Sunday, October 19, 2008

by Larry Elder

Democratic presidential contender Barack Obama promises to "cut taxes for 95 percent of American workers." That's not possible.
Why? More than 30 percent pay nothing in federal income taxes. Obama comes up with this number by calling tax credits "tax cuts." One can debate whether these things are good or bad, but they are not tax cuts. McCain offers refundable tax credits for health care, as well as other credits, but he doesn't insult the intelligence of the American people by calling them "tax cuts." When Obama's credits go to people who pay no federal income taxes or who pay less than the value of the credit, they are not "tax cuts." They are transfers of money from one pocket to another, or redistributions of wealth, but they are not tax cuts.
Republican candidate John McCain should tell people in real, human terms how hiking taxes on the so-called rich affects us all. My friend Nina is a self-employed interior decorator. She just met a prospective married client, whose husband works in the entertainment industry. The client may pull the job because of Obama's impending tax cuts. Nina makes well under $250,000, lives in an apartment, has no maid, and drives a midsize non-luxury car.
But the couple she hopes to get the job from face a tax rate of 39.5 percent plus increased Social Security taxes, on top of higher taxes for capital gains and dividends.
In promoting his tax cuts, President Kennedy said, "The soundest way to raise the revenues in the long run is to cut the (tax) rates now." When Kennedy says it, it's Camelot. When Reagan says it, it's trickledown. By the way, Kennedy cut taxes by 22 percent (reducing the top marginal rate from 90 percent to 70 percent), and Reagan by 60 percent (top marginal rate from 70 percent to 28 percent). The "unfair, pro-rich" Bush tax cuts that are set to expire? A reduction in the top marginal rate of approximately 7.5 percent. A recent headline in Agence France-Presse says it all: "Sweden Announces Income Tax Cuts to Boost Jobs."
On spending, Obama now says -- as with taxes -- he may defer some of it because of a poor economy. But didn't he consider the spending "investments" that are "fully paid for"? If they are investments that "don't cost" anything, why put them off because of a bad economy? If Obama's been telling the truth, the ideal time to spend and to raise taxes is precisely when things are bad, unless they a) are not paid for and b) are not investments that will "jump-start our economy."
McCain mistakenly put off-limits going after Obama for his 20-year relationship with his former pastor, Jeremiah Wright. But Obama's relationship with his "spiritual adviser" serves as a window into Obama's character. During the primary season, Obama even called this a "legitimate" issue, but insisted he knew nothing about many of Wright's radical views. Really?
In "Dreams from My Father," Obama talks of attending the "Audacity of Hope Sermon" (pages 292-293). There is an audio book in Obama's own voice reading this passage. Obama hears Wright speak of Hiroshima and Sharpeville as examples of acts of injustice. A personal aside: My dad, a former Marine, served as a cook in a segregated unit and was stationed on the island of Guam in anticipation of the invasion of Japan. The invasion never occurred because of Hiroshima and Nagasaki, which military historians believe saved at least 1 million lives.
What is Sharpeville? In 1960, the South African apartheid government shot down unarmed protestors, killing 69 black men, women and children. Most of the dead were shot in the back, and nearly 200 more were wounded.
Obama felt no sense of outrage to hear Hiroshima and Sharpeville mentioned in the same breath. Indeed, he was so inspired by the sermon that he uses the sermon's title -- "Audacity of Hope" -- for his second book, and as the theme of his campaign!
In "Dreams," Obama tells of how he met Wright. Obama made an appointment at Wright's church to meet the pastor. Wright was late. While waiting, Obama spoke with Wright's assistant, a single mom whose husband had just died. She told Obama that she intended to leave Chicago and move to the suburbs to escape the violence. She also wanted her son to attend a better school. Her son, she said, wanted to join a band, and his school didn't have one. His future school had a band and free uniforms (pages 280-284). "'He's always wanted to be in a band,' she said softly" (page 281). When Obama told Wright of his assistant's plans, Wright said he tried to talk her out of it. Why? Wright argued that the boy "won't have a clue about where, or who, he is"?! Obama joined the church.
Next week, more about Obama, including Bill Ayers, Iraq, ACORN and the financial crisis.

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