Saturday, April 14, 2012

It’s All About The O

Empty prayer, empty mouths,
Combien reaction?
Empty prayer, empty mouths,
Talk about the passion.
—R.E.M., Talk About The Passion

Sorry for my extended dry spell.  I just discovered that my Second Amendment rights afford me a new way to bankrupt myself for fun, so candidly my spare time has been occupied with internet shopping.  That, and nothing in the news has really grabbed me lately.

That said . . .

I see the President is going to force us once again to deal with this nonsense about raising taxes on the so-called wealthy.  Doubling down on a theme he began last Fall, Obama has resurrected his call for implementation of the “Buffett Rule,” intended to cure some alleged inequity in the tax system.  Apparently the most pressing issue now facing the country is the unfairness of our taxes (actually I think I may agree with the President on this point, but in the reverse of what he’s claiming).

How does he continue to get away with pushing the lie that the tax system unfairly allows millionaires to pay less in taxes than the middle class?  They don’t, as I’ve demonstrated here, here, and here.  If you’re talking about taxing wages, the top marginal tax rate—the rate charged on the amount earned above a certain threshold—is 33%, while the marginal tax rate for the median income of about $50,000 is 25%.  If you’re talking about taxing capital gains, that’s taxing risk rewards, not labor compensation.  In other words, capital gains taxes impose a burden on money that's already at risk through investment; unlike wages, there is no guarantee of an income return at all.  More importantly, while the capital gains rate is 15%, that’s on top of the 35% tax imposed on the corporation in which the taxpayer invested his capital, meaning one who acquires his earnings through capital gains actually has his money taxed twice.  

The bottom line according to the IRS is that the average total tax liability—combined effective tax rate plus payroll and other taxes—is less than 7% for median wage earners, but it’s over 30% for the top earners.  There may be isolated exceptions, and I'll be the first to agree the tax code needs a gross overhaul.  But taken as a group, the wealthy in fact do not pay less in taxes than the middle class, whether in total dollars, or as a percentage of income.  They just don't, no matter how many times Obama or Warren Buffett say otherwise.

With the underlying premise itself a demonstrable lie, one has to wonder what it is the President thinks he’s accomplishing by continuing to push this, particularly when he and everyone else knows it has exactly zero chance of passing this Congress.  What dire national crisis is he trying to solve by taxing millionaires?  Clearly we have major problems in this country, so name your hot-button issue: is Obama’s “Buffett Rule” going to solve it?


Obama promised back in 2009 that his “stimulus” would prevent unemployment from rising above 8%.  When that failed and unemployment stagnated well above 9%, he repeatedly told us that he “will not rest until every American who wants one has a job.”  Well, today the official unemployment rate remains above 8%, and 12.7 million Americans are out of work (the real rate, once you include the underemployed and those who have simply given up, is 14.5%, or more like 22.5 million Americans). 

Is raising taxes on the wealthy going to give a single one of those Americans a job?  The answer, of course, is no.  Obama tells us that prosperity has never trickled down from the wealthy, but outward from the middle class; but where does he think those jobs that employ the middle class come from?  Some of the largest non-government U.S. employers include the likes of Wal-Mart (founded by Sam Walton), McDonald’s (built by Ray Kroc), General Electric (founded by Thomas Edison), and Ford Motor Company (Henry Ford).  Half of all non-government employees work for small businesses, the owners of which would be directly impacted by the “Buffett Rule.”   The middle class has jobs because somebody wealthier has hired them to work in their business.  Raising taxes on those people is only going to disincentivize investment in those businesses, which hurts job creation, not helps it.

Budget Deficits/Debt

The current budget deficit is over $1 trillion, a figure it has exceeded every year of this Administration.  The District’s debt is $15.5 trillion and climbing.  Clearly government and its spending habits are totally out of control, a fact to which the Administration is completely oblivious.  Obama submitted a budget this year that increased spending further, and was so bad that it failed in the House by a 414-0 vote.  Not even a single Democrat voted aye.  Not Nancy Pelosi.  Not Debbie Wasserman-Schultz.  Not Maxine Waters.  Not Henry Waxman.  Nobody.  One suspects even Obama himself may have signed the transmittal letter "present."

With spending this out of control, is raising Warren Buffett’s taxes going to reduce the deficit or debt?  Again, the answer is no.  As I’ve covered a number of times, you can tax the millionaires at 100%—take everything—and it wouldn’t fund the District’s spending for even three months.  Even taxing everyone making more than $200,000 a year at 100% would still leave you nearly $2 trillion short of covering current federal spending, much less touching the debt.  No, the “Buffett Rule” isn’t going to touch the deficit/debt problem.

Belligerent Iran & North Korea

Iran refuses to give up its nuclear program; it pinky-swears that it’s only for peaceful electrical generation and not for weapons, but won’t let anyone see it.  North Korea this week attempted to launch what amounted to an ICBM—they said it was for a weather satellite; I guess they don’t have cable and can’t get The Weather Channel—over the Administration's sternest possible finger-wagging, and will soon be conducting additional nuclear weapons testing.  I’m pretty sure nobody in Teheran or Pyongyang is sitting around saying if only Obama would raise Warren Buffett’s taxes, we’d be able to give up our nukes.

The truth is not only is the underlying premise that the rich pay less—or even less than their fair sharein taxes than everyone else pure fiction, but raising taxes even further does not move the ball one inch on any of the actual problems we currently face.  It doesn’t help us economically, fiscally, or defensively.  It doesn’t cure the apparent catastrophic crisis in women’s health.  It won't reduce your pain at the pump.  It won’t make Social Security solvent, save Medicare, or pull Solyndra out of bankruptcy. 

Why, at a time when there are real substantive issues, would the President devote so much time and energy flogging an idea that doesn’t have anything to do with any of those issues?  Let’s leave aside policy debate over how best to solve the problems we face.  Obama’s pushing of this “Buffett Rule” should demonstrate to anyone who’s paying attention (and hasn’t already drowned in the kool-aid) something very disturbing about his character wholly apart from partisan agendas:

He’s not interested in solving real problems.

Obama’s sole interest is in keeping himself in power, and to do that he's all about creating a pithy and convenient narrative he can use to posture his campaign as an “us vs. them” battle.  So rather than actually do the job he was hired to do, he’s spending his time—and your money—trying to divide and conquer with a meaningless and ultimately counter-productive message.  It makes for a good bumper sticker to stir up his Leftist base, but in the end the most it will do is benefit him, personally.  Our problems will remain.

It’s one thing to agree or disagree on matters of policy.  But it should really bother all of us when a President is more concerned with retaining power for power’s sake than he is with actually dealing with the concerns of the day.  This President likes the trappings of the officehob-nobbing with super-Hollywood types, taking his-and-her matching private 747s on exotic vacation jaunts, and plenty of golfbut he shirks the real responsibility of that office in favor of empty and deliberately divisive rhetoric.

Not everyone can carry the weight of the world.

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