Obama's Re-election Strategy: Promising to Raise Taxes

Why the public will reject the president's latest campaign gambit.

On Monday, President Obama once again resorted to the age-old progressive tactic of dividing American by class, advocating an extension of the Bush tax cuts for families earning less than $250,000 -- and a tax hike on everyone above that threshold. "We don't need more top-down economics," Obama said. "We need policies that grow and strengthen the middle class." Critics were quick to see through the subterfuge. “This is more of the same, with different packaging,” said Chris Whitcombe, tax counsel for the National Federation of Independent Business (NFIB). “It won’t pass, and we will hear this rhetoric up until Election Day.”

The reasons are obvious. The president is desperate to turn the conversation away from last week's dismal jobs numbers. 80,000 new jobs were added in June, well below anything resembling a genuine recovery, and far less than the 125,000-150,000 jobs that must be created simply to keep pace with the growth of the working-age population. By aiming the increase at the so-called rich, Obama hopes to once again paint the Republican Party as "obstructionist" and their presidential candidate, Mitt Romney, as an out-of-touch, job-outsourcing elitist with little concern for the average American.

The Romney campaign was quick to respond, with spokesperson Andrea Saul sending out an email prior to the president's announcement:

President Obama’s response to even more bad economic news is a massive tax increase. It just proves again that the President doesn't have a clue how to get America working again and help the middle class. The President's latest bad idea is to raise taxes on families, job creators, and small businesses. Almost half a million fewer Americans are working today than the day Barack Obama took office, and we've just come through the worst job creation quarter in two years[.]

There are several other problems with the president's approach. First, painting Romney as an out-of-touch elitist may be red meat for Obama's hard-left base, but it may not be resonating with the general public. This may explain why Romney raised $106.1 million in June, setting a GOP fundraising record, and eclipsing the president's take by $30 million. Ominously for Democrats, 94 percent of the contributions were $250 dollars or less, generating $22.3 million of the total number. Donations were garnered from all 50 states and Washington DC.

As for outsourcing, Breitbart.com reveals Obama's two biggest fundraisers, John Rogers, CEO of investment giant Ariel Capital Management, and DreamWorks CEO Jeffrey Katzenberg, are dedicated outsourcers. Ariel Capital Management owns a $48.6 million stake in Accenture, the nation's number one outsourcer, according to the International Association of Outsourcing Professionals. Katzenburg is trying to outsource jobs to China. Moreover, Obama Jobs Czar and GE CEO, Jeffrey Immelt, has also sent 25,000 jobs overseas while cutting 34,000 domestically. In return for a $50 billion taxpayer bailout from the Obama administration, a "grateful" General Motors has started building cars in China and Mexico to save on labor costs. Throw in three taxpayer-guaranteed loans to Spanish clean energy conglomerate Abengoa, totaling $2.78 billion, and a $529 million loan guarantee to Finnish car maker Fisker Automotive, and the overt hypocrisy of painting Romney as the outsourcer in this race becomes painfully apparent.

Respecting the president's disdain for "top-down economics," one would presume we need the opposite, which Obama referred to as "some middle class-out economics, some bottom-up economics" at a campaign stop in Florida last month. Last Friday in Ohio, Vice President Joe Biden revealed what such rhetoric actually means. He told a National Education Association conference that government spending, not the private sector, strengthens the economy. "We believe that the way to build this country is the way we always have, from the middle out...invest in things that have always made our economy grow: innovation, research, development, infrastructure and education," he said. Yet if that were truly the case, America would be swimming in jobs, considering this administration has added $5 trillion to the national debt in less than four years attempting to do precisely that.

Painting the Republican Party as obstructionist is problematic as well. The 2010 election in which Republicans took over the House, gained seats in the Senate, and made tremendous advances in state legislatures and governorships across the nation, reflected the electorate's overwhelming desire to blunt such irresponsible spending. In fact, 17 states that elected fiscally conservative Republican governors in 2010 have brought down their unemployment rates at a far faster rate than their eight Democrat counterparts. And the most accurate definition of obstructionist by far belongs to the Democrat-controlled Senate that has tabled every budget presented to them by the House, and made no effort to produce one of their own in more than three years, despite being compelled by the law to do so.

