- The Washington Times - Thursday, July 16, 2009

ANALYSIS/OPINION:

If you want to know what Middle America thinks about President Obama’s economic policies, go to Ohio where things are about as bad as anywhere else in the country.

Mr. Obama carried Ohio by nearly 51.4 percent of the vote largely on his pledge to pull the state’s long-suffering economy out of its recession. But in the last five months, the nation’s unemployment rate has climbed toward 10 percent, and Ohio’s was approaching 11 percent. And the most recent Quinnipiac poll now shows Ohioans disapprove of Mr. Obama’s handling of the economy by 48 percent to 46 percent.

The sharp decline in Mr. Obama’s scores stunned the White House, which quickly sent Vice President Joseph R. Biden Jr. into the state to urge patience — saying it would take more time, maybe until the end of next year for Mr. Obama’s painfully slow, trickle-down spending stimulus to turn things around.

But clearly there has been a precipitous erosion in Mr. Obama’s scores on the economy, which were down from a 57 percent approval rating on the economy in May.

Significantly, his overall job approval scores between June 26 and July 7 have fallen sharply to the point where 49 percent of voters disapprove and 44 percent approve.

“These numbers indicate that for the first time voters have decided that President Obama bears some responsibility for their problems,” said Peter A. Brown, assistant director of the Quinnipiac University Polling Institute.

But the numbers reflect something deeper: growing doubts among the electorate about Mr. Obama’s big-spending economic agenda. Voters bought into it in November, but now they’re beginning to question how spending the nation more deeply into debt and raising taxes on a weakened or even recovering economy can create more jobs.

Americans remain intuitively distrustful of government and its promises, and they harbor doubts about the draconian level of taxes Mr. Obama and the Democrats want to inflict on the economy at large — and small businesses in particular — to pay for a massive big-spending agenda they intend to enact in the middle of a very severe, job-killing recession.

The Democrat-run House Ways and Means Committee was putting the finishing touches on an income-tax surcharge of up to 5.4 percent on incomes of more than $350,000 that will push the top tax rate to well over 40 percent — up from 35 percent today.

When you add Medicare payroll taxes and state income taxes to the mix, the top income tax rate would be over 45 percent if House Democrats have their way.

But this won’t just hit wealthier Americans with high salaries; it will also strike at small-business owners who pay their businesses taxes through their 1040 forms just like any other individual American. One-third of them employ anywhere from two to 100 employees. Overall, small businesses are defined as companies that can employ up to 500 workers. These businesses employ most of America’s workers.

They would be slapped with an onerous tax hike at a time when many of them are either closing their doors or laying off workers, and the rest are just struggling to survive.

“With unemployment nearing double digits nationwide, the last thing we need is a massive tax hike that will punish small businesses and cost even more American jobs,” House Minority Leader John A. Boehner of Ohio said last week.

But that may be the least of their troubles if the House Democrats health care plan were to pass the House with its mandates on small businesses to provide medical care insurance coverage for their employees that they cannot afford and that would put many of them out of business.

House Speaker Nancy Pelosi’s evolving health care plan was too much even for the conservative Blue Dog Democrats in the House — notorious for being all bark and no bite — who objected last week to its massive costs and impact on small businesses. A majority of their 52 members would vote against it unless major changes were made, Blue Dog leaders said.

The soak-the-rich-and-small-business Democrats were busy over in the Senate, too, where they were considering a long line of tax increases to pay for Mr. Obama’s nationalization of the health care system: a “millionaires” tax, a tax on employee health benefits for higher-income workers, a 1.5 percent Medicare tax on capital gains income. Others were proposing a value-added tax (VAT), or a national sales tax.

If you think it is the height of fiscal irresponsibility to raise taxes in a struggling economy with unemployment headed into double-digits, you’re right. This is crazy.

This is not a time when we should be talking about raising anyone’s taxes, middle-income or upper-income. This is a time when we need all of the economy’s oars in the water pulling together, especially upper-income investors the Democrats want to tax into oblivion.

This economy is desperately in need of tax-cut incentives to unlock an infusion of private investment capital to help job-creating entrepreneurs and existing businesses survive what is very likely to be many months of economic anemia and turmoil.

But I sense the political mood in the country, as we see in Ohio, has begun to turn against Mr. Obama and his tax-happy, spending-binge allies on Capitol Hill. He is losing his credibility on the core economic issues of our time, and that in the longer run is going to spill over into the rest of his agenda as well.

Donald Lambro is chief political correspondent for The Washington Times.

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