The most important political contribution of Ronald Reagan to the American political dialogue was his ability to move the issue of taxes from its economic populist cast into a populist, blue-collar issue. But under Bush, the issue switched back to one of class warfare, as an increasing number of Americans paid no taxes at all and the rates on those who did pay them were lowered. Now a chance encounter with Joe the Plumber has afforded the Republicans the chance to use taxes as a blue-collar issue.
The opening Joe provided, as McCain skillfully exploited in the third presidential debate, gives the Republican ticket its first shot at victory since its candidate punted on the bailout bill -- the terrible, pork-laden corporate giveaway that Congress passed and Bush signed. Now McCain finally has an issue. Obama's tax plans and spending programs have emerged as the key point of difference between the campaigns. And the Democrat's comment to Joe that he saw his tax policy as a "way to spread the wealth around" underscores the motive behind his program: to redistribute income. Obama might as well have told Joe, "I want to take the hard-earned money you make fixing pipes and give it to other people."
If the Republican Party concentrates its fire on the tax issue and the redistributive impulse behind Obama's plans, it can close the Democratic lead point by point, day by day, until the election. McCain's campaign must resist the temptation to take random shots on a million other issues and zero in on the tax-and-spend issue, emphasizing how taxes penalize those who work hard and live right.
In fact, the rich are paying vastly more in taxes than they ever have. According to the excellent book "Reality Check" by Dennis Keegan and David West, the percentage of income tax revenues paid by the top 1 percent of the population has almost doubled in the past 20 years. Now they pay 40 percent of all income tax revenues. (The bottom half in income pays less than 3 percent.) Despite the lower rates, the rich are paying more and more in taxes because they are earning more and more. In the past eight years, real, after-inflation income growth for the top 10 percent of the population has been more than 45 percent.
Essentially, the tax debate comes down to economic populism vs. social populism. The Democratic economic populists rail against the rich and demand that they pay more in taxes. The Republican social populists decry the notion of income redistribution as rewarding failure and penalizing hard work. Until Joe, the economic populist polarity dominated the presidential race, to the detriment of the Republicans. But now Joe has brought the social populist argument back to life.
Because there always are, there will doubtless be those who see the social populist approach as a code word for racism, especially because it is directed against the proposals of an African-American candidate. But the dichotomy social populism exploits is one that separates the most productive members of our work force from the others, in the spirit of Joe the Plumber. Race is quite beside the point.
The question is whether McCain has the discipline to pursue the tax issue doggedly for the rest of the campaign. The other targets -- from Ayers to ACORN -- are so tempting but ultimately appeal to the Republican base and few others. But taxes hit us all.
The core difference between the American working class and its European equivalent is that Europeans are inclined to vote based on their current conditions, while Americans base their decisions more on their goals and objectives for the future. Americans assume upward mobility, while Europeans do not. Both groups are correct in their assessments. Despite the widening gap between the richest 20 percent and the poorest in the United States, the economic chart constantly is churning, and people are continuously moving out of the bottom fifth and upward on the scale, their places on the bottom of the ladder yielding to new arrivals, usually from abroad. So Americans are right to vote their dreams. And Obama's European socialist tendency to sabotage growth in the interest of "fairness" would serve merely to convert an American model that works into a European one that does not.
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