Brinksmanship – noun, the technique or practice of maneuvering a dangerous situation to the limits of tolerance or safety in order to secure the greatest advantage, esp. by creating diplomatic crises.
I think it may be useful to look at what Republican Senators are doing this week in terms of table stakes poker. “We aren’t doing a damn thing until Obama and the Democrats fold on extending the Bush tax cuts.”
Obama is probably going to fold facing the “all in” bet. But should he?
The key word here is extension. If there isn’t a bill passed to extend the current tax rates, the old tax rates kick in as the 2001 statute had a sunset date, December 31, 2010. Then the millionaires and billionaires and crotchety old Mr. Smith down the street go back to paying more taxes. According to Yahoo News “[t]he current six rate brackets of 10%, 15%, 25%, 28%, 33% and 35% will be replaced by five new brackets with the higher rates of 15%, 28%, 31%, 36% and 39.6%.” (For more on the changes read the Yahoo article here)
There are a lot of people that don’t pay any federal income tax; and, guess what, most of them are the poor and working poor. Taxfoundation.org. So, changing the brackets won’t have any effect on them.
Who’ll get hit? Middle and upper middle class people, you know the people making a pretty good living, making say $100,000 to $250,000 a year (the ones that Obama and the Dems want to shield).
A lot of them identify with the Tea Party, Kiwanis, the Chamber of Commerce and so on. It wouldn’t surprise me if most of them voted for Republicans last month.
These are the people that watch Fox News, listen to Limbaugh and subscribe to Palin’s Twitter feed. Down with taxes, we’re the Tea Party! If their tax burden ox is gored, will they turn on their ultra-rich brethren on Wall Street and in the corporate offices of the drug companies and banks? Might there be a softening of GOP militancy?
The Republican attempt to shut down the government didn’t work back in the 90’s. If Obama develops some balls, it just may not work this month.