I have been waiting 4 years for Barack Obama to raise my taxes. He has twice beaten 'no new taxes' Republicans, with a campaign theme of raising taxes on those making over $250k. My wife and I are both professionals, and we fall into that category. We still supported Obama, and even supported him in his idea that our taxes needed to go up. In a way I felt a party to both the Us (those wanting to raise taxes) and Them (those whose taxes would be raised.) I was not alone. In 2008, exit polls showed that those making over $200k preferred Obama by 6 points. However, as the fiscal cliff debate went on, reports in the media bounced my family out of the Them, back into, and eventually out of Them.
I don't buy the class warfare argument of those who oppose tax increases on the highest earners. I viewed myself as a strong rejoinder: I was one whose taxes would increase and supported those increases vigorously. For the most part, I agree with what the federal government spends money on. Someone has to pay for it. I look at my family - immediate family, in-laws, extended family (17 aunts and uncles, 20 cousins), my wife's extended family - and I cannot reason how my household is not the one that should shoulder the increased burden first. I boiled it down to a simple question for my extended family: "whose taxes should go up, mine or yours?"
However, as the fiscal cliff debate went on, feeling my tax rate go up, stay the same, and pogo around for a few weeks, I felt a carving out of a small group whose taxes would go up and how there was becoming a clearer delineation of the two groups*. I had not before felt the sharp divide and thought that it could make for bad politics at some point.
The root cause of the problem was the artificially imposed Crisis Deadline. It was born out of the original sin of allowing the Bush tax cuts to be temporary, and the brinksmanship of the debt ceiling that gave us the sequester and fiscal cliff. We should not have rushed these measures through a lame-duck Congress.
There are a couple of ideas I start from on taxes: we have a large deficit, and those making the most have seen dramatic decreases in their net tax rates, along with dramatic increases in their incomes. This leads me directly to the ideas that we need more revenue, and the tax code needs to be more progressive. I'm not sure that the fiscal cliff bargain Obama struck was the best way he could do things**. I am sure that it is only a half-step to a better more progressive tax code. I fear Obama used up his leverage and this issue will not be revisited in a substantive way for a while.
*I understand that everyone's taxes are going up due to the payroll tax going back up to 6% for the employee, but no one in the media seemed to care about that tax, and fewer still see how that funds the fed's biggest program and how much low-to-middle income Americans pay into that system.
**To those who counter every criticism with 'what would you do', some of the things I would like to see are:
1. More tax brackets, the complexity of our tax code is completely unrelated to the number of brackets, and someone making > $1Mil is living much differently than someone making $250k.
2. Increase personal exemptions and standard deductions to increase the minimum income to trigger the first tax bracket.
3. Further raise capital gains taxes, and reduce methods used to rename income as capital gains to reduce taxes.