McCain's repeal of the "Alternative Minimum Tax" shades of Gordon Brown's 10p debacle?

Gordon Brown is set to scrap many of his proposed tax increases pursuant to threats of a backbench rebellion arising from the disaster that was Labour’s showing at the local and London elections. Not for voters Britain’s foreign policy or climate change, this time it was all about credit crunch, food and petrol prices and Brown’s tax assualt on the poor.

Labour is now clearly on the back foot, and as observed by Guardian political commentator Andrew Rawnsley : ” Even when the Tories have previously gained an advantage in the opinion polls or managed to beat Labour at midterm elections, no one seriously thought that a general election would produce a Conservative government. It was impossible to shut your eyes and imagine William Hague waving from the doorstep of Number 10. No one saw IDS or Michael Howard as Prime Minister. This is what has decisively changed. After his triumph in the local elections, it is now possible to shut your eyes and imagine a smiling David Cameron strolling along Downing Street. It is especially easy to envisage that spectacle if you are a terrified Labour MP representing one of the many marginals that have just voted Tory.”

With the confluence of left and right wing politics in Britain, voters are now scrutinising individual policies far more closely than was the case in decades past. Now, more than ever, they are concerned with a party’s stance on individual issues such as the NHS, tax and schooling, than what the Labour Party represents. When Tony Blair ushered New Labour into government in 1997, he borrowed the best bits of Margeret Thatcher in order to do so, thereby blurring the lines which divided right from left.

The Conservatives, in turn, banished into the polical wilderness then tried to reverse the process by proving that they were greener, kinder, and more metro-sexual than any Labour MP around. Indeed, listening to the shadow Chancellor while following the local elections, I was amazed to hear him confirm that it would be a while after taking office before the Tories would even consider any tax cuts. He, of course, blamed Labour for emptying the treasury, but said that even though his natural instincts would be to cut tax rates, circumstances did not allow for it.

Party role-reversing or mere electioneering?

In the present political climate it’s merely an astute assumption that voters are angry with the government about the current economic state of Great Britain and are, if the local election results are anything to go by, warning Gordon Brown and Labour to shape up or ship out.

American politics, like that of Great Britain, has seen a blurring of the lines between what are traditional Republican and Democrat policies. The intervention in Iraq, previously a primarily Republican approach, was endorsed by Democrats and Republicans post 9/11. Issues like abortion and gay rights, which traditionally find a home among the Democrats are increasingly obtaining Republican support as well.

We were all, by way of an example, shocked to see the righter–than–right evangelical Pat Robertson endorsing Rudy Giulliani, who supports gay and abortion policies, as the Republican candidate for president.

As in Britain, American politicians are no longer as married to party principles as they once were. With the Internet and its instant polls demarcating voter trends like never before, politicians are learning to gauge what is popular among the people at any given time — and bend accordingly.

This in turn has led their voters to examine their candidate’s stance on individual issues rather than what the party represented. Barack Obama refers to an age of post partisan politics, and judging from his broad appeal he has an inate understanding of how best to adapt to it.

How much damage Obama versus Clinton is doing to the Democrats’ chances of winning the presidency, time alone will tell. There is however a growing concern among the party faithful that it might be handing the election to McCain with super–delegates being called on to signal their intent and end the damage.

Once that is achieved we will be left with the main event, the showdown between the Democrat so nominated and the Republican’s John McCain — the divide between left and right, such as it is, immediately being thrust into sharp focus.

As in Britain, the credit crunch, struggling economy and the price of oil and food are going to play a major part in the way that voters judge their candidates. This subject always to another 9/11 or global catastrophe not intervening prior to the main election.

As things now stand, the economy, for a number of major reasons including but not limited to inter alia Iraq, Afghanistan and the credit crunch, is under immense pressure. The candidates’ proposed method of dealing with it of paramount importance to the voters.

In their report on McCain, Robert Gordon and James Kvaal of The American Prospect suggest : “Over the course of his campaign, McCain has consistently chosen granting tax breaks for industry and wealthy donors over tackling the problem of pet tax benefits. He proposes cutting the corporate tax rate from 35% to 25%, costing $100 billion a year, but fails to eliminate a single corporate tax break. A 25 % rate would be below the average rate of other industrialized countries, and the lowest among G–7 countries by a significant margin.”

And in addition : “For individuals, McCain proposes repealing the Alternative Minimum Tax (AMT), the parallel tax system that was intended to prevent tax sheltering but now threatens millions of middle-class families with higher taxes and more complexity. Millions of taxpayers are required to calculate their taxes under two systems — the regular tax code and the AMT — and pay the higher sum. Because the AMT is not indexed for inflation, it threatens more middle–class families every year.”

Like Gordon Brown, John McCain could well run into a major voter backlash if, as appears to be the case, he releases the pressure from the corporates at the expense of middle–America. The fact that the economy is in this position was during the Republican watch will not be lost on them. Neither will the fact that it is going to be a case of the richer benefitting at the expense of the poorer.

Recently we saw American outrage at the record subsidies being claimed by oil companies who were simultaneouly declaring record profits. This at a time when Joe motorist is being hammered where it hurts — at the pump.

Once the Obama versus Clinton furore calms down, attention will turn to McCain and these policies as well as other issues like his own version of the Reverend Wright, namely the Reverend John Hagee, who has some very “interesting” views :

McCain’s salvation will then lie between the Democrats having slung so much dirt that neither is adjudged electable, another 9/11 or a miracle.

Who knows — we might well be seeing some very interesting global events leading up to the final vote.

Anything but Austrians in cellars please!