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Tax Hike? Some Say Now's The Time To Pounce

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Tax Hike? Some Say Now's The Time To Pounce


Tax Hike? Some Say Now's The Time To Pounce

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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This is MORNING EDITION from NPR News. I'm Linda Wertheimer.


And I'm Steve Inskeep. Good morning.

The Obama administration did some backpedaling on taxes this week. Just one day after top economic advisors suggested a tax hike might be possible, White House spokesman Robert Gibbs rejected that idea. But there are some signs that Americans are less concerned about taxes than they've been in decades. NPR's Scott Horsley reports.

SCOTT HORSLEY: Treasury Secretary Timothy Geithner didn't exactly threaten to raise taxes on the middle-class, but he didn't exactly rule it out either when pressed this week by ABC's George Stephanopoulos.

(Soundbite of TV show, "This Week")

Mr. GEORGE STEPHANOPOULOS (Host, "This Week"): The president has said that taxes won't go up for any Americans earning under $250,000. But it doesn't appear he's going to be able to keep that promise if you're going to bring the deficits down.

Secretary TIMOTHY GEITHNER (Department of Treasury): George, again, we can't make those judgments yet about exactly what it's going to take and how we're going to get there. But we do not have a choice as a country. If we want an economy that's going to grow in the future, we have to bring those deficits down.

HORSLEY: White House economic advisor Larry Summers was equally cautious, telling CBS, in effect, never say never. But no sooner had Geithner opened the door to a middle-class tax hike than White House spokesman Robert Gibbs stepped forward to slam it shut.

Mr. ROBERT GIBBS (Spokesman, White House): I am reiterating the president's clear commitment in the clearest terms possible: that he's not raising taxes on those that make less than $250,000 a year.

HORSLEY: Gibbs was emphatic. He left no wiggle room. It was almost as if he'd said�

President GEORGE H. W. BUSH: Read my lips.

(Soundbite of cheering)

No new taxes.

Mr. GROVER NORQUIST (President, Americans for Tax Reform): George Herbert Walker Bush was thrown out of office because he said he wouldn't raise taxes and he did.

HORSLEY: Conservative activist Grover Norquist has built a career out of getting politicians to swear a blood oath against higher taxes and trying to draw blood whenever they backslide. For Norquist, who heads a group called Americans for Tax Reform, there is no cause - not war, nor hurricane, nor yawning budget deficits - that could justify asking the American people to pay more.

Mr. NORQUIST: No, there's not. Politicians have a hundred and one reasons to raise taxes. If you want to spend more on X, you can spend less on Y. There's no shortage of cash.

HORSLEY: For years, that opposition to higher taxes � at least on the middle class � has defined the playing field for American politicians. The Gallup Organization has been asking people since the mid-1950s if they think their own taxes are too high, too low or about right. Gallup's Frank Newport says almost no one ever volunteers that their taxes are too low.

Mr. FRANK NEWPORT (Gallup Organization): Yeah, I don't think anybody is desperate to pay more taxes, except maybe a few very rich people. I guess Barack Obama always says, well, I make a lot of money and I'm willing to pay more taxes. So maybe he would be willing to do it. But most Americans aren't.

HORSLEY: But Newport does note something unusual this year: Less than half the people surveyed � 46 percent � complained their taxes are too high. That's the smallest fraction since 1961. And for only the second time in decades, a slightly larger group of people actually thought their taxes were about right.

Mr. NEWPORT: So Americans, relatively speaking, are more satisfied with the amount of taxes they pay than they have been at most other times in history. Some people might say now's the time to pounce.

HORSLEY: But the Obama administration seems unwilling to test that. Bill Gale, who directs the Tax Policy Center at the Brookings Institution calls that unfortunate. Sooner or later, he says, the government is going to have to raise taxes on the middle-class to get its fiscal house in order. And, he says, politicians should be making that case, not ducking it.

Mr. BILL GALE (Co-director, Tax Policy Center, Brookings Institution): Saying that you're never going to raise taxes on people with income below $250,000 is definitely leadership, but it's leadership in the wrong direction. It's telling people what they want to hear, rather than what they need to hear.

HORSLEY: Gale suspects people are more willing to pay taxes during periods when the government is seen as playing an important role. During World War II, tax rates for the wealthy soared as high as 94 percent. But poor and middle-class families also paid taxes at rates substantially higher than today's. Despite those high taxes, the vast majority of Americans surveyed by Gallup, back then, said the taxes they paid were fair.

Scott Horsley, NPR News, Washington.

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