‘Obama Taxes 3.0′ Subject of Journal Editorial
The good news is that Barack Obama said on ABC Sunday that he might not go through with his plans to increase taxes.
The bad news is that the economy has to be mired in recession to avoid the largest tax increase in the nation’s history. …
For the record, here is what he told ABC’s George Stephanopoulos.
Mr. Stephanopoulos: “So even if we’re in a recession next January, you come into office, you’ll still go through with your tax increases?”
Senator Obama: “No, no, no, no, no. What I’ve said, George, is that even if we’re still in a recession, I’m going to go through with my tax cuts. That’s my priority.”
Mr. Stephanopoulos: “But not the increases?”
Senator Obama: “I think we’ve got to take a look and see where the economy is. …”
Even individuals staring down the barrel of Mr. Obama’s tax increases should not wish for an economic recession to give them a reprieve. The relevant point is that it was early last year, when the “Bush economy” was still humming, that Senator Obama first proposed pushing taxes sharply upward on “the wealthy,” while giving what he calls “tax cuts” (actually they are credits, not rate reductions) to “the middle class.”
At the time, Mr. Obama was the long shot in the Democratic Presidential sweepstakes, and it made some political sense to reassure the party’s intensely liberal primary voters with class-war boilerplate on taxes.
Under ObamaTax 1.0, he would have repealed all the Bush tax cuts … The official campaign line was that tax rates really don’t matter to economic growth.
Summer arrived, the Clinton challenge was history and with the general election ahead came Obama Tax 2.0. It posited that the top rate on capital gains now would be 20%, described on this page August 14 by economic advisers Jason Furman and Austan Goolsbee as “almost a third lower than the rate President Reagan set in 1986.” This was progress.
Now with the big vote less than 60 days off and John McCain pounding him as a tax-raiser and pulling ahead in some polls, the Democratic nominee has decided to release ObamaTax 3.0, the most interesting upgrade so far. If the economy is still weak in January, a President Obama might defer all of the planned increases.
Several interpretations of this shift are possible, none of which reflect badly on Senator Obama’s political learning curve. …
Thus Mr. Obama’s unambiguous answer Sunday to whether he’d insist on his tax increases if the economy is in an official recession: “No, no, no, no, no.” It seems Mr. McCain is right that taxes do matter.