October 31, 2008

October 31, 2008 | Commentary on Taxes

Middle-Class Tax Cuts Could Disappear.  Again.

Campaign promises often wilt after the election. Tax-cut promises are a frequent casualty.

By backtracking on tax-cut pledges even before the election, Barack Obama threatens to break Bill Clinton's speed record. It wasn't until a week before his first inauguration that Clinton openly reneged on his promise to cut taxes for the middle class.

There's another similarity. Candidate Clinton and Candidate Obama both promised to raise taxes, too, but only on "the wealthy." And both proceeded to widen the definition of "wealthy" to encompass more and more taxpayers.

During his campaign, Clinton said, "The only people who will pay more income taxes are the wealthiest 2 percent, those living in households making over $200,000 a year." After the election, he proceeded to raise taxes across-the-board.

Less than a month into his presidency, the Washington Post headlined, "Clinton Asks Middle Class to Pay Higher Taxes; President Issues `Call to Arms' To Restore Economic Vitality." After Clinton's Jan. 14, 1993, news conference, the Post wrote that Clinton "complained that it was only the press, not voters, who considered that issue [tax cuts] important."

At first, Clinton maintained that only those earning over $100,000 would pay more under his revised tax plan. But The Heritage Foundation noted it would hit far more broadly, raising taxes for individuals making $25,000 and couples making $32,000. The Los Angeles Times headline echoed that finding: "Clinton Threshold on Tax Bite Dips to $30,000 Incomes."

Fast forward to now. Even before the election, Obama is downsizing his tax promises. First he advertised that nobody would pay higher taxes unless they earned over $250,000 a year. Now his TV ads say the threshold is $200,000. And in campaign remarks in Pennsylvania, running mate Joe Biden lowered it again, to $150,000.

It all parallels the gradual tax plan changes Bill Clinton started making shortly before his election. Then, after his election, the gradual changes turned into dramatic transformation.

As the New York Times noted in February 1993, "... beginning about a month before Election Day, Mr. Clinton took care to say he was not making a read-my-lips pledge on middle-class taxes. He was making the more narrow pledge that he would not raise taxes to pay for his new spending programs. But the overall thrust of what he promised ran in the opposite direction."

On Feb. 15, 1993, just weeks after he was inaugurated, Clinton completed the course change in a national TV address, telling the nation, "I've worked harder than I've ever worked in my life to meet that goal. But I can't."

His excuse was two-fold. First, he "hadn't realized" just how bad the deficit was. Second, he believed the people wanted the new spending he had proposed during his campaign.

Clinton sought to defuse the political damage by promising to hit "the wealthy" harder. His Feb. 6, 1993, radio address told the nation he would "get rid of windfalls for the wealthy before I ask any of the rest of the American people to make a contribution," and that, "We're going to ask the most from those who have got the most and gave the least during the past dozen years."

Clinton blamed Washington politicians - prior presidents in particular - for supposedly concealing just how bad the federal deficit was, thereby justifying his reneging on his campaign promises.

In 2008, our deficit is far worse and Obama's spending pledges are far greater than Clinton's. Only someone who has been locked in a cave is unaware that this year's deficit spending is approaching a trillion dollars.

This is no proof that Obama will renege, Clinton-style. But his recent adjustments in describing whose taxes will go up certainly are not reassuring.

Obama also is using a looser definition of wealth than Clinton did. The $200,000 threshold that Clinton applied in 1992 equates to $311,000 today, according to the Bureau of Labor Statistics. Obama's most-recent $200,000 threshold is the same as a $128,255 income would have been in 1992.

The week before Bill Clinton was inaugurated, Sen. Daniel Patrick Moynihan, D-N.Y., observed, "This week has been rather the clatter of campaign promises being tossed out the window."

Those who fear that this year's campaign promises will also be thrown out the window should keep their eyes wide open and be ready to dodge whatever might fall on their heads.

Ernest Istook is recovering from serving 14 years in Congress and is now a distinguished fellow at The Heritage Foundation.

About the Author

Ernest Istook Distinguished Fellow
Government Studies

Related Issues: Taxes

First appeared in WorldNetDaily