Obama's tax agenda

Candidate Obama is spending his days flying around the country (at our expense) and shouting at crowds about "fairness" and the Buffett rule. The Wall Street Journal on that:

Forget Warren Buffett, or whatever other political prop the White House wants to use for its tax agenda. This week the Administration officially endorsed what in essence is the Obama Rule: Taxes must be high simply to spread the wealth, never mind the impact on the economy or government revenue. It's all about "fairness," baby.

This was long apparent to those fated to closely watch the 2008 campaign, but some voters might have missed the point amid the gauzy rhetoