Over at The Spectator, Jonathan Jones looks at the US and UK approaches to their forthcoming budgets — cutting the deficit, taming debt, etc — and his fourth and final point concludes:
Obama the Lib Dem. It’s striking how similar Obama’s tax priorities are to those of the Liberal Democrats, even though the specifics differ either side of the Atlantic. Obama wants to extend the payroll tax cut for ‘160 million hardworking Americans’, which he says is worth ‘about $40 in every paycheck’ for ‘the typical family earning $50,000 a year’. The Lib Dems have been pushing to raise the income tax personal allowance to £10,000 ‘saving working people £700 a year’. Obama wants to close loopholes and reduce tax deductions for high earners, as well as increasing the capital gains tax rate from 15 per cent to 20. The Lib Dems have already succeeded in raising capital gains tax from 18 per cent to 28, and Danny Alexander is now calling for a lower rate of tax relief on pension contributions for high earners. As I say, the similarities are striking.
“The similarities are striking.” They are indeed because the Lib Dems (like Obama) have identified a sweet spot in tax policy.
The position is simple: reward the lowest paid to ensure that work pays, and fund it by taxing the wealthiest in society (NB: not by jacking up higher-rate income tax but by ending tax benefits which accrue only to high-earners).
It’s an excellent match of economic liberalism and social justice that can be supported by any of the flowering groups in our party. Heck, we might even win back Daniel Radcliffe’s support if he realises we’re just like Obama really.
* Stephen was Editor (and Co-Editor) of Liberal Democrat Voice from 2007 to 2015, and writes at The Collected Stephen Tall.
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6 Comments
I was very curious about what I would find under the headline. In many respects Obama is not a Lib Dem at all. No Lib Dem could tolerate the affront to civil liberties that the Patriot Act has brought with it. The Democrats did not bring it in, but they have not repealed it either.
Conversely on economic policy Obama is seeking to grow the economy to reduce the deficit, and is doing much better than we are in the UK.
But on taxes, yes this is an interesting point. Personally I am not a tax expert so I will reserve judgement until the figures come in, but the principle; the poor pay less and the rich pay more I very much support.
“The position is simple: reward the lowest paid to ensure that work pays, and fund it by taxing the wealthiest in society”
Obama is not funding the tax break by taxing the wealthy, he is funding it from the social security programme itself. This is terrible policy, the country is so desperate to boost consumer spending that its paying its workers/consumers from its own retirement plan/ and leaving a huge black hole for future generations to deal with .
“It’s an excellent match of economic liberalism and social justice ”
No its the opposite of both.
What “social justice” is there is in spending the retirement fund of a country?
How is the government trying to artificially stimulate consumer spending “economic liberalism”?
@Geoffrey Payne Good point about the patriot act. Its not just that the democrates have not repealed it but in may 2011 President Barack Obama signed a four-year extension to he Act: with very little protest from any one in his party.
@Geoffrey Payne: Agreed. If you stuck Obama’s presidential record on a picture of George Bush, how many people would be able to tell they don’t match?
Obama is one of the best Presidents they have had, (though that doesn’t take much), and in reality any comparison to UK LibDems is academic. I am happy if they are learning things from us, especially if they do more about welfare and healthcare for the poor; and I am so glad that the headlong run we used to have for copying everything ‘American’ seems to have slackened off somewhat. Just need the BBC to report more of what goes on within the countries of Europe so that people start to feel we belong with our own continent. As for Daniel Radcliffe, who cares…!?
Some of Obama’s tax priorities echo Lib Dem ones but there is little mileage in the comparison. A good case can be made that such changes are merely window dressing designed to provide the minimum concessions (plus soundbites to match) necessary in the face of massive public indignation about inequality.
The fact is that having campaigned on a platform of change, once elected he made himself a tool of the most powerful, corrupt and vested interests around. Far from governing as a democrat he has been a conservative – and that doesn’t mean a British-style One Nation sort of Tory but the rabid US sort. Over 95% of Republicans say that the US is spending about the right amount or too little on social security and health care yet Obama’s dream is of a “grand bargin” involving cutting spending on both – a direction of travel only Wall Street and Washington want (see first link).
But it is in his response to the financial crisis that is most shameful (see second link). Briefly (for it is a very complicated story), the big banks and others, having been freed from any meaningful regulation by a series of reforms, descended into predatory and fraudulent finance – NINJA, Liar and Teaser mortgages being just the most visible tip of a very large iceberg. Obama’s contribution has been to support bailing out the criminals (no other word is appropriate) at the taxpayers’ expense. However, it turns out the fraud is so brazen that in many cases the banks and others simply don’t have the paperwork to prove they own morgages they now want to foreclose on. What is to be done? Simple as it turns out – forge new loan documents, signatures, postdate documents – whatever it takes.
You might expect courts would take a dim view of this sort of thing and a few have but often they have simply waved through the most transparently obvious forgeries. Administrative chaos in the financial sector and dysfunctional courts has even led to cases of homes being successfully foreclosed on even when the owner never had a mortgage!
Obama could have stopped all this by telling it like it is and telling officials to enforce the law. Instead he has chosen to work as an enabler for for the banks and has manoevered to get a 50 state settlement that basically sweeps all the fraud under the carpet and allows the fraudsters to keep the loot. Not one senior executive has gone to gaol.
So, basically the US no longer has the rule of law as traditionally understood – equality for all under the law. What they now have is one law for the rich and well connected and another for the rest. This is pretty much the definition of a banana republic and an essential feature of feudalism. The subvertion of the rule of law didn’t start under Obama, but he has given it a big helping hand.
http://www.aljazeera.com/indepth/opinion/2011/08/20118118104193363.html
http://firedoglake.com/2011/10/07/president-clears-wall-street-of-crimes/