As for targeting "families" making more than $250K per year, a substantial number of them are actually small business owners who create 65 percent of net new jobs. The president contends that 97-98 percent of those businesses earn less than $250K. That number remains in dispute, but even if one concedes that it is accurate, ABC News reports such a figure represents 894,000 small businesses that will see their taxes go up -- and, just as likely, the number of people they employ go down as a result.

And then there are the political ramifications of the president's proposal. Republicans are predictably against it, but some Democrats may not be on board either. The Wall Street Journal reports that "as many as six Democratic Senators are hedging their bets as the economy looks worse," and that two of them, Joe Manchin (D-WV) and Jon Tester (D-MT), prefer to overhaul the existing tax system along the lines of the Simpson-Bowles plan that lowers tax rates and closes loopholes. Mr. Obama commissioned that plan--and then proceeded to ignore its recommendations.

Overall tax reform is favored by many Republicans, all of whom, along with some nervous Democrats facing tough re-election battles, are eager to avoid "Taxmageddon." Taxmaggeddon is the term coined to describe the massive $494 billion tax increase facing Americans in 2013, unless Congress acts to forestall it. It reflects the expiration of the Bush tax cuts as well as several other tax increases, including a capital gains rate rising from 15 to 23.8 percent, and a dividends tax increase from 15 to 43.3 percent. Both of those will help finance the now-constitutional healthcare bill. According to the Heritage Foundation, families will see an average tax increase of $4,138, and low-income taxpayers can expect a $1,207 increase. Any or all of these taxes will kill any chance of a genuine job-generating, economic recovery.

Thus it is no surprise that both sides of the aisle concede that Obama's latest gambit isn't going anywhere until after the election in November. Yet Republicans intend to make it difficult for Democrats before then. Since the House is where spending bills originate and it is controlled by the GOP, Republicans are on the verge of passing a one-year extension of all the tax rates. This puts Senate Democrats in the position of having to decide--before Election Day--if they want to assuage their leftist, class-envious base by favoring a gargantuan tax increase in the midst of a shaky recovery at best, or the beginning of another recession at worst. One that would undoubtedly be exacerbated by the largest one-year tax increase in the history of the nation.

More to the point, as Bill Clinton himself admitted, before being brow-beaten back into the fold by his fellow Democrats, no tax increase makes sense in a weak economy. And that economy may be worse than advertised. Most Americans are unaware of the fact that the Labor Department uses something called a Birth/Death model to calculate the number of jobs created in any given month. That number is literally based on a guess about the number of jobs created by businesses too new to be counted in the Bureau of Labor Statistics (BLS) formal survey. In June, the BLS added 124,000 jobs to the total number created -- meaning that without the estimation the total count would have been a loss of 44,000 jobs. Even more tellingly, such calculations tend to be very optimistic during springtime and neutral during summer, meaning the next three months will reflect far more accurate -- and likely, far more dismal -- job numbers.

So why is the president pushing a tax increase? Because Obama is all about one thing and one thing only: himself. Beneath the populist facade, he remains a dedicated socialist/Marxist attempting to win re-election by any means necessary. If it means pushing America into a double-dip recession, costing fellow Democrats their seats in the House and Senate, and/or turning Americans against one another, whether that division is based on class, race, sexual orientation or religious beliefs, so be it. Perhaps the only thing more reprehensible is a wholly compromised mainstream media willing to abet the charade with their seemingly coordinated characterization of this gambit as a "middle class tax-cut extension," rather than the tax increase it truly is. Despite their protestations to the contrary, they too are "all in" with getting Barack Obama re-elected.

Finally, no debate regarding taxes or tax rates can be considered serious until Obama addresses the one issue he and his fellow Democrats have studiously avoided: out-of-control spending. Such calculated irresponsibility is the essence of adolescent thinking in a country that desperately needs to have an adult conversation about the limits of government benevolence. The president and his party prefer to blame Americans for not paying their "fair share."  That may resonate with many Americans. But it is completely at odds with the reality of a nation heading towards bankruptcy, all the tax hikes in the world notwithstanding.

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