Labor Unions Push Obama’s ‘Tax the Rich’ Policy
Policy + Politics

Labor Unions Push Obama’s ‘Tax the Rich’ Policy

REUTERS/Kevin Lamarque

The presidential election may be over, but the campaigning over one of the definitive issues of the year – taxes – hasn’t stopped.

After an independent turnout effort that contributed to President Obama’s reelection last week, labor unions are pledging to help the White House honor the president’s promise to raise income tax rates on Americans making more than $250,000 a year.

Since the presidential ballots were cast and counted, the AFL-CIO has hosted more than 60 “Protect Our Future” rallies so far that are geared toward protecting entitlement programs from spending cuts and ensuring that the lower tax rates first enacted under George W. Bush expire for wealthier families. 

The lower rates expire at the start of next year and Obama has committed to keeping them at their current level for 98 percent of the country. Bumping up the rates, along with the expiration of other provisions, would generate an additional $900 billion in revenues over the next decade and trim the deficit. Republicans want the Bush-era rates extended across the board for at least a year, arguing that higher rates would harm the fragile economy.

Some of the AFL-CIO events were scheduled to shore up the Democratic base, while others were meant to put pressure on Republicans such as Sen. Rob Portman, R-Ohio, who represent a blue-collar populace.

Obama met privately on Tuesday with the heads of the AFL-CIO, the National Education Association, the Service Employees International Union and the American Federation of State, County and Municipal Employees, among other groups ideologically aligned with Democrats.

“If we asked the wealthiest Americans to pay a little bit more, we can continue to invest in areas of the economy that need investment and we don’t have to ask seniors or the parents of disabled children or the least fortunate among us to bear the burden of getting our fiscal house in order,” White House press secretary Jay Carney said in a press briefing after the meeting.

AFSCME president Lee Saunders described the unions as having a public role in the closed-door negotiations between Republican and Democratic lawmakers that begin Friday.

“We’re going to have our folks engaged, just like they were in the election – they’re going to be engaged in this campaign,” Saunders said, according to POLITICO. "We’re going to keep the pressure on.”

The Center on Budget and Policy Priorities, a progressive think tank whose head met with Obama, noted on its blog this week that continuing the lower tax rates offers minimal economic gains: a 0.1 percent increase in gross domestic product, based on Congressional Budget Office figures.

But without Republican congressional votes for Obama’s plan, all of the Bush-era rates would lapse and the country would face a total tax increase of more than $200 billion. The additional tax burden would send the country back into recession, according to the CBO.

Obama meets Wednesday with corporate CEOs from General Electric, Ford, Pepsi, Walmart, and American Express, among others. Many of the executives have also been involved with Obama’s jobs council and gave the administration proposals on tax reform and energy policy.

The Business Roundtable, a trade association representing CEOs, sent a letter to lawmakers this summer asking for the Bush-era rates to be extended for a year, so that there is time to negotiate a larger overhaul of the tax code.