Obama tries to trap Romney with tax talk

"I've never known of a Swiss bank account to build an American bridge, a Swiss bank account to create American jobs, or Swiss bank accounts to rebuild the levees to protect the people of New Orleans. That's not an economic strategy for moving our country forward."

-- Gov Martin O'Malley, D-Md., on "This Week."

Can President Obama get re-elected by running on a tax increase in the midst of a faltering economy?

He and his fellow Democrats believe he can because they have been selling a tax hike on individual incomes above $200,000 for years as a way to make "millionaires and billionaires" pay "their fair share."

And Republicans are soon to nominate quarter-billionaire Mitt Romney, who looks to Democrats like the personification of the very folks they have been railing against. After many months of accusing rich people in general and Romney in specific of abusing the working class, Obama believes he can make his call for higher taxes a selling point for a second term.

It's audacious, given the recent spate of bad economic news, but Obama is very much invested not only in his tax increase plan but a campaign strategy that would make rich Romney a villain to the American electorate.

Obama today will yet again make his case that taxes should go up for top earners. His argument for years has been that the money taken from these folks can be used to stimulate the economy through public works projects and enhanced government payrolls as well as to reduce the rate at which the government borrows money.

This doesn't matter in a practical sense because there is no major legislation that will pass Congress before the election. But Obama hopes to force Romney and Republicans to say that they will protect top earners even if it risks a penalty for the less fortunate, believing that this will reinforce Obama's argument that Romney is seeking the presidency in part to help wealthy people abuse workers.

The news hook for Obama's repeating of his call for higher taxes is the lame-duck disaster that awaits Congress on the other side of the election. The largest part of the disaster is the expiry of current tax rates for all Americans and a reversion to higher, Clinton-era rates.

When Republicans controlled Washington in the last decade, they lowered tax rates across the board, but, fearing unkind scores from the Congressional Budget Office and Democratic talking points about deficit spending, made the cuts temporary.

The Republican surmise -- that Democrats would not be able to muster support for having rates go up - has so far proven correct. Despite strong resistance of the blue team and his own crusade for higher taxes, Obama has gone along with two one-year extensions.

Part of Obama's problem has been the large number of small businesses taxed under the personal income tax code. Obama rails against corporate jets and oil executives, but Republicans counter with mom-and-pop dry cleaners and hardware stores.

But because of the GOPs tactical maneuver on taxes last decade, Obama had the chance to kick the can into an election year in which he believes he can make the red team and their wealthy nominee look like bloodsuckers.

There has been lots of bipartisan hand wringing over the year-end "fiscal cliff." It's not just taxes, but also a looming debt-limit breach, the expiry of the stopgap law that allows the spending to keep the government operating, automatic military cuts that were included in the last debt-limit deal and more.

Good-government moderates warn of the coming fiscal crisis and ask why a common sense solution can't be reached right now - that politicians would set aside their ideologies and focus on common-sense compromise. That stuff always sounds good on the Sunday shows, but has no basis in reality.

We have the most conservative House in 80 years and the most liberal president since Lyndon Johnson. Even for a political system built on conflict, we've got a real doozy on our hands. Voters, who have swung widely in the previous two elections, will have to break the impasse.

The lame duck looks to be about enacting very short-term extensions of the status quo while the new government gets put in place. The "fiscal cliff" is really less about looming disaster than an illustration of the stakes of the election. Whichever party has the upper hand come January will have a ready-made opportunity for large-scale change.

Everyone talks about certainty, but every investor, every business owner and every taxpayer understands this: there's no certainty to be had until the election is over.

But all of the fretting about this cliff gives Obama a chance to poke a sharp stick at Romney.

Obama's offer will be that in order to provide temporary certainty to middle-class families, their tax rates should be extended for one more year. What he wants in exchange is for the Republicans to assent to taxes permanently rising for top earners.

We might even get to hear some "hostage taker" language again, in which Democrats accuse Romney and the Republicans of allowing the working class to suffer rather than make rich people pay more taxes.

Republicans will counter that Obama is calling for a small business tax and Romney will be able to say that his economic plan includes an across-the-board tax cut.

But Obama sees another chance to reinforce his argument that Romney is cruel to non-rich people. Obama has been spending piles of money on very personal attacks saying that Romney is a tax cheat and a corporate raider with shady foreign dealings.

The negative ad onslaught against Romney has so far not seemed to work. The race remains tied and Romney's favorability ratings have continued to creep up. Team Obama can argue that Romney would be better off if it weren't for the character attacks, but clearly the hopes for an early knockout did not materialize.

Obama, though, hopes that by defining Romney as a tax-evading vampire now, the Republican will fall short of the credibility test this fall.

The reason President Obama is piping up with this un-passable, one-year, partial extension of the current tax rate is that he knows reporters will swarm to the story and put Romney on the spot. Just like Obama's executive order providing a temporary, conditional amnesty to certain illegal immigrants, the hope is to sic the press corps on the Republican nominee.
The "fiscal cliff" story sets hearts pounding among process-oriented Washington reporters and the political press corps is very much consumed with Romney's riches right now.

Romney can say that he favors lower taxes for all and that a permanent tax increase for some is a poor trade for a temporary extension for others. But reporters, pretending that a permanent solution is feasible right now, will frame the story in terms of Romney refusing middle-class certainty in the name of protecting the wealthy.

The kind of headline Obama is imagining: "Romney balks at middle-class tax cut extension." And he knows he's likely to get it, too.

Chris Stirewalt is digital politics editor for Fox News, and his POWER PLAY column appears Monday-Friday on FoxNews.com.