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    John E. Sununu

    Obama’s cynical tax campaign

    LAMAR ALEXANDER has been targeted by the White House, and he’s not happy about it. With a vote on the “Buffett rule’’ scheduled for Monday, the senator from Tennessee was one of a handful of Republicans the White House thought it could squeeze by cranking up the political rhetoric surrounding the proposed millionaires’ tax. It didn’t take long for Alexander to shoot back, labeling the move “a cynical smokescreen.’’

    Given that the procedural maneuver is destined to fail, it’s all that and more. The effort reveals a president hell bent on reelection, determined to avoid any substantive issues, and offending the very type of leader that he claims America needs - and that he wishes he were.

    Alexander is no demagogue. As an unusually popular two-term governor of Tennessee and as secretary of education under George H. W. Bush, he earned his reputation as a pragmatic, bipartisan problem-solver. In contrast, having accomplished little in the Senate, candidate Barack Obama asserted that he was ready to “change the tone’’ in Washington - a hollow promise which makes pursuing this meaningless vote on the Buffett rule an act of hypocrisy as well.


    The substance of this “issue’’ is simple: Under our tax code, the wages of millionaires are taxed at 35 percent, while a married couple with income below $70,000 pays at 15 percent. Long-term capital gains, generated by the increase in value of stocks or a piece of real estate, are taxed at 15 percent for everyone. As a result, the total tax rate for a relatively small number of people with lower wages but large holdings of stock - people like Warren Buffett and Mitt Romney - will be closer to the capital gains rate.

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    This is not a conspiracy. It is the way that Congress, on a bipartisan basis, has structured the tax code. Capital gains are taxed less because the assets are held longer and because the returns on stock occur after companies have already paid corporate taxes. If the president thinks the capital-gains tax rate should be higher, he should come out and say so. Lacking the intellectual honesty to deal with the principle at stake, he plays to the political extremes instead.

    In the fog of populism, we also lose track of the need for tax simplification. Channeling his inner referee, Obama opines that all Americans should “play by the same rules.’’ But where capital gains are concerned, that’s already happening; the rate is 15 percent - period. He wants to do just the opposite: create a special rule for individuals with “too much’’ capital gains income. Beyond discouraging investment and raising the cost of capital for businesses, this makes the code even more complex.

    Obama also cloaks the argument for raising taxes with pleas for “fairness.’’ Today, the top 1 percent of taxpayers earns 20 percent of the income but pay 37 percent of all income taxes. When do we reach Obama’s definition of fair? When the 1 percent pays half of America’s taxes? Stoking these fires has no meaningful effect on the deficit, raising less than $5 billion next year against yet another trillion-dollar deficit under Obama.

    Not to be deterred, the White House dispatched Joe Biden to Exeter, N.H., Thursday to turn up the heat on New Hampshire Senator Kelly Ayotte. The vice president may well be the most gregarious and likeable guy to hold the office in decades. But having served for decades in the Senate, he should know that pressure is no way to win a senator’s vote.


    Like Alexander, Ayotte has served successfully in state government and earned a reputation for listening, thinking, and avoiding the harsh edges of partisanship. She may be new, but every senator quickly learns that collaboration happens when you sit down with a colleague, not when you trade jabs across microphones. Real collaboration is how big things get done, but nothing big is on the president’s agenda this year.

    For his part, Alexander practically begged the president to join him in “endorsing his own Simpson-Bowles Debt Commission.’’ Nothing doing there. That would take real work, involve tax reform, and require changes to out-of-control entitlement spending. Does the president really think he can intimidate a senator who has already taken a stand for deficit reduction that Obama himself is afraid of? Of course not. That’s precisely what makes his Buffett rule campaign so cynical.

    John E. Sununu, a regular Globe contributor, is a former US senator from New Hampshire.