Friday, October 17, 2008

Al's 1% vs Barry's 95%

On the editorial pages, in the streets, and during the debates, conservatives are trying to whip up opposition to Obama's tax plan.  So far, the attacks don't appear to be resonating with the average American.  Why are more Americans apparently on board with Obama's tax increases for the top 5% when they (arguably) endorsed tax cuts for the top 1% during the Bush Administration?

A quick answer is the state economy.  I recall seeing an old cartoon in which a voter says that he votes for Democrats when he's out of work and for Republicans when he has a job.  We may simply be witnessing a similar sentiment on a national scale. 

But the real difference may be in how the the Obama campaign has articulated its vision and framed the issue.  In 2000, Al Gore endless railed against the Bush tax cuts arguing:

[Bush] would spend more money on tax cuts for the wealthiest 1% than all of the new spending that he proposes for education, health care, prescription drugs and national defense, all combined. Under [Gore's] proposal, for every dollar that I propose in spending, I will put another dollar into middle class tax cuts.

Despite the promise of middle class tax relief, some 60% of American expressed support for the Bush plan at the time of enactment. 

Obama's tax plan carries a similar desire to cut taxes for the middle class and not only opposes McCain's plans for cutting taxes for higher income brackets, but also counters with an increase in the top marginal tax rate from 36% to 39%.  How is Barry garnering support for his more liberal plan?

I think the core difference is in how the two candidates have conveyed their message.  Gore's message failed to take into consideration the inherent optimism of the American people.  According to some 2000 polling data (which I couldn't seem to locate 8 years later) about 25% of Americans believed that they were among the top 10% of income earners and another third who admitted to not being in the top 10% believed that they soon would be.  Right there, you have a built in majority of voters who really would not have a problem with 60% of a tax cut going to the top 10% of income earners.

Thus, when Gore talked about the inequity of providing so much benefit to the top 1% and 10%, most Americans really didn't have a frame of reference defining who those people are or how much they make.

Contrast this with Obama's message.  He too talks in terms of percentiles: tax relief for 95%.  But he also defines these people: folks or households making a quarter mil and under.  Now, voters understand exactly where they stand in today's economic climate and know who is going to get the shaft.  While I work with a group of largely conservative professionals who don't think $250k is a lot of money, a sizable percentage of Americans think that making $250,000 a year qualifies one as rich. 

Naturally, hope springs eternal in the American voter's breast.  Apparently, there are a bunch of plumbers out there that even though they make nowhere nowhere near $250,000, they hope to do so one day and do not believe the Obama plan is fair.  Plumbers also really hate taxes.

We will see in a few weeks if the county gives its stamp of approval to Obama's plan.

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