"Main Street" America understands fairness. Senator McCain must show that the top five percent in earnings already pay 60% in taxes. . The difference between the plans is not the middle class, the middle class will be getting a tax break in both plans. McCain needs to show that 1/3 of the people Obama wants to give a tax break to pay no taxes. Meaning that they will be getting a government grant. Its time for the Republican Party to take its gloves off, if you dont believe me ask Karl Rove:
The Tax Issue Still Resonates By KARL ROVEConventional wisdom says tax cuts have lost their political power. "Cutting taxes has run its course," "America's great fever for lower taxes . . . has cooled," and "Republicans relied too easily on tax cuts," are among the assertions I've seen recently from different pundits.
One reason offered for the alleged decline of tax cuts as a potent issue is that since 2000, tax cuts have taken 13 million filers off of the income tax rolls. Today, one-third of all filers have no federal income tax liability and nearly 40% of all federal income taxes are now paid by the top 1% of taxpayers (60% by the top 5%). The fewer people who are paying taxes, the fewer people who care about tax cuts, or so goes the reasoning.
But don't tell the presidential candidates tax cuts are unimportant. Mr. McCain promises to renew the '01 and '03 tax cuts and proposes new tax cuts for health care, education and business.
Mr. Obama says he's for "middle-class tax cuts." He has pledged to cut taxes in at least 16 speeches in the past month. Polls and focus groups have clearly convinced the Obama high command that advocating tax cuts is critical to victory.
Taxes still matter because they are highly visible and unpopular. In a July 2008 Pew Poll, 52% of Americans said it was "difficult to afford" taxes. By comparison, 46% said the same about health care, 49% about home heating/electric bills, and 38% about food.
And in times of economic challenge, concern about taxes rises -- especially among blue-collar households skeptical of promises that tax increases won't affect them. Voters understand that taxes are paid not by someone behind the tree, but ultimately by them. The share of GDP going to federal taxes this year is 17.9% -- close to the 18.3% average of the past 40 years.
About Karl Rove
Karl Rove served as Senior Advisor to President George W. Bush from 2000–2007 and Deputy Chief of Staff from 2004–2007. At the White House he oversaw the Offices of Strategic Initiatives, Political Affairs, Public Liaison, and Intergovernmental Affairs and was Deputy Chief of Staff for Policy, coordinating the White House policy making process.
Before Karl became known as "The Architect" of President Bush's 2000 and 2004 campaigns, he was president of Karl Rove + Company, an Austin-based public affairs firm that worked for Republican candidates, nonpartisan causes, and nonprofit groups. His clients included over 75 Republican U.S. Senate, Congressional and gubernatorial candidates in 24 states, as well as the Moderate Party of Sweden.
Karl writes a weekly op-ed for The Wall Street Journal, is a Newsweek columnist and is now writing a book to be published by Simon & Schuster. Email the author at Karl@Rove.com or visit him on the web at Rove.com.
So while Mr. Obama says that only the top 5% will pay higher taxes under his proposals, many voters are skeptical. Nearly three out of every four filers who'll pay higher taxes under a President Obama are small businesses, the source of most new jobs and growth. An Urban Institute-Brookings Institution Tax Policy Center study found that 663,000 (73%) of the 912,000 filers hit by Mr. Obama's tax increases will report business income -- i.e., they are small business owners. His tax hikes will affect every worker at those enterprises.
While Mr. Obama claims his tax increases will pay for "tax cuts," much of his increases are actually earmarked for a massive new spending program that will send tax "rebate" checks to 45.6 million filers who have no income tax liability. These filers will get a check of up to $500 a person or $1,000 a couple even though they do not pay federal income taxes.
While Mr. McCain argues that tax increases would harm our fragile economy, there is another powerful argument he has yet to deploy. He needs to make a principled argument against tax increases by grabbing Mr. Obama's favorite tax term -- "fairness." Mr. McCain should argue that fairness dictates that there are reasonable limits on how much government can take from someone. Nearly all Americans agree. The Tax Foundation, for example, found last year that 91% of Americans thought the maximum anyone should pay in taxes was 30% or less of their income.
Mr. Obama wants to raise the top marginal rate by nearly a fifth to about 40%. With Medicare taxes and his proposed increases in Social Security taxes on the wealthy added in, this would result in over 50 cents out of every additional $1 earned in the top income brackets going to government. We are a nation that rejects class warfare, yet these powerful sentiments have yet to be tapped by Mr. McCain.
Most Americans hold an intuitive belief that one of the most effective ways to keep government in its appropriate place is to limit its access to our wallets. They have a well-grounded, experience-based suspicion that if government can take anything it wants from some (high-income) people, it can, and most likely will, take it from everyone else, too. They are unenthusiastic about massive new spending because they understand tax increases both feed government and whet its appetite for more.
The tax issue has lost its political punch in the eyes of some commentators, but not among voters. So the presidential candidates recognize this year's election could hinge on who better convinces Americans that he has the right plan to cut taxes.
Mr. Rove is a former senior adviser and deputy chief of staff to President George W. Bush.
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