From the Philadelphia Bulletin

Here is Sen. Barack Obama, D-Ill., in his own words that I find most revealing: “I probably always feel on some level I can persuade anybody I talk to.” That’s what he told Time on Feb. 20, 2006, and I happened to stumble across that quotation while browsing through a book by Lisa Rogak titled Barack Obama In His Own Words.

I think it is revealing, because it displays a conceit and arrogance that reveals why he makes many of his most outrageous policy blunders. For example, he wants to negotiate without preconditions with the likes of Mahmoud Ahmadinejad, Hugo Chavez and Castro. That’s a mammoth blunder on many counts, but it betrays his belief he can somehow persuade anybody. As I’ve suggested, if he were president during World War II, he’d still be trying to sweet talk Hitler, Mussolini, Tojo and Stalin … probably while they were landing troops on our shores. The beginning of wisdom is knowing your own limitations, and Mr. Obama obviously doesn’t.

The book contains a few other quotes that suggest he thinks he’s far more persuasive than he is. Consider this one from People magazine on Dec. 25, 2006: “I feel confident that if you put me in a room with anybody – black, white, Hispanic, Republican, Democrat – give me half an hour and I will walk out with the votes of most of the folks. I don’t feel constrained by race, geography, or background in terms of making a connection with people.” I’d have to tell Mr. Obama that whether he would get those votes depends on what he’s trying to sell. If he is trying to convince them of his view that there is a moral equivalence between Russia’s aggression in Georgia and the American liberation of Iraq, I’d say he’s not going to walk out with many votes and perhaps he’d walk out without any. If he is trying to convince them we should have tax increases during a tough economic patch, I don’t think he’d convince anyone. In fact, he finally reversed himself on this and said depending on the condition of the economy, he would not impose his soak-the-rich tax increases he favors.

His belief that he can persuade everyone explains why he may think he can talk his way out of anything and sometimes if necessary lie himself out of anything. Take his promise of offering a nonpartisan approach. After his dulcet oratory had finished, his critics immediately said he doesn’t have a non-partisan bone in his body. They said he follows the extreme left-wing party line. They added he has never shown any examples of reaching across the aisle or going against his own party. What is perhaps most damning is that he went along with the famously corrupt Cook County Chicago political machine and refused to lift a finger in support of an effort awhile back to reform it.

So what does Mr. Obama say when asked to give an example of his bipartisan approach? He cites two examples, one involving Mr. McCain and ethics reform and another involving a disarmament issue. It turns out that both passed the Senate virtually unanimously, so it was as though he reached across the aisle in support of God, country, and apple pie. Perhaps he thinks the power of his oratory makes facts and reality immaterial. In contrast, bipartisanship and reaching across the aisle appear to almost be in Mr. McCain’s DNA, just as Gov. Sarah Palin has displayed a fierce determination to aggressively attack corruption even if found in her own party and to reach across the aisle.

As the full picture of Mr. Obama keeps emerging, I’m afraid it reinforces my initial view that he is a phony, a fraud, a hypocrite and a liar … among other things. In today’s column I turn to another aspect of his fraud, because I find that in examining his tax program that is as fraudulent as he is. I am indebted to a brilliant article in the Weekly Standard (Sept. 15, 2008) by Newt Gingrich and Peter Ferrara titled, “Tax Cuts, Real and Imaginary: Obama’s spending programs in disguise.”

It turns out when you get past the sweet oratorical tones of tax cuts to come, you find not tax cuts but just another spending program, a new giveaway plan for which Mr. Obama and Democrats have always had great affection. Messrs. Gingrich and Ferrara write, “When Obama says that he will cut taxes for 95 percent of Americans, he is talking about his proposal for a $500 refundable income tax credit for all but the top 5 percent of income earners. For the bottom 40 percent of income earners, this will be just another check from the federal government rather than a reduction in tax liability. It is another sharp increase in government spending rather than any sort of tax cut. An arbitrary cash grant does not, moreover, do anything to improve the economy or incentivize productive business. That comes from cutting taxes.”

As I’ve often pointed out, this new kind of politician named Mr. Obama is just serving up again the same left-wing programs that the Democratic Party has tried to peddle for the last thirty years. Messrs. Gingrich and Ferrara point out this is a variation of a George McGovern proposal to send everyone a $1,000 check. Voters saw that as a crass vote-buying scheme, a massive electoral bribe, and rejected the scheme and the proponent of it. When you look at his proposals instead of his pompous pieties, you realize that his election would mean four years of Messr. McGovern, Mondale, Carter and Dukakis all rolled into one, the most deadly of political cocktails.

