everyone knows the term "millionaire," and now you can use it when you talk about it. In the midst of the 2010 elections, when Democrats were about to lose more than 50 seats in the House, Democrats threw 20 of those seats by refusing to run on a millionaires' tax. I can tell you that with some certainty because while Democrats were getting trounced, the following "talking point" won by 40 points over anything the other side could say with a representative national sample of 1000 registered voters: "In tough times like these, millionaires ought to be giving to charity, not getting it." Try arguing with that.

The second point is as basic as the first if you understand the basics of messaging.

Extending middle class tax cuts by a year is the kind of "bold" move that has defined the Obama presidency. Economists can't say much with certainty, but they do say with a decent degree of it that the middle class isn't going to be out of the woods in the next year. Or two. Or three. So why throw people who have been treated like dogs what feels like a bone?

Worried about the deficit? That's why God created the possibility of 75% tax rates on the highest earners (15% less than during the Eisenhower years -- last I looked, a Republican administration). You can milk 98 percent of the people of their incomes and savings after a year, in misbegotten efforts to bring down the deficit created because so many of those middle and working class people got laid off because of the greed of the .01%, or you can create tax brackets that break at half a million, a million, 5 million, 10 million, and above 10 million, and have a tax code that is fair, progressive, and wildly popular. And impose a 75% tax on incomes above, say, 10 million, and CEOs might decide that, instead of giving themselves that extra 15 million dollar bonus, they'll keep their 5 million dollar salary and just 5 million of that bonus (because now they're only going to get 25% of it) and give $2000 each to each of their 5000 employees, who helped earn them that bonus and won't be taxed at 75 percent.

Maybe this stuff is obvious. Maybe it isn't. But if the president doesn't have a vision for where he wants to lead the country -- not just during election season but for however many years he dreamed about becoming president - the least he can do is to hire a messaging team, because if he has one, and this is the best they can do, they shouldn't be there by close of business today if he believes his own rhetoric of accountability.

Drew Westen, Ph.D., is Professor of Psychology and Psychiatry at Emory University; the founder of Westen Strategies, a strategic messaging firm; and author of The Political Brain: The Role of Emotion in Deciding the Fate of the Nation.