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Obama and Carter Define ‘Wealthy’

April 24, 2010

Raising taxes is a thorny issue.

President Barrack Obama has struggled to keep his pledge not to raise taxes on individuals making less $200,000 per year, or families making less than $250,000.

The President has consistently said that he only wants the ‘wealthy’ to pay more in taxes, not the middle-class. His problem is defining what income levels constitute someone as being ““wealthy”.

He is not the first President to struggle over the issue of defining “who is rich”.

The Obama pledge not to raise taxes on lower income people is reminiscent of the 1976 presidential campaign of Democrat candidate Jimmy Carter. He too, had a hard time explaining which taxpayers are “wealthy” – and which are not.

In the case of Carter, it all started in Boston during the Massachusetts Democrat presidential primary. When answering a reporter’s question about tax reform, Carter said that eliminating the income tax deduction for home mortgages, “would be among those I would like to do away with.”

At the time, Carter did not get the opportunity to go into detail about his tax reform proposals, and was only able to say that he felt the current tax system (in 1976) was a disgrace.

Carter’s primary  challengers jumped all over the statement, pointing out that eliminating the home mortgage deduction would cost American homeowners over $6 billion, and charged him with being “fuzzy” on the issues, a label that stuck for the rest of the campaign.

Later, Carter’s wife Rosalynn got into the act, reporting that she was being asked about the candidate’s statement on home mortgage deductions; everywhere she went on the campaign trail.

Mrs. Carter knew that it was difficult in a campaign to go into much detail on tax reform. She told her husband, “just be brief”.  Say, “I’m not going to raise your taxes’ and explain that no tax reform proposal of his would cost them more money,” Mrs. Carter advised.

Carter finally got his chance to explain his tax reform position in detail some months later when he sat down with an Associated Press reporter during the fall campaign against President Jerry Ford.

Martin Schram, in Running for President, chronicles the exchange between the AP reporter and Carter.

“The overall effect would be to shift a substantial increase toward those who have the higher incomes and reduce the income tax on the lower-income and middle-income taxpayers,” Carter told the Associated Press.

When the AP reporter asked, “in dollar figures”, what exactly did Carter have in mind, the candidate replied,  “I would take the mean or median level of income and anything above that would be higher and anything below that would be lower.”

The reporter persisted, pointing out that the medium income in 1976 was $12,000 per year, saying, “somebody earning $15,000 a year is not what people commonly think of as rich?”

To which Carter replied, “I understand that. I can’t answer that question because I haven’t gone into it. I don’t know how to write the tax code in specific terms. It is just not possible to do that on the campaign trail. But I am committed to do it …… As far as telling you specifically what the tax code would be, there is no way I can do that.”

The questioner summed up, asking Carter, “You are saying that you would like voters to make you President and you are not able to say what the impact might be of this very major change you are talking about. How would you respond to that?”

Carter said, “It hasn’t created a problem for me as far as I have been able to detect.”

His response hit the national wires within minutes , and the national debate began as to what income levels constituted someone as being “rich”,  and what income levels qualified someone as being “low-income”.

This exchange may have been the start of a long running political debate that continues today.

(Robb can be reached at