When hasn’t there been the same kind of reaction to the Obama vote-buying scheme as there was to the McGovern scheme. The difference is now the mainstream media is not vetting Mr. Obama or his proposals. He could propose feeding the hungry by packaging the blue cheese on the moon, and the mainstream media would not even pause in its full-scale press to elect this most unqualified, most dangerous of presidential candidates in history.

So when a tax cut turns out to be a federal giveaway and a crass voter-buying bribe, I can say his tax plans are a fraud, and not a tax cut. Mr. Obama’s tax proposals are fraudulent down the line. For example, Messrs. Gingrich and Ferrara point out that the Republican tax policies have already completely eliminated federal income taxes on the poor and lower middle-income Americans, and almost eliminated them on Middle America.

Data from the Congressional Budget Office and the Internal Revenue Code show that the lowest 40 percent of income earners as a group aren’t paying tax at all, but are actually getting net payments from the government. The middle 20 percent pay 3.8 percent. That means the bottom 60 percent of earners pay less than one percent of federal income taxes, while earning 26 percent of national income.

And the figures show the top one percent of income earners pay 40 percent of all federal incomes taxes, which is almost double their share of national income. The top 10 percent pay 72 percent of federal income taxes, while earning just 39 percent of the nation’s pretax income.

This income tax environment came about due to income tax cuts of Reagan and Bush II, due to the earned income tax credit first proposed by Reagan, and due to the child tax credit enacted as part of the Gingrich/Republican Contract with America.

Mr. Obama would raise the marginal rate for almost every federal tax. But there’s one problem Mr. Obama ignores and the mainstream media do not point out – the tax increases won’t even scratch the one trillion dollars of increased federal spending advocated by Mr. Obama.

Messrs. Gingrich and Ferrara conclude, “Obama’s plans are the opposite of tax reform. Instead of closing loopholes and lowering rates, he is creating new loopholes and raising rates.”

Messrs. Gingrich and Ferrara do advocate a tax program that would help America that would invigorate the economy, that would create jobs, and that would make America stronger and more competitive. For example, we have the second-highest corporate tax rate in the industrialized world. So why not lower the 35 percent rate to 25 percent to make us competitive with the rest of the world? When Ireland 20 years ago adopted a 12.5 percent corporate tax rate, it went from a per capita income that was the second-lowest in the European Union to a per capital income that is the second highest. Mr. McCain has advocated that cut in the corporate rate.

Messrs. Gingrich and Ferrara advocate the same kind of cut on the noncorporate income tax rate that small business now pays. Mr. Obama, of course, advocates increases in this area, exactly the wrong move unless you’re trying to kill the economy and make American business uncompetitive.

Mr. Obama, who has a brilliant knack of doing exactly the opposite of what should be done, wants to raise the capital gains tax by 33 percent. This would decrease the value of Middle America’s IRAs, 401(k)s, stocks and mutual funds. Remember that two-thirds of Americans own stocks in mutual funds or in some other form, so this is an Obama tax increase that would hurt Middle America. And Mr. Obama admits it would also reduce federal tax revenue, as demonstrated time and again by capital gains increases in the past. So Mr. Obama would not only hurt Middle America, slow down savings and investment, but also raise the deficit and national debt by cutting tax revenue.

Mr. McCain wants to keep the capital gains tax rate at the present 15 percent, and opposes Mr. Obama’s proposals to raise it.

The one area that needs work is the payroll tax, which is now the largest tax paid by most workers. The payroll tax is a deterrent to employment, as it is a fat additional cost incurred for every hire. This tax could be eliminated by going to Social Security personal savings accounts. Instead of paying payroll taxes, workers would pay into their own savings account, where they could earn a decent return rather than the low returns now earned in a Social Security system.

Mr. McCain favors starting personal savings accounts. Mr. Obama opposes them. Mr. McCain is the agent of change and sound tax policies. Mr. Obama is the regurgitator of broken down discredited tax policies of the McGovern era and even before. Mr. McCain’s policies would invigorate and strengthen the economy. Mr. Obama’s would wreck the economy and weaken America.

Herb Denenberg is a former Pennsylvania Insurance Commissioner, Pennsylvania Public Utility Commissioner, and professor at the Wharton School. He is a longtime Philadelphia journalist and consumer advocate. He is also a member of the Institute of Medicine of the National Academy of the Sciences. His column appears daily in The Bulletin. You can reach him at advocate@thebulletin.us.
©The Evening Bulletin 2008

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