The second potential opening for the GOP has to do with one particularly egregious aspect of Obama’s extraordinary budget. Republicans are reacting with horror to the Obama budget as a “job killer” and a potential threat to the economy. But there is no more pernicious provision than this tax maneuver whereby Obama intends to limit the value of upper income taxypayers’ deductions. This is a Scrooge-like move to rob charities of badly needed funds. They are making it more expensive to give to charity and thereby reducing the money available for a host of philanthropic activities. Robert Gibbs gives critics the back of the hand (doesn’t he always?), but numbers don’t lie.
Think of it this way: A taxpayer in the 35% bracket gives a gift to United Way of $10,000. Under the current rules he can reduce his tax bill by $3500. Under the Obama plan he can only reduce his tax bill by $2800. In the Obama scheme, then, that United Way contribution now costs the taxpayer $700 more. The obvious result: give less to United Way so the higher tax bill can be paid. To be blunt, the government is discouraging charitable giving. It is hard to think of any worse tax policy or any one more harmful to the needy. (Democrats perhaps have a scheme here: make the government the only viable social welfare institution in the country.)
There could be no more stark difference between the parties. Democrats want to deprive charities of money to fund the government. Republicans want to protect and indeed expand vital non-profit entities. Bush 41 wanted a “thousand points of light.” Obama wants to raise the electric bill. Republicans would be wise to make this crystal clear to the voters.
Both of these issues may bear fruit, not only because Republicans are on sound policy footing, but because they exploit an unstable coalition in the Democratic Party which may, if the Republicans are skilled, fragment. Do union bosses and high tech workers have that much in common? Do non-profit foundation employees share the goals of advocates of bigger government? Do the very rich really expect to pay more taxes to subsidize other voters’ mortgages and health care? These are some tenuous alliances which Obama was able to cobble together, in large part because he used uplifting, ambiguous rhetoric and avoided specifics. Everyone was in favor of hope and change. But they are more divided, I would wager, on the specifics.
Obama no longer has the luxury of vagueness. Huge deficits, top-down bureaucracies, and attacks on faith and non-faith based philanthropic organizations make for juicy targets. It remains to be seen, however, just how clever the Republicans can be in exploiting them. If they are, some of pieces of the Obama winning coalition may fall into their laps.