This analysis grades the deal from the perspective of the president's agenda, which can be broadly defined as: - The wealthy paying a higher effective tax rate - Protecting Soc. Sec. and Medicare from steep cuts - Reducing defense spending - Lowering the budget deficit - Protecting the working class - Promoting clean energy Most of these principles are also supported by a large majority of Americans. 1. Income tax rates rising for households > $450,000 taxable income back to Clinton levels. The President gave a little on this by raising the threshold from $250K, but keep in mind > $250K now have more limited deductions, and ObamaCare raises their rate by 0.9%. Grade: A- 2. Investment taxes rising for households > $450,000, from 15% to 20%. ObamaCare also adds 3.8% for > $250K. The combined rate for > $450K is close to 24% now, in between the rate in 1998 and prior to the 1997 tax reform act. Low rates are preserved for < $250K. Still, the Mitt Romneys and Warren Buffets will still pay a relatively low effective tax rate compared to the average middle class American (who pay a higher rate on most state taxes and payroll taxes), but this move significantly lowers the gap. Grade: B+ 3. Estate taxes rising. The Bush tax cuts had the estate tax being eliminated entirely, but they are back now, but with higher deductions ($5 million) and a slightly lower rate. This, along with #1 and #2, will bring about a trillion in new revenues over 10 years. This is far from eliminating the annual deficit but it also protects the working class and brings back some much-needed revenues lost from the reckless borrow-and-spend years. Grade: B+ 4. Soc. Sec. and Medicare unaffected. Big win for Democrats Grade: A 5. No defense cuts. Win for Republicans. Opportunity lost for lowering the deficit. Grade: D 6. Renewable energy tax credits expanded. Big win for clean energy advocates. Grade: A 7. Unemployment benefits extended 27 months. Big win for the working class. Grade: A 8. Obama's payroll tax holiday is over. Since this wasn't meant to be permanent, this was expected, and it was just a question of when. Still, it removes a stimulus for the economy, hits the working class, but also brings back revenues. Calling this success/failure for the President's agenda is highly subjective. Grade: C Overall: Winning re-election gave President Obama much greater leverage over Republicans and he capitalized. The rich will finally pay back some of the loan Bush and Republicans had been giving them for more than a decade. The wealthy elitist crowd lost in a big way. Some crow is reserved for the far left thinking there is no difference between Obama and Romney. A Romney win would have ensured that either the working class would pay much more (full expiration of all tax cuts) or the rich would not pay a dime more, or both. Overall Grade: B+
