Wealth Redistribution, Tax Brackets and the Presidential Endgame

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The McCain Campaign uncovers a novel bit of oppo today: A heavily-edited 2001 audio tape of Obama on a Chicago radio station discussing the failure of the Civil Rights Movement to redistribute wealth through the courts. Obama says it was a tragedy that civil rights activists were not able to put together “coalitions of power through which you bring about reditributive change.”  This speaks to the McCain late-stage argument that Obama harbors a radical plan to redistribute wealth in America. More concretely, McCain is criticizing Obama for wanting to take away the Bush tax cuts for the wealthy and replace them with targeted tax cuts to those with lower incomes. (Update: The full audio has been posted here. A rough transcript here.)

This argument remains problematic for McCain, because back between 2000 and 2004 McCain also had concerns about the distribution of wealth in America. More specifically, he opposed the Bush Tax cuts because a “disproportional amount went to the wealthiest Americans.”

NBC’s Tom Brokaw asked McCain about this on Sunday, during a Meet The Press sit down. McCain’s answer is a bit difficult to parse. He seems to suggest that some progressivity is good in the tax code, but that progressivity should be minimized (or at least not increased) during difficult economic times.

On Sunday, Brokaw played McCain tape of his 2000 and 2004 quotes opposing the Bush tax cuts, which he now supports extending, on the grounds that the wealthy do not need such a big tax break. Here is McCain’s response:

MCCAIN: That’s what — listen, even the flat tax people somewhat pay more. Even — you put into different, categories of wealthier people paying, higher taxes into different brackets. I mean — and the — and these are different times, my friend. These are times of the biggest financial crisis we’ve faced in America.

BROKAW: Well, let me raise that, then, if I…

MCCAIN: So — so let me just tell you again, I also said, when I opposed the Bush tax cuts, said — that is left out of this equation. I said I’ve got to — we’ve got to get spending under control. Spending was completely out of control. We laid a $10 trillion debt on future generations of America. We owe the Chinese a half a trillion dollars. Spending was the — was the, I think, the really biggest aspect, to a large degree. It weakens the dollar, it raises the cost of goods to Americans. The housing crisis combined with a country that’s living way beyond its means is a combination which has put us into this great financial crisis we’re in.

UPDATE: Per Politico’s Ben Smith, the Obama campaign has pushed back with the Harvard Law Professor Cass Sunstein, who makes the point that Obama did not say in the interview that he supports the courts creating a right to redistribution of wealth. But Sunstein does not contest the fact that Obama is advocating in this interview “redistributive change” through popular organization, which is presumably another way of saying legislative action.

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