Here Comes the Tax Man
Obama's empty tax cut pledges.
12:00 AM, Apr 15, 2009 • By ALEX CONANT
Last Election Day, Barack Obama had most Americans convinced they could trust him as much as anybody with their taxes.
Today, we know better. The president and his allies have postponed or altogether abandoned his promised tax cuts, and are instead laying the groundwork to raise taxes on everybody.
In retrospect, Obama's campaign to win the mantle of tax-cutter was well conceived and executed. He repeatedly rebuffed John McCain at the presidential debates: "We both want to cut taxes; the difference is who we want to cut taxes for I want to provide a tax cut for 95 percent of working Americans." Obama promised to take "not one dime" more in taxes from Americans making less than $250,000 per year.
By Election Day, the public saw little difference in the candidates' tax positions. Wary of any politicians' promises, exit polls showed half of voters believing their taxes would go up regardless of who won. The rest split relatively evenly: More than one in four of all voters believed Obama would not raise their taxes.
With Obama in office for fewer than 100 days, it's already clear his tax pledges were largely campaign rhetoric. Some of the tax relief he proposed during the campaign was forgotten soon after he won. For example: His $3,000 per job tax credit to incentivize businesses to hire additional employees has never been heard from again.
Other tax cuts that Obama once championed have been deferred until after his term in office. Specifically, according to his budget, his plan to eliminate capital gains taxes for small businesses is not scheduled to take effect until 2014. Considering the urgency of this proposal on the campaign trail--it remains a cornerstone of his jobs agenda on his transition team's website--it's curious that he now believes those tax credits are not needed for the next 5 years.
Even Obama's much-ballyhooed "Making Work Pay" tax credit is not what it seems. Originally passed in the stimulus bill, the subsequent budget passed by Congress ends the credit in just two years.
How could the Democrats allow Obama's signature tax reform to expire, resulting in higher taxes on 95 percent of Americans? When asked at last month's prime-time press conference what he considered essential for Congress to support, the president said: "The bottom line is that I want to see health care, energy, education and serious efforts to reduce our budget deficit." Not only do tax cuts not make his list of priorities, all of those high-price agenda items require more government revenues. Some will come from fulfilling his campaign promise to end many of President Bush's tax cuts, resulting in trillions of dollars of new government revenues.
To help fund the rest, the budget also includes unexpected new taxes that Obama either never mentioned or glossed-over on the campaign trail. His cap-and-trade program would raise energy costs by thousands of dollars per family--a new tax Democrats do not offset in their budget with once-promised credits.
And--something that was never mentioned on the campaign trail--he is proposing to reduce deductions for mortgages and charities to pay for a government-run health-care plan. But even with that new source of revenue, Obama's health-care plan has a large budget hole that the White House may now fill by taxing employees' health care benefits.
After witnessing Obama's determination to increase spending, coupled with his quick disregard for his campaign's tax-related promises, the future is even more distressing. Economists agree that the nation's never-ending deficits and mushrooming debt can only be sustained with so much foreign lending. After that, the government will be left with three painful options: dramatic cuts in spending; government-inspired inflation; or higher taxes on the middle class.
That first option is apparently off-the-table so long as Obama is president. That leaves either inflation or higher taxes. He promised to take "not one dime" from the middle-class. But either he intends to fully break that promise--or those dimes won't be worth what they used to be.
Alex Conant is a communications consultant who served as the Republican National Committee's national press secretary during the 2008 presidential campaign. Previously, he was a spokesman at the White House and in the U.S. Senate.