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The Wizard of Ob

Voodoo With a Human Face
Barack Obama, Inegalitarian

Forget the tanking Dow. If the country had a stock market for prejudice — say, the Chicago Sham Exchange — it’d be soaring right now, with shares in Barack Obama as a flag-burning, fist-jabbing, insurgent-loving, Osama-admiring Islamist terrorist outperforming anything jacked up on oil. But it wouldn’t tell us anything about where Obama stands on taxes, the budget deficit, the recession and a few other un-sexy uncertainties deciding our immediate future.

I admit, those things don’t matter nearly as much as the inventions about Obama’s past lives. If we’re to be true to our recent habits, lies and the liars that tell them are all the electoral college we need to decide the outcome on Nov. 4. But last week I wrote about John McCain’s more-than-less voodoo solutions to these economic afterthoughts (cut personal and corporate taxes, buy off the middle class with expanded tax credits, drill for oil and happy talk and pretend the deficit doesn’t exist). It’s only fair to apply the same analysis to Obama’s proposals.

 

The result isn’t significantly better. The Obama economic plan does its share of pandering, denying and pretending. You expect it to a degree. You don’t get elected without pandering, especially when you’re dealing with the most breaded and circussed electorate in the history of the planet. But I’m hoping for a little more daring from the self-styled agent of change. The fiscal wreckage of the last eight years needs fixing. Obama’s plan won’t do it. It’s not a continuation of the Bush years. That’s mostly McCain’s department. But it’s more Ronald Reagan than Bill Clinton. That won’t slow the kind of rising economic inequalities that are doing more to pull the country apart than any ideological divide. Nor will it balance the books so the country can regain something more critical than energy independence: its fiscal independence, which is being frittered away to Chinese and European banks and to Arab investment funds.

Take the Bush tax cuts of 2001 and 2003, which lowered income tax rates across the board and lowered to 15 percent the tax on capital gains and dividends. The cuts returned the rich to the Gatsby tax rate they enjoyed in the 1920s, led to record-breaking deficits and helped swell the national debt by 50 percent (to almost $10 trillion when he leaves office). Obama says he’d repeal some of the income tax cuts, but only for people making $250,000 and more. Weird cut-off. Only 2 percent of households make more than that. More disturbingly, Obama’s plan speaks of how he views wealth. It implies that those making $90,000 to $250,000, even though they’re in the top 20 percent of households, are somehow middle class. They’re not. And they’ve been getting richer fastest since 1980 because of the skewing of the tax code in their favor.

Under Clinton, the 28 percent tax bracket ended at $91,000. Today it ends at double that amount — $182,000. Obama won’t change that. Under Clinton, those making between $91,000 and $288,000 were taxed at rates between 31 and 36 percent, and those making more than $288,000 at 39.6 percent. If that was “soaking” the rich, then the tax code did wonders: The economy grew and added jobs at a historic pace, eliminated the deficit, reduced poverty, and began lifting the real incomes of middle class and poorer Americans, which had stagnated since the Reagan years. Obama’s plan doesn’t go anywhere near that, though it would erase capital gains taxes back up to 25 percent, from 15, and it increases slightly the benefits of the Earned Income Tax Credit, the best anti-poverty program currently on the books.

Then there’s this howler. Obama would eliminate taxes for seniors making $50,000 or less. Why? With Medicare, the elderly have some of the best and cheapest health care available. They’re mostly retired, so they’re insulated from commuting’s costs. If they’re not, they generally have no kids to worry about. No child care expenses. No college fund to feed. In Florida, where a lot of those elderly voters Obama is pandering to live, their homestead exemption and cap on valuations keeps a lid on their property tax increases. And for now they’re still benefiting from a relatively healthy Social Security system — the system that needs their taxes to keep going for the next generation, assuming they’re still earning a paycheck (as many are). Do they really need a tax perk more than, say, the single mother earning $45,000, commuting to work every day, paying thousands of dollars in health insurance and juggling other saddles of parenting? Doubtful.

Should he get elected, Obama will likely have a large majority of Democrats in Congress to work with (something Clinton never had but still managed to discipline his way in fiscal matters). How disappointing it would be if Obama squanders the opportunity not only to repair the economic Katrina of the Bush years, but to restore the principles of egalitarianism as fair opportunities for all that the Reagan-Bush years have done so much to demolish.

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