Analyst: Obama plan isn't "socialism," it's traditional progressive taxation

ST. CHARLES, Mo. — "Make no mistake," Republican activist John Hancock told a John McCain rally in this St. Louis suburb, "this campaign is a referendum on socialism."

Republicans have been pounding that theme in recent days, even though Democratic presidential nominee Barack Obama hardly fits the classic definition of a socialist.

Critics point to Obama's plan to raise the top two tax rates on the wealthy as clear evidence of his socialist bent. However, Len Burman, the director of the nonpartisan Tax Policy Center, said that while Obama "would make the tax system more progressive overall, it would not be a radical shift."

It wouldn't qualify as socialism.

"The answer is clearly no, Senator Obama is not a socialist," said Paul Beck, a professor of political science at Ohio State University. "We've had a progressive tax system for some time, and both Republicans and Democrats have bought into it."

Socialism involves state ownership of the means of economic production and state-directed sharing of the wealth. America's democratic capitalist system is neither socialist nor pure free market; rather, it mixes the two, and it has at least since the progressive income tax was introduced 95 years ago. Under it, the wealthy pay higher income tax rates than those who are less fortunate do. It's a form of sharing the wealth.

Government intervenes in U.S. "free markets" all the time. The deduction that homeowners get for mortgage interest is one form, for it subsidizes housing. The government contracts that sustain the great U.S. weapons makers, such as Lockheed Martin and General Dynamics, are another.

For that matter, President Bush and a lot of other Republicans, including McCain, backed a massive federal government rescue of ailing financial institutions this fall, one that's committed well more than $1 trillion so far to "private" banks, even taking partial ownership of the nine biggest.

Socialism has proved more popular in Europe, including in Great Britain, France, and Italy. In the United States, the term traditionally has been closely associated with communism, and thus claiming the socialist mantle has been political poison. Since World War II and the Cold War, American political candidates who advocate pure socialism rarely have gotten very far. Most notably, Sen. Bernard Sanders of Vermont was first elected to Congress in 1990 as a socialist, and remains one.

The new round of socialism claims was triggered by Obama's comments last week to "Joe the Plumber" Wurzelbacher in Toledo, Ohio.

Wurzelbacher told Obama that he hoped someday to buy a plumbing business and asked, "Your new tax plan is going to tax me more, isn't it?"

Key Bush administration tax cuts are due to expire Jan. 1, 2011. Obama wants to end breaks for most individuals who earn more than $200,000 and families that make more than $250,000; McCain does not. Obama's position would restore the top rates to where they were under President Clinton, when the economy boomed.

"It's not that I want to punish your success," the Illinois senator told Wurzelbacher. "I just want to make sure that everybody who is behind you, that they've got a chance for success, too. My attitude is that if the economy's good for folks from the bottom up, it's gonna be good for everybody. ... I think when you spread the wealth around, it's good for everybody."

Republicans pounced, and haven't stopped.

"You see," McCain said in his radio address Saturday, "he believes in redistributing wealth, not in policies that help us all make more of it.

"Joe, in his plainspoken way, said this sounded a lot like socialism, and a lot of Americans are thinking along those same lines. In the best case, spreading the wealth around is a familiar idea from the American left."

It was Bush and McCain — who claimed a central role in the drama — who pushed a trillion-dollar government plan to save ailing financial institutions, however.

"If we're moving toward socialism," Beck said, "it's a bipartisan event."

One of the major challenges that the next president faces, former Federal Reserve Board Chairman and Obama backer Paul Volcker said Tuesday, is "how do we reprivatize institutions" that have been "socialized" by the Bush administration?

Many conservatives were uneasy about the bank bailout, but they argue that it's important to remember that "George Bush is not on the ballot," said Brent Littlefield of the American Conservative Union.

He pointed to Obama's tax ideas.

"It's a philosophical concept (Obama) has, and he made it clear when, unprompted, he talked about spreading the wealth around," Littlefield said.

Conservatives often charge that Democrats are engaging in "class warfare" when they want to raise tax rates on the rich — McCain and his running mate, Sarah Palin, have used the phrase against Obama — but they rarely find such fault when tax cuts benefit the wealthy class disproportionately.

For all that, the "socialist" charge against Obama sticks with some voters.

In Ohio, Sara Cannorozzi, who works for a Springfield promotional products business, explained that while her income is nowhere near the amount that would trigger a tax increase, she hopes it will be someday.

"Obama wants to talk about giving pieces of the pie to everyone, but he never wants to talk about growing the pie," she said. "I don't want to share my pie. If I earn it, I want to keep as much as I can."

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(McClatchy Newspapers correspondent Margaret Talev contributed to this report.)