Lost in all of the campaign spin and generous mainstream media coverage of Senator Barack Obama is an understanding of why his economic approach will lead to a stronger, more competitive America. In an attempt to escape the soundbites and “nuances” of Senator Obama’s presidential campaign, I have three fundamental questions for him that permit a simple, straightforward response. Here are the questions:
Question One: What share of federal income taxes should the top 25% of Americans pay, and how many Americans should pay no federal taxes?
Liberals know they lost the more obvious battle in the tax war that dealt with marginal tax rates at truly confiscatory levels. Once President Ronald Reagan decimated the arguments for tax rates in the 70% range, no politician with national aspirations attempts to breach the 40% line of demarcation. Senator Obama even tries to wrap himself in the Reagan tax blanket by tying his tax rates to Reagan’s tax rates.
The less obvious battle in the tax war is over who should pay taxes and how much of the tax burden should a minority of Americans carry. Because Democrats have successfully used tax credits and other tax avoidance measures to expand the number of Americans who pay no federal taxes, a larger share of federal taxes are paid by a shrinking number of Americans. By shielding more of the income of the bottom 50% from being taxed and exposing more of the income of the top 25% to be taxed, the marginal tax rates remain low, but the effective taxes paid by the top 25% increases significantly.
Liberals constantly declare that the “rich” should pay their “fair share” of federal taxes. When exactly does a taxpayer reach his fair share of taxes? Liberals won’t say. They make these claims against millions of nameless and faceless Americans who they presume to know can afford to pay more federal taxes. In many cases, these Americans are the ones who live within their means, play by the rules, plan for the future, work the longest hours, have spent the most time and money earning advance degrees, and hope that the government will stop asking them to pay even more for programs they don’t use so they can save for the children’s college education or reinvest in their small businesses.
Matt A. Mayer, President & CEO of Provisum Strategies LLC and Adjunct Professor at The Ohio State University, is the author of the book “Homeland Security and Federalism: Protecting America from Outside the Beltway” available in June 2009.