The Question of Taxes
If you had to pick the realm in which Barack Obama's campaign was a huge disappointment, I think you'd have to point to taxes. Obama pretty much managed to rhetorically out-conservative John McCain on the issue. His attack -- that John McCain's tax changes would hit the middle class while Obama's would spare 95 percent of Americans and hit only the rich -- was a neat way of merging the benefits of anti-tax conservatism with the benefits of populism. But it's not a sustainable policy approach. Matt Yglesias has a very good piece on this question in the most recent American Prospect:
To some, Barack Obama's successful 2008 presidential campaign points the way out of the box. As Obama described his plan while debating Sen. John McCain, "If you make less than a quarter of a million dollars a year, your taxes will not go up; if you make less than $200,000 a year, your taxes will go down." In other words, there's no reason to fear tax hikes because you won't be paying them -- someone else will.
Obama did not change the framework so much as find a way to survive within it. A platform of no tax increases for the bottom 95 percent can win elections, but it reinforces rather than debunks the right's fundamental view of the tax question -- that public services aren't worth paying for -- and merely suggests that the correct answer is to get someone else to pay for them. This is, to be sure, better than the alternative, which is to provide no public services at all. And amid a cataclysmic recession, there are sound macroeconomic reasons to eschew any kind of tax increase until recovery is underway. Still, it's hard to see how a long-term progressive agenda can be financed with the revenues raised through this method.
Every estimate we have suggests that government expenditures are going to keep rising. At some point we're going to have to pay for that. The old way that happened was Republicans attacked taxes and but relied on Democrats to raise them. But now we're in a game of fiscal crisis chicken. And no one seems any closer to flinching.
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