At the Democratic National Committee meeting in Washington, D.C., last Saturday, several party leaders revived the mantra of “tax cuts for the wealthy” as an attack on President Bush. This, of course, was a campaign slogan of Sen. John Kerry, who as we all know was unsuccessful in his bid for the White House.
Carrying the tired Kerry line were Senate Minority Leader Harry Reid of Nevada, House Minority Leader Nancy Pelosi of California, and former Sen. John Edwards of North Carolina. They all repeated the chant of “tax cuts for the wealthy,” stating that the Bush tax cuts must be pulled back. This will sit well with Howard Dean, the duly-elected DNC chair whose anti-war presidential campaign platform also included a full rollback of the tax cuts. (Note, by the way, that Reid and Pelosi are minority leaders, as Republicans control both the Senate and the House. Note also that John Edwards is a former senator, as his Senate seat was taken over by Republican Richard Burr after his veep bid fell short.)
The only dissent from the DNC class-warfare position came from New Mexico Gov. Bill Richardson, a former Clinton Energy secretary and U.N. ambassador. Richardson believes in pro-growth fiscal policies and has cut income taxes and capital-gains taxes in his home state since becoming governor. But the Democrats are turning a deaf ear to Richardson and other party moderates. They prefer that the Democratic party remains the tax-increasing party.
There are many reasons why the tax-the-rich, class-warfare battle cry is a non-starting political dud. But here are a few eye openers.
According to exit polls from last November’s presidential election, middle-income voters showed no signs of supporting class-warfare policies. In the $50,000 to $75,000 income group, which comprised 23 percent of last year’s electorate, Bush defeated Kerry 56 percent to 43 percent. Bush also won the next higher income bracket, the 14 percent of voters earning between $75,000 and $100,000, by a margin of 55 percent to 45 percent. All in all, exit polls showed that people earning $50,000 and above — a group representing 55 percent of all voters — went for Bush 56 percent to 43 percent.
It would appear that the middle class once more rejected a class-warfare, tax-the-rich platform. This won’t stop Democrats from again committing political hari-kari, but voter data seem pretty conclusive that populist left-wing campaigns against rich people and businesses are doomed to failure.
Another reason for plunging Democratic fortunes is that roughly 50 percent of U.S. families — or about 95 million people — are card-carrying members of the investor/ownership class. Investors tended to vote in favor of Bush by about 10 percentage points. They are undoubtedly quite happy to create wealth by investing and keeping more of their dividend and stock market gains.
The Democrats make yet another huge mistake in their opposition to Social Security reform through personal savings accounts that can be invested in financial markets. If you take them at their word, Democrats must think investment markets are risky gambles. The voting public thinks differently. A recent Zogby poll shows that 61 percent of voters under 30 and 58 percent of voters under 50 favor personal savings accounts. (Those over 55 won’t be affected by any Social Security reform legislation.) And as a trade-off to cure personal saving accounts, likely voters, by 61 percent to 23 percent, favor a proposal to hold down future benefits to the inflation rate rather than wage indexing.
It would appear that in their quest for left-wing ideological purity, the Democratic party is determined to fall off the proverbial election cliff. So be it. While George W. Bush is bringing the country into the 21st century, the Democrats are stuck somewhere between the 1930s and the 1970s. It’s a political death wish. But they don’t seem to realize it.
— Larry Kudlow, NRO’s Economics Editor, is host of CNBC’s Kudlow & Company and author of the daily web blog, Kudlow’s Money Politic$.