WASHINGTON -- In what will stand as the greatest irony of Barack Obama's soak-the-rich presidency, his deficit-cutting commission is proposing to sharply lower the top income tax rates on the wealthy.
The national news media hasn't really caught on to this part of the story yet, focusing on the bipartisan commission's proposals to raise Medicare taxes, raise the Social Security retirement age and freeze federal payscales.
But the plan's tax-rate cuts, designed by the panel's co-chairmen -- Democrat Erskine Bowles and Republican Alan Simpson -- are to a large degree based on economic supply-side axioms championed by former president Reagan and an army of free-market revolutionaries led by tax-cut crusader Jack Kemp. The tax-rate reforms, lowering the top tax rate to 28 percent, passed in 1986, with the support of liberal Democrats such as Dick Gephardt and Bill Bradley.
Like Reagan, Bowles (Bill Clinton's White House chief of staff) and Simpson, a cagey and cunning former senator from Wyoming, want to get rid of $1 trillion in corporate welfare and other tax breaks and loopholes, to bring the tax rates down and boost economic growth.
We are talking major tax-rate reductions here. While Obama has been bashing Wall Street fat cats, big banks and insurance companies, and is content with the 35 percent tax rate on U.S. corporations, his commission wants to sharply reduce that rate down to 28 percent, to make domestic enterprises more competitive in the global economy.
For the past two years, Obama has been attacking U.S. business firms for expanding into foreign markets, proposing that we punish those companies that "send jobs abroad" with higher taxes. But the Bowles-Simpson plan sensibly rejects that policy, proposing instead that Congress stop taxing overseas profits of U.S.-based global companies.
Obama ascended to the presidency on a campaign that blamed all of our country's economic woes on former president George W. Bush's 2001-2003 income-tax cuts. (Never mind that Obama wants to keep 98 percent of them.)
Since then, he has been saying that the best thing we can do for our economy is to raise the top tax rates on the wealthiest Americans -- people earning more than $250,000 -- because they aren't paying their fair share. Actually, the richest five percent of Americans already pay about 45 percent of all federal income taxes, but Obama never mentions that.
But the core of the commission's deficit-cutting plan suggests that we need to lower the income-tax rates to stimulate economic growth, business investment and expansion, and job creation, which in turn will boost federal revenues, reduce borrowing and eliminate the budget deficits.