LAMBRO: Obama’s deft and misleading tax-cut plan

COMMENTARY:

Those who think conservatism is dead need to look at how Barack Obama skillfully played the tax cut issue like a Stradivarius.

The freshman senator is about as liberal as they come, but unlike other Democratic presidential aspirants who came before him, he learned from the mistakes of Walter Mondale and Michael Dukakis.

One of the things he learned is that you are not going to get anywhere waving an ACLU card like the Massachusetts governor or proclaiming, as Mr. Mondale did, that he would raise taxes on the middle class.

Mr. Obama knew, as Bill Clinton knew, that he had to find a way to trump the tax cut issue that Republicans had used effectively in election after election and that continued to galvanize voters across the board.

So he devised a plan, like Mr. Clinton, that called for raising taxes on the top 5 percent of American income earners, but offered a $500 to $1,000 refundable tax credit for low- to middle-income taxpayers.

That allowed him to campaign around the country peddling boiler plate tax-and-spend liberalism to his party’s base, raising taxes on oil giants and other big corporations along with wealthier Americans who he said didn’t pay “their fair share” (even though they pay the bulk of the income taxes) - as he relentlessly preached “tax cuts” for the middle class.

When the race was nearly over, polls showed more Americans believed he was going to lower their taxes than those who said Mr. McCain would lower them more.

“He’s been very careful about how he framed his tax position and has bent over backwards not to allow himself to be tagged as a liberal on the tax issue,” said Michael Franc, a vice president and policy strategist at the conservative Heritage Foundation.

“To the extent he’s run into any trouble on that, it’s Joe the Plumber and the whole notion of Obama redistributing incomes. But for that, he’s done a good job of defining himself as a tax-cutter, which is a conservative value,” Mr. Franc told me this week.

For those voters who gave the details of his tax plan cursory attention, “he passes that test. Most voters are not going to get into the distinctions of marginal tax rates or refundable tax credits,” he said.

In the closing weeks of the campaign, however, the troublesome details of Mr. Obama’s plan had turned into a sticky cobweb of contradictions that was fast becoming the incredible shrinking tax cut.

Inexplicably, the skillful wordsmith, who had made “middle-class tax cut” the heart and soul of his economic recovery agenda, was suddenly using differing figures in his campaign speeches and TV ads to identify which tax brackets would see their taxes cut.

In the last month alone, he reduced the plan’s $250,000 threshhold by as much as $50,000 in an on-camera TV ad played all over the country.

Then the week before election week, Sen. Joe Biden, his vice-presidential running-mate, appeared to cut the tax plan’s income eligibility figure to $150,000 - followed by campaign surrogate Bill Richardson, the tax-cutting New Mexico governor, who lowered the middle class threshhold to $120,000.

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