Oh no....say it ain't so. America, a nation of 'socialists'? What has happened to my country tis of thee?
WSJ:Republican Party No Longer Owns the Tax Issue
Democrats Say Americans Now More Willing to Accept Higher Rates; GOP Attributes Apparent Shift in Attitude to Marketing
OCTOBER 29, 2008
online.wsj.com
Republicans are losing ground in the battle over taxes -- turf they have dominated since the Reagan administration -- even against a Democratic presidential candidate who is promising substantial tax increases.
Sen. John McCain has made tax policy the centerpiece of his homestretch pitch to voters: The Arizona Republican unveiled an ad Tuesday accusing Sen. Barack Obama of pitching "higher taxes" and planning to "spread your income," then hammered his Democratic rival's economic plan in Pennsylvania.
Yet the latest Wall Street Journal/NBC News poll, conducted in mid-October, showed voters preferred Sen. Obama to Sen. McCain on taxes by 14 percentage points. After Labor Day, Sen. McCain had a one-point edge on that issue.
"It's a stunning reversal of fortune on a core Republican strength," says Republican pollster Neil Newhouse, who helps conduct the poll.
Democrats say Americans have become more willing to accept higher taxes -- at least on the wealthy. Republicans attribute the shift to marketing, claiming that Sen. Obama has skillfully hidden some tax increases while embracing Republican-style tax-cutting rhetoric.
Either way, an Obama victory in Tuesday's presidential election would mark a turning point in modern-day tax politics. Since Ronald Reagan campaigned on tax cuts in 1980, and Democrat Walter Mondale disastrously ran on their reversal four years later, White House candidates embracing income-tax increases have fared poorly.
Obama supporters say his winning tax message confirms underlying shifts in American attitudes, that eight years of falling median incomes and stagnant wages may have blunted Sen. McCain's tax appeal to the aspiring rich. The financial crisis -- fueled by reports of Wall Street excess -- has stoked populist sentiments against the upper class. And voters may believe it is time to pay the bill for an era of big deficits.
"I know historically Democrats raise taxes, and if that's what we need to do to get us through all this turmoil, we have to do it," Denise Sobel, a 43-year-old registered Republican, said at an Obama rally in Leesburg, Va. She said she voted for President George W. Bush twice and plans to vote for Sen. Obama.
Mike Luckey, a 41-year-old Wal-Mart merchandiser from Newport News, Va., attended an Obama rally earlier that day in Richmond. He said he doesn't believe Sen. Obama's promise to cut his taxes. "I think it's a little presumptuous of any American to think after an $800 billion bailout of Wall Street, anyone's going to get a tax cut," he said. But he isn't embracing Sen. McCain's call for still more and deeper tax reductions, saying, "I understand we may all have to pay more to get us out of this hole we're in."
Sen. Obama would cut taxes for middle- and lower-income workers with a tax rebate to offset payroll taxes. To help pay for that, tax rates on income, capital gains and dividends would increase on individuals with incomes of more than $200,000 and families with incomes above $250,000. The centerpiece of Sen. McCain's plan is a cut of the corporate-tax rate to 25% from 35%. He would extend President Bush's tax cuts indefinitely.
McCain aides say the Democrat has been winning the tax debate not through persuasion, but deception: expropriating the Republican argument with an unprecedented barrage of advertising, painting himself as a tax cutter and his opponent as the tax raiser.
"He has steadily tried to rebrand himself to get him away from his true agenda, since it became obvious the American people didn't like it," said Douglas Holtz-Eakin, Sen. McCain's chief economic adviser. "The real question is, will [voters] between now and the election unravel the contradictions?"
Mr. Holtz-Eakin says that each time an opponent gained traction against Sen. Obama on a tax argument, his staff has changed the plan and obscured the debate.
Before the New Hampshire Democratic primary, Sen. Obama said he would shore up Social Security by lifting the cap on income subject to Social Security taxes, set in 2009 around $106,800. Sen. Hillary Clinton attacked him for plotting a stiff middle-class tax increase. Sen. Obama then announced he would only impose a nominal Social Security surtax on incomes above $250,000 for individuals.
Sen. Obama initially suggested he would allow President Bush's tax cuts on dividends and capital gains to expire in 2011. After Sen. McCain pressed him, Sen. Obama clarified that dividend and capital-gains taxes would rise only on families with incomes exceeding $250,000.
Earlier this month, Sen. McCain criticized his opponent's refundable tax credits -- checks from the government -- as welfare, because some of those checks would be going to people who didn't work and pay income taxes. Obama aides "tweaked" a proposed tax credit for homeowners, saying it would go only to those paying payroll taxes. "Twelve days to go, 13 days to go in this election, he changed his tax plan because the American people have learned the truth about it and they didn't like it," Sen. McCain fumed in Florida Thursday.
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See reports from Washington and the campaign trail, at washwire.com.Peter Hart, a Democratic pollster, said Sen. Obama is winning the debate because he is significantly outspending Sen. McCain on ads. "The only reason we're seeing a shift here is that's the difference money makes in a campaign," said Mr. Hart, who conducts the Wall Street Journal polls with Mr. Newhouse. "Democrats have gotten through tactically versus philosophically."
Sen. Obama never exactly says he will raise taxes but rather speaks of rolling back "the Bush tax cuts on the wealthiest Americans." And he regularly accuses Sen. McCain -- misleadingly -- of plotting tax increases through his health-care plan. "There's only one candidate with a plan that could eventually raise taxes on millions of middle-class families, and it isn't me," Sen. Obama said in Chester, Pa., Tuesday. "It's my opponent, who'd make you pay taxes on your health-care benefits for the first time ever."
Sen. McCain would combine those increases with tax credits, which would make a net tax cut.
Before Sen. Obama took the stage at a rally Thursday morning in Indianapolis, Johnny Rodriguez stood on the edge of the crowd. The 50-year-old land surveyor had been out of work for nearly a year, a casualty of the city's crashing construction industry. He had recently moved in with his parents, he said, adding that while he expects Sen. Obama to raise taxes, that wouldn't affect him. "I'm not one of those guys who makes the big bucks anyway," he said.
Write to Jonathan Weisman at jonathan.weisman@wsj.com |
