Lieberman’s Wallet Politics

Times staff writer

Seeking to stand apart in a crowded field of Democratic presidential hopefuls, Sen. Joe Lieberman of Connecticut on Monday called for a tax code overhaul that would offer economic relief for the middle class but increase taxes for wealthy Americans and corporations.

“The idea is simple,” Lieberman told about 200 supporters in a park alongside the Merrimack River here.

“Make those who are well off, and corporations, pay their fair share, and do what we responsibly can to relieve the squeeze on the middle class with new, lower taxes.”

All the Democratic presidential candidates have proposed repealing at least part of the tax cuts pushed into law by President Bush -- those reductions that benefit the wealthiest.


But Lieberman would go a step further -- under his plan, the wealthy would pay more taxes than they did before the tax cuts were passed.

Lieberman said wealthy Americans had received a “get-out-of-sacrifice free” card from the Bush administration.

To remedy that, he said he would increase the tax rate for the two top income brackets. He also would impose a limited 5% surtax on higher-income individuals and families.

“Families that make more than $200,000 [a year] can do a little to help America,” he declared.


Additionally, Lieberman would lower the two income rates that apply to the middle class. Under his plan, the rates would decrease for individuals making less than about $70,000 a year and families making less than about $115,000 annually.

None of the other major Democratic candidates has proposed such a cut. And two of them, Rep. Richard A. Gephardt of Missouri and former Vermont Gov. Howard Dean, have proposed repealing all of Bush’s tax cuts, including those applying to the middle class. Lieberman and several of the other Democratic candidates have opposed that idea, saying it amounts to a tax increase.

On Monday, Lieberman said: “Some have talked in this campaign about rolling back all of the recent tax cuts; that would hurt the middle class. Others have said they will keep some but not others. But those are all just plans ... without a dime in tax benefits going to the middle class.”

He said that under his plan, a married couple earning $50,000 annually would save up to $1,000.

He also would eliminate some corporate subsidies.

“No other Democratic candidate has called for tax code reform on the scale that Sen. Lieberman has,” said his spokesman, Jano Cabrera.

Lieberman billed his economic package as “a fresh start for America.” But it also represented an effort to jump-start his presidential candidacy.

He began his campaign with high name recognition, stemming from his vice presidential candidacy in the 2000 election. But his support for the war in Iraq and his centrist positions on a variety of domestic issues have put him at odds with many Democratic stalwarts.


“He has been gently drifting down [in the polls] for the last several months,” said Andy Smith, a political science professor at the University of New Hampshire. He “needs something to invigorate” his campaign.

But a plan that includes tax increases is risky for any Democrat, says Linda Fowler, director of the Nelson A. Rockefeller Center at Dartmouth College.

“No matter what a candidate says, the voters think it’s going to cost them,” she said.

Ed Gillespie, chairman of the Republican National Committee, quickly attacked Lieberman’s plan.

“Americans understand that a tax increase is a tax increase is a tax increase,” he said. “Raising taxes won’t create jobs. In fact, it will make job creation harder.”

Even as he unveiled his tax plan, Lieberman lashed out at Bush on several fronts. He blasted the administration for what he said were failed energy policies, a health-care crisis and schools that “are desperate for help.”

He said the Bush environmental policy could best be described as “no tree left behind.”

Lieberman made no direct reference to any of his eight rivals for the Democratic presidential nomination. Instead, he repeatedly talked about something he said was lacking in the current political arena.


“The central issue in this election is integrity,” Lieberman said. “Integrity is on the ballot next fall. And that is a battle I can win.”

Lieberman’s speech kicked off a five-day campaign tour that will also take him to South Carolina, Oklahoma, Florida and Michigan.

Iowa -- site of the first crucial contest among the Democrats on Jan. 19 -- is notably absent from the itinerary. Lieberman’s campaign has devoted few resources to the state, and he is not expected to do well in its caucuses.

Lieberman has campaigned extensively in New Hampshire, which conducts its primary on Jan. 28, but polls also show him lagging behind in that state.

His campaign seems to be pinning its hopes on a strong showing in several states with primaries on Feb. 3 -- including South Carolina and Oklahoma.

Lieberman began his day in his home state of Connecticut and traveled to New Hampshire in a campaign van known as the “Winneba-Joe.” Two busloads of supporters accompanied him from Connecticut.

Among those making the trip was Lieberman’s childhood rabbi, Joe Ehrenkranz. He argued that the senator’s centrist positions would make him the strongest Democratic candidate in the 2004 election.

“He has that center aisle and that is just what the people want,” Ehrenkranz said. “The nation does not want to move all the way to the left.”

Brandishing a “Liberals for Lieberman” banner, Gary Sullivan said he drove from Boston to hear Monday’s speech.

“The knock on this guy is that he is too conservative,” Sullivan said. “But for some of us, who are for what we consider liberal values, we don’t think he is.”