It's rather amusing watching the liberal media launch a full-scale attack on George Stephanopoulos and Charles Gibson, with Gen. Tom Shales of The Washington Post leading the charge. ABC's Stephanopoulos and Gibson had the audacity to ask Obama some tough questions during the Democratic debate Tuesday night. Challenge Obama with well-informed questions on tax policy and politics? Wound the media favorite? How dare they?
The fallout is fascinating. With members of the mainstream liberal media lunging at each other's throats, it's kind of like watching Hillary and Obama go at it.
But here's the deal: During the debate, Obama bungled his answers on tax policy, big time. Period. End of sentence. End of story. To my liberal friends in the media, all I can say is: Get over it. Your guy has a very poor grasp of basic economic principles.
First off, you don't raise taxes during a recession. That's a no-brainer. Second, doubling the capital-gains tax rate will affect Americans up and down the income ladder, not just rich hedge-fund managers. In addition, capital-gains tax cuts are self-financing, and they stimulate jobs and the economy. You want to raise budget revenues and spark economic growth? Cut the cap-gains tax rate. That's what history shows.
The Wall Street Journal's Steve Moore points out that in 2005, almost half of all tax returns reporting capital gains came from households with incomes under $50,000, while more than three-quarters came from households earning less than $100,000.
Obama also proposed uncapping the payroll tax, another blunder that will hit people up and down the income ladder. While Obama pledges tax hikes only for folks earning more than $200,000 a year, his tax hike on payrolls would actually slam middle-income earners. The cap on wages subject to the payroll tax is presently $102,000. By eliminating that cap, Obama will be soaking veteran firemen, cops, teachers and health-service workers, along with a variety of other occupations.
In fact, in America's largest cities, a firefighter married to a schoolteacher can earn close to $200,000 filing jointly. So not only will each spouse separately pay more for Social Security and health care under Obama's plan, together they'll also be slammed by Obama's cap-gains tax increase.
This is more than just a failure to understand the Laffer curve. It's another cultural misstep by Obama. I can't help but wonder if the senator knows any cops or firemen. His appeal is to well-educated latte liberals. That remark about middle-income folks having turned to God, faith and guns because of economic setbacks? Not only was it ill-advised, it illustrates the wide cultural chasm that exists between the candidate and the rest of America.