President Barack Obama’s appeal to “shared sacrifice” from America’s wealthy carries political risk for the Democrat who was elected in 2008 in part because he managed to captivate upper middle-class urban voters.
The president’s plan for deficit reduction, which he unveiled on Monday, calls for roughly $3 in tax increases for every dollar in spending that’s cut. The bulk in additional revenue would be realized through repealing tax cuts enacted during the Bush Administration in 2001 and 2003 which disproportionately benefited the rich.
Even with the Bush tax cuts, the top 10 percent of income earners pay 70 percent of federal income taxes and more than half of all federal tax revenue. By contrast, the bottom 46 percent of households pay no income tax at all.
Opposition lawmakers have characterized the president’s push to raise taxes on the wealthy as “class warfare” and do not believe that raising taxes at a time of lackluster growth is healthy for the economy to begin with. They would rather reduce the corporate tax rate from 35 to 25 percent to stir investment and job creation.
Centrist Democrats are also wary of the president’s newfound “tax the rich” rhetoric. Politico reports that the small but influential cadre of party members who are left of center fear that Obama may lead them back “to the bad old days of the 1970s and 1980s when tax hiking liberals drove the Democratic Party to the powerless margins of politics.”
“Third Way” Democrats, who led the party under Bill Clinton in the 1990s, realize that college educated, middle-class voters have become a crucial part of the liberal base. They overwhelmingly voted for Obama in 2008 when he won election by a large, seven point margin over his Republican contender.
According to recent opinion polls, these centrist voters, who typically declare themselves “independent” of either major party, are defecting to the right. They do not believe that the president can lead the country back to prosperity and are disappointed with his inability to “transcend” the old partisan divides in Washington in favor of a new era of fairer and more decent political discourse.
If the president’s recent attempt at class warfare is any indication, it appears that Obama has given up hope that he can fundamentally change the character of American politics too. Instead, he is speaking to his progressive base which complained that he was too willing to meet Republican halfway on spending reductions and entitlement reform. They welcome the president’s new tone but they are a minority and cannot win a presidential election without help from the center.