Will Taxes Become Obama's Weapon of Class Destruction?

Wed, 25 Feb 2009 17:07:59 +0000 – By Christopher CoffeyRepublican Political Strategist

President Obama gave a terrific address to the Joint Session of Congress and gets an A+ for style. He was uplifting, and he did his best to get hold of an agenda over which he was losing control. He is an incredible orator.

When it comes to substance, President Obama gets a D-. Obama truly believes that only government can deliver prosperity, even though the markets are rejecting this assessment.

"A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future."

Obama is telling America that Bush's eponymous tax cuts are really transfers of wealth from the poor to the rich and that, worse, it hindered increased government spending ("invest" is an Obama euphemism for "spend").

Obama will have difficulty securing the cooperation of Republicans if he continues making statements like these.

First, it is deceptive. If anything, the government has been taking an increased income tax share from the wealthy. According to the Tax Foundation, the richest 5% of taxpayers paid close to 60% of all income taxes in 2006, while the bottom half paid only 2.99%. Compare this to 2000, where the richest 5% paid a 56.47% share of income taxes and the bottom half paid 3.91%.

So, there was no transfer of wealth to the wealthy. The richest 5% of taxpayers were actually paying a lower income tax share in 2000 when we had a surplus, than in 2006 when we had a deficit. Obama's assertion regarding the surplus is doubly deceptive because the tax code did nothing to hinder spending over the past eight years.

Second, this statement represents a key ideological difference between Obama and many Republicans. It tells Republicans that Obama believes private incomes are really public property. If the government takes more in taxes than it needs, and runs a surplus, the surplus will be Obama's to spend, and not his to return to the taxpayers who gave it to him.

Even worse, Obama is signaling that he will treat the tax code as a weapon of class destruction. His tax code is not a vehicle to raise revenues --it is a tool to punish and reward.

President Obama has a lot of work cut out for him over the next few years. It will be a lot easier for him if he avoids the distracting battle cries of class warfare, and focuses on a workable solution for fixing our credit crisis.