When it comes to taxes, Barack Obama has long championed “fairness,” but his “fairness” isn’t justice, it’s more demagoguery.
Indeed, according to press clippings from his time as a state senator, Barack Obama’s coalition building for the “working poor” extended beyond welfare policy to taxes. In February 1998, the then-state senator unveiled a “fair tax” which sought to increase personal exemptions for 10 million Illinoisans and make the tax code more “progressive.” Unfortunately, this loss in revenue had to be made up elsewhere and Obama targeted the so-called rich. This didn’t work in Illinois when the rich moved to other states.
In language eerily similar to some of his arguments today, notably at the Democratic national convention in Charlotte, Obama complained about “tax cut fever” gripping Illinois. Voters, he said, haven’t heard much about “tax fairness.” He also seemed to have an argument similar to the “Buffett Rule,” in which Warren Buffett’s secretary allegedly paid a higher percentage in tax than Buffett. Of course, the truth of the Buffett Rule is much more complicated: Buffett’s lower tax rate was from capital gains, which is already after-tax income.
“We’ve got a system where a millionaire pays the same tax rate as a single parent who’s making a minimum wage,” Obama said. “It’s working families that are bearing the brunt of our tax code.”
The move to increase the exemption, which was an end run around Illinois’s constitutional prohibition on a progressive income tax, was designed to restore “fairness and common sense to the tax system,” Obama told reporters, according to the urban newspaper The Chicago Defender. He added that we need to end “one of the most regressive” tax systems in the nation. But by ending what he deemed a regressive tax, Obama was really ending Illinois’s flat tax and making the state more reliant on the paychecks of the wealthy, who, in turn, fled the state, leaving the middle class paying the bill. By some measures, Illinois today has the nation’s largest budget deficit, at some $58 billion, according to the New York Times.
Illinois Republicans had hoped to tie overall tax reductions to reductions in the property tax, then among the nation’s highest, but Obama disliked this plan because, while it provided a modest property tax decrease for the middle class, it provided a “whopping tax break for wealthy home owners” who, in Obama’s eyes, “already bear less of a burden when it comes to state taxes.” In fact, according to the Chicago Tribune at the time (which I reviewed), of the $6 billion taken in from income taxes, only $200 million came from low-income citizens.
But Obama did not seem troubled by those figures. “If you own a $1 million home and pay $20,000 in property taxes, you’ll get a $1,000 a year tax break for the next five years. The more your home is worth, the bigger your tax break. Since the Republican plan leaves out renters and seniors [those not owning a home], it benefits only four out of 10 Illinoisans.
“Illinois and Indiana are the two worst states in the nation when it comes to making the working poor pay state income tax,” Obama noted.
Obama even couched some of his arguments in the politics of the day, throwing in welfare reform. “We impose state income taxes on people once they’ve received $4,000 in income,” Obama said, which “doesn’t make sense at a time when we’re trying to encourage people to move from welfare to work.”
This was an interesting observation for Obama to make. He strenuously opposed the 1996 welfare reform law, which he did everything to water down by proposing a commission to oversee all state changes. “(Welfare recipients) generally are not represented down here in Springfield. They don’t have powerful lobbies. They do not contribute to our political candidates,” Obama said in June 1997. He complained that “it’s hard to mobilize support for programs that cost money but benefit low-income folks,” Obama told the Chicago Tribune in April 1999, and became the sponsor of a $250 million earned income-tax credit law.
He even called the new welfare law “punitive,” according to the Chicago Maroon, the student newspaper of the University of Chicago. And he continued to focus on the “working poor” during his 2004 campaign.
“Obama’s campaign for the U.S. Senate demonstrates his firm commitment to progressivism. His website, Obamaforillinois.com, showcased his dedication to providing social services to working class and lower income families,” wrote the Chicago Maroon. His “liberal program also includes a living wage for all workers…and improving welfare programs such as Medicare and Head Start, which he says the Bush Administration has recently targeted to support funding cuts.”
It seems some things never change.