US election about the rich versus the rest


ECONOMICS:A LOT of people inside the Washington Beltway are tut-tutting about the recent campaign focus on Mitt Romney’s personal history – his record of profiting as workers suffered, his mysterious was-he-or-wasn’t-he role at Bain Capital after 1999 and his equally mysterious refusal to release tax returns from before 2010.

Some of the tut-tutters are upset at any suggestion that this election is about the rich versus the rest. Others decry the personalisation: why can’t we just discuss policy?

Neither group is living in the real world.

First of all, the upcoming presidential election really is – in substantive, policy terms – about the rich versus the rest.

The story so far: former president George W Bush pushed through big tax cuts heavily tilted towards the highest incomes. Consequently, taxes on the very rich are the lowest they’ve been in 80 years.

President Barack Obama proposes letting high-end Bush tax cuts expire; Romney, on the other hand, proposes big further tax cuts for the wealthy.

The impact at the top would be large. According to estimates by the non-partisan Tax Policy Center, the Romney plan would reduce annual taxes paid by the average member of the top 1 per cent by $237,000 compared with the Obama plan; for the top 0.1 per cent that number rises to $1.2 million. No wonder Romney’s fundraisers in the Hamptons attracted so many eager donors that there were luxury-car traffic jams.

What about everyone else? Again, according to the policy centre, Romney’s tax cuts would increase the annual deficit by almost $500 billion. He claims that he would make this up by closing loopholes, in a way that wouldn’t shift the tax burden towards the middle class, but he has refused to give any specifics and there’s no reason to believe him.

Realistically, those big tax cuts for the rich would be offset, sooner or later, with higher taxes and/or lower benefits for the middle class and poor.

So as I said, this election is, in substantive terms, about the rich versus the rest. It would be doing voters a disservice to pretend otherwise.

In that case, however, why not run a campaign based on that substance and leave Romney’s personal history alone? The short answer is: get real.

Voters aren’t policy wonks who pore over Tax Policy Center analyses. When a politician – say, Obama – cites numbers in a speech, well, there’s always a politician on the other side to contradict him. How are voters supposed to know who’s telling the truth?

In fact, earlier this year focus groups given an accurate description of Romney’s policy proposals refused to believe that any politician would take such a position.

Perhaps in a better world, we could count on the news media to sift conflicting claims.

However, most voters get their news from short clips on TV, which almost never contain substantive policy analysis. The print media offer analysis pieces – but these, out of a desire to seem “balanced”, all too often repeat the he-said-she-said of political speeches.

Trust me – you will see very few news analyses saying that Romney proposes huge tax cuts for the rich, with no plausible offset other than big benefit cuts for everyone else – even though this is the simple truth. Instead, you will see pieces reporting that “Democrats say” that this is what Romney proposes, matched with duelling quotes from Republican sources.

So how can the Obama campaign cut through this political and media fog? By talking about Romney’s history and the way that history resonates with the realities of his pro-rich, anti-middle-class policy proposals.

Thus the true charge that Romney wants to slash historically low tax rates on the rich even further dovetails perfectly with his own record of extraordinary tax avoidance – so extraordinary that he is evidently afraid to let voters see his tax returns from before 2010.

The equally true charge that he is pushing policies that would benefit the rich at the expense of ordinary working Americans meshes with Bain’s record of earning big profits even when workers suffered – a record so stark that Romney is attempting to distance himself from part of it by insisting that he had nothing to do with Bain’s operations after 1999, even though the company continued to list him as chief executive and sole owner until 2002. And so on.

The point is that talking about Romney’s personal history isn’t a diversion from policy discussion. On the contrary. In a political and media environment biased against substance, talking about Bain and offshore accounts is the only way to bring real policy issues into focus. We should applaud the Obama campaign for standing up to the tut-tutters.

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