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Forget the Past Three Years, Let's Talk About Fairness

12:00 AM, Jul 14, 2012 • By IRWIN M. STELZER
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It’s easy to blame politicians for their inability to come to some sort of compromise on the issues facing the economy. And they surely deserve a good portion of whatever obloquy is heaped upon them as they posture and subordinate the national interest to narrower and often baser goals. But politicians respond to voters, and voters are just about evenly divided on most issues, a fact reflected in the more or less neck-and-neck race being run by Barack Obama and Mitt Romney on the road that leads to 1600 Pennsylvania Avenue.

obama and united nations

The closeness of the race leads to two strategies. The first is to sling as much mud as possible, a reasonable approach since negative ads seem to be effective. The second is to find some issue that a vast majority of voters find attractive, and is something that will wrong-foot the opponent.

China-bashing won’t do: The positions of both candidates vary from tougher to toughest, the latter crown moving from head to head with the latest speech. Being for or against Obamacare won’t do: Voters have decided where they stand on that radical change in the health care system, and nothing any candidate can say will cause them to switch their voting preference.

So President Obama has hit on an issue that he sees as a multi-faceted sure winner: tax fairness. Or as John Selden put it in 1689, “equity.” Equity, or fairness, Selden pointed out, is in the eye of the beholder, or in this case the eye of the president. It is “a roguish thing … according to the conscience of him that is chancellor,” Selden noted.

In the president’s case fairness requires that the Bush tax cuts, due to expire at the end of this year, be extended another year for the 98 percent of families with annual incomes of less than $250,000. Rates on incomes in excess of that would go up from 33 percent to 36 percent for families and 35 percent to 39.6 percent for individuals, taxes on capital gains would shoot up from 15 percent to 23.8 percent, and taxes on dividends would jump. 

Obama says it is only “fair” that the wealthiest Americans bear more of the burden of reducing the deficit. Romney responds that the new rates would hit job-creating small businesses, since profits of many of these enterprises are taxed at personal rates. That, he says, would reduce already anemic growth and job creation rates.

In fact, this debate is less about taxes and more about Obama’s effort to frame the broader debate about which candidate should be granted the keys to the White House. The president knows that he cannot run on his record. Obamacare remains unpopular, and therefore is barely mentioned, except occasionally before predictably favorable audiences and by a surrogate (Biden before the NAACP, for example), even though Obama regards it as his signature, historical achievement, the culmination of an effort pursued unsuccessfully by many presidents, allegedly starting with Teddy Roosevelt. The unemployment rate has risen; millions of workers have dropped out of the work force; homeowners in the tens of thousands have lost their homes and now that some technical details have been worked out foreclosures are likely to pick up; middle class incomes are somewhere between stagnant and declining. So if Obama is to win he must airbrush the last three years out of the history books.

He knows, too, that the revenue from his plan to raise taxes on the rich won’t make a dent in the deficit. The fairness issue is designed to appeal to his left leaning base, and persuade the blue collar Reagan Democrats who supported him in 2008 but are now disenchanted to stick with him rather than switch to an uncaring rich guy who made his fortune at Bain Capital draining cash from companies and shipping jobs overseas. Romney has not helped himself by being photographed in a fire-engine red jet ski and “roaring across Lake Winnipesaukee on a powerboat large enough to hold two dozen family members gathered for a weeklong vacation at his New Hampshire compound [estate],” to quote the Obamaphilic New York Times. Fortunately for Romney, the New York Times and its liberal brethren, who were charmed by the doings at the Kennedy compound, which included an ample share of water sports, do not represent the national attitude towards rich people. Some 75 percent of voters tell pollsters that Romney’s wealth makes no difference in how they plan to vote.

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