Catastrophe - Dick Morris [24]
By dividing taxpayers by class, Obama nullified the Reagan strategy. But it was the Clinton and Bush tax cuts, which so reduced the tax burden on the middle class that antitax rhetoric meant nothing to them, that made his victory possible.
Obama is passing further tax cuts on the middle class and higher tax “refunds” for the nontaxpaying poor, dramatically increasing the political isolation of the real taxpayers in America. Before he moves to raise taxes on upper-income Americans, though, he wants first to neuter them politically. By driving a fissure between the middle class, who don’t pay much in federal income taxes, and the richest 25 percent, who pay almost all the taxes, he renders those who have to pay the taxes politically helpless.
And that is Obama’s strategy for the future—the indefinite future: to finance the American government by raising taxes on the politically impotent rich. Hit them hard at the tax office, and then outvote them on election day.
The 25 percent of Americans who pay 86 percent of the income taxes (to say nothing of the 1 percent who pay 40 percent) will be like New York City’s benighted landlords. Outvoted by their tenants, they’re forced by state law to conduct their business under draconian rent controls, which so limit their incomes that many just walk away from their properties. Likewise, taxpayers could become a hostage class, subject to the political impulses and inclinations of those who don’t share their tax burden.
No politician will come to their aid, since their collective voting strength isn’t sufficient to win any election—not to mention the fact that any politician suspected of coddling the rich at the expense of the bulk of the voters who pay no taxes, and the sizable minority who reap benefits through “refundable” tax credits would be slated for extinction.
In the meantime, the majority continue to receive refundable tax checks in even larger amounts. It is their job to eat the tax money, not to generate it.
Of course, there’s a political fallacy in Obama’s worldview. The richest taxpayers may be impotent politically due to their small numbers, but they’re not impotent economically. The top 20 percent of earners account for 46 percent of all consumer spending.81 They’re the ones who spend money. If Obama declares war on them, as he appears to be doing, he cannot recover economically without them. It’s to them that he must look to make sure the American people start doing everything they’re not doing right now: buying stock, paying taxes, consuming goods and services. Without their participation, the economy has no hope of recovery.
Obama cannot succeed by waging war on the rich. It didn’t work when FDR tried it, and it cannot work now.
OBAMA: FOLLOWING THE LESSONS OF FDR’S SECOND TERM
As he prepared to become president in the days between his election and the inauguration, Obama and his aides made it known that he was focusing, with special attention, on two figures from our history: Abraham Lincoln and FDR. With luck, he learned important lessons from Lincoln, who has so many to teach.
But he appears to have learned some more dangerous lessons from the story of how Franklin D. Roosevelt handled the economy during his second term—the years from 1937 until 1941, when the depression seemed to drag on with no end in sight.
To understand Obama’s political strategy—so that we can defeat it—we need to learn how FDR faced a crisis very similar to that which engulfs us now. Unfortunately, Obama’s tactics suggest much of the same emphasis on class warfare and special interests that characterized Roosevelt’s second term.
FDR deserves his heroic reputation as an American icon. He brought us Social Security, the minimum wage, securities regulation, and widespread unionization and, of course, saved us in World War II.
But the most important brick in the wall of respect that has been erected to him was that he cured the Depression. In reality, he did no such thing.
When Roosevelt first