Obama's Stealth Tax Cut

There's been a torrent of misinformation on this blog ever since the mid-term elections edged their head ever so slightly on the horizon. We've seen a wave of deficit hysteria, bashing Obama for just about everything from TARP to the Lindberg kidnapping and the specter of rising regulations and taxes.

That's why the front page of today's New York Times is so startling. They take us to Huntersville, N.C., a small community near the Charlotte metropolis to a country club rally organized by a Republican women's club.

Amidst the vinergary barbecued pork and the hush puppies, a Times reporter asks a number of those in attendance if they have seen their taxes go up. The answer is resoundingly "yes."

Then, we learn that federal income taxes have been down $400 for individuals and $800 for married couples for the past two years as part of the stimulus program. A Times/CBS poll showed that only 10 percent of those surveyed knew that their taxes had actually gone down.

How come no one knows? The Times speculates it is the way Obama did it. He wanted to encourage spending to get the economy moving again. That sounds logical enough. Plus, he did not want to hand out tax rebates a la George W. Bush because people tend to park those in the bank and not spend.

Problem was states, notably in North Carolina, simultaneously raised their taxes as the feds cut theirs, so not many people noticed. In North Carolina, the fed tax cuts put $1.7 billion back in the pocket of the typical Tar Heel. But it just didn't seem that way.

The problem seems to be separating Obama's actual actions from what the yahoos, as Larry Gross calls them, accuse him of doing. Tax cuts are one of them. Another is immigration. The Tea Party types love to whine about illegal immigrants but, in fact, the number has dropped from 12 million to 11 million during the Obama years and Obama has actually toughened enforcement and has forced more deportations than Bush. To be sure, some illegals are going home because of the bad economy, but the results speak for themselves.

When you take the trend farther, you begin to wonder about the deficit. How big will it really be? Jim Bacon tries to supply an answer but his rush-job book unfortunately is tainted by partisan, libertarian-conservative political concerns. Read the cover jacket. It has Jim "demolishing the arguments of liberals and progressives.."

But the tax cuts are real and Jim Bacon cannot demolish them. The Boomergeddonites try to deflect that by complaining about cutting tax hikes for the very rich, say those with incomes above $250,000. They claim that ending the tax bennies for the country club types will hurt small business and nip innovation in the bud. Mercedes sales, maybe, but the argument is a stretch.

As this highly polarized election approaches, it is critical to separate the wheat from the rest.

Peter Galuszka