Previously, the elite corporate lobby group had steadfastly supported an extension of all the Bush tax cuts to everyone regardless of income. The change, however grudgingly taken, seems to indicate that White House's dual approach in the past month for getting its way on a modest tax increase on the rich is paying off:
The differing strategies—highly public meetings with corporate America and private arm-twisting with Wall Street—both appear to be aimed at winning popular support for higher taxes on the wealthy. The trade-offs being roundly fought over in Washington, like what government programs may be cut and which entitlements may be spared, are less important in this effort to muster highly compensated chieftains whose support for tax increases will provide cover for Congressional Republicans wary of being seen as too quick to compromise on higher tax rates.It's not exactly the crumbling of the plutocracy. For one thing, willingness on the part of a growing number of top bankers, hedge-fund managers and leaders in the non-financial end of American business seems predicated on their fears of how uncertainty will affect the economy if a compromise on the fiscal impasse isn't reached. So they're moving in their own interest. And their cooperation now, for what is, at worst, a return to Clinton-era tax rates for the richest Americans, could buy them support in the White House later for a big item on their agenda: lowering the corporate tax rate. So they're moving in their own interest.
What’s more, the political symbolism of some of the wealthiest Americans’ saying they support higher taxes on the rich takes a bit of the sting out of the idea of raising rates, for both Democrats and Republicans. Indeed, by appealing to both camps and enlisting their support, President Obama hopes to neutralize potential critics, according to allies of the president on Wall Street.
While some top executives, like Lloyd Blankfein of Goldman Sachs, have been talking tax increases for some time, The New York Times reporters Nelson D. Schwartz and Jonathan Weisman note that among the more than 100 CEOs who signed a letter to the president and Congress on resolving the impasse are conservatives such as Rex Tillerson of Exxon.
The letter stated in part:
Compromise will require Congress to agree on more revenue—whether by increasing rates, eliminating deductions, or some combination thereof—and the administration to agree to larger, meaningful structural and benefit entitlement reforms and spending reductions that are a fiscally responsible multiple of increased revenues.The problem with that formulation is that it entails a modest sacrifice on the part of the nation's oligarchs who can easily afford it without pain since the lion's share of economic gains of the past three decades have gone into their pockets. The sacrifices being sought at the lower ends of the wealth and income spectrum, on the other hand, are likely to cause serious harm to people already in pain who have been shouldering big sacrifices for those same decades. That ought to be remembered before breaking out the balloons and confetti.