President Lyndon Johnson's administration was known for his War on Poverty. President Obama's will become notable for his War on Prosperity.
We're speaking, of course, of Obama's plans to hike income taxes on the most wealthy 2 or 3 percent of the nation. He's not just raising the top rate to 39.6 percent; he's also disallowing about one-third of top earner's deductions, whether for state and local taxes, charitable contributions or mortgage interest. This is an effective hike in their taxes by an average of about 20 percent.
And soon the next shoe will drop - he'll announce that he's keeping yet another of his campaign promises: to apply the full payroll tax to all income over $250,000 a year. (Right now, the 15.3 percent Social Security tax only applies to the first $106,800 of income - you neither pay the tax on income above that, nor accumulate added benefit.) For many taxpayers in this bracket, this hike will raise their total taxes by about half.
Finally, he's declaring war on investors by raising the capital-gains-tax rate to 20 percent.
These increases are politically insignificant: The top 2 percent of the nation casts only about 4 percent of the votes, barely enough to attract the notice of even the most meticulous pollsters.
But they have enormous economic significance. Those who earn more than $200,000 pay almost 60 percent of America's income taxes and account for a third of its total disposable income. If these spenders and investors are hunkering down, waiting for the revenuers to beat down their doors, their confidence will be anything but robust. Their spending will drop; they'll be unlikely to invest (except in new tax shelters).
Franklin Roosevelt's presidency was marked by an emphasis on recovery in his first term and class warfare (which he called "reform") in his second. Campaigning for re-election in 1936, FDR famously declared, "I should like to have it said of my first administration that in it the forces of selfishness and of lust for power met their match. I would like to have it said of my second administration that in it these forces met their master."
Obama seems to have skipped the first-term FDR program and jumped right into the class divisions and warfare of the second.
But the president would do well to remember that Roosevelt's assault on the rich led directly to the recession of 1937-39 - when unemployment soared back up to 19 percent. (It was brought down only by World War II.)
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