Politics ’08: Will the tax debate drive voters?
This week marked the beginning of the “branding wars” in the national economic policy debate, with both of the major party presidential candidates seeking to box the other into a position they hope will stick in voters’ minds over the coming months.
Writing on Realclearpolitics.com this week, former Reagan Administration economic adviser Lawrence Kudlow gave a great recap of Sen. John McCain’s tax plan (laid out at this week’s National Small Business Summit in Washington) and then proceeded to give us an early glimpse of what no doubt will be the coming GOP attack formation on Sen. Barack Obama’s tax proposals. Reiterating the McCain campaign’s line that Obama’s tax plan would amount to “the largest single tax hike in the post-World War II period,” Kudlow went on to frame the Obama camp’s tax proposals as “class warfare” and branded the Democrat as a supporter of “big spending government.”
Of course, Sen. Obama was quick to do his own branding of the McCain tax package this week, charging that the Arizona senator “has no problem spending hundreds of billions of dollars on tax breaks for big corporations and a permanent occupation of Iraq,” adding that McCain “wants to spend $1.2 billion on a tax break for ExxonMobil.”
While the rhetorical skirmishing has just begun, a quick glimpse at the competing tax plans suggests that there is a stark contrast between the two camps’ approaches to the tax reform battle which is coming in 2009.
In short, McCain would keep the Bush tax cuts in place, reduce the corporate tax rate from 35% to 25%, keep the estate tax rate low, double the child tax exemption and phase out the Alternative Minimum Tax (AMT), the last two points a bow to the legions of hurting suburban middle-class voters. Beyond this, he has some fuzzy plans to veto Congressional earmarks (to cut wasteful government spending) and target examples of “corporate welfare.”
The Obama approach would eliminate the Bush tax cuts for those earning more than $250,000, raise the capital-gains tax rate to at least 20% (or possibly as much as 28%), eliminate the income tax for seniors earning up to $50,000, adjust the AMT so as to further protect middle-class families from its encroachment, provide $500 tax credits to families earning up to $150,000, maintain the estate tax rate at 45%, extend the $1,000 child tax credit, and bring an end to tax breaks for the oil and gas industries. Like McCain, he would also go after corporate tax loopholes. Revenue generation is pretty much left to raising the capital gains rate and significantly reducing the massive government spending on the Iraq war.
While dueling economists (let’s say a Lawrence Kudlow for McCain and a Robert Rubin for Obama) will be left to debate the merits and demerits of each plan for the cable nets and the pages of the New York Times, Wall Street Journal, Washington Post, et al, strategists for both camps know that the vast majority of voters will hear only extrapolated sound bites, not read the actual policy details.
In fact, the tax policy debate, as it was begun this week, fits neatly into the broad parameters of both camps’ dueling general election campaign strategies as a whole. The GOP argument, in the context of the tax issue (as in all other policy areas), is that Obama is inexperienced, an unknown, and a liberal. Whether they will eventually drag out the “tax-and-spend-” prefix one more time to define a Democratic presidential nominee has yet to be officially determined but is probably inevitable.
The Democratic counter-argument is that a McCain Administration is an extension of the eight years of George W. Bush. Whether it’s on taxes or Iraq, his approach will be defined as maintaining the “intolerable” status quo.
So, to answer our question, “Will the tax debate drive voters,” the answer is “yes,” at least to the extent that the tax debate defines the candidates on the question of the economy and to the extent that the economy defines the election as a whole. And, from our current vantage point, we know that everyday economic indicators (gas and food prices, home foreclosures, etc.) are dominant in voters’ minds, well above the Iraq war or any other issue.
And given the fact that the latest NBC/Wall Street Journal poll released this week finds that a staggering 71% of voters believe that the country is “on the wrong track,” the candidate with the best argument about how to turn the page on the current economic mess could likely win come November.
Political Observations of the Week:
“It’s not going to happen, If for no other reason than because what do you do with the 6-foot-2.5-inch president standing out in the hallway?”
Pollster John Zogby, dismissing calls for a Democratic “dream ticket” of Obama and Clinton.
“[The president is] a 200-pound ball and chain [around John McCain’s campaign.] Unless he finds some way to cut it loose, he’s going to be dragging it right through the election.”
Peter Hart, veteran Democratic pollster, and one-half of the polling team that conducts the NBC/Wall Street Journal poll, on the latest data about the presidential race.
“Leak the name and let it be around for a while. See what you might learn, just to be sure.”
Former Vice President Walter Mondale, suggesting how a campaign should proceed with the search for a vice presidential running mate.
“I don’t think these are folks that are going to go out and be for John McCain. Honestly, in the end I believe it will be a fool’s errand.”
Rep. Rosa DeLauro (D., Connecticut), on the McCain campaign’s decision to spend time trying to increase his appeal to women voters.
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John J. Kohut is an independent political analyst in Washington, D.C. He has been writing about national politics for more than a decade, including stints as an editor at the Cook Political Report and as senior editor at the Rothenberg Political Report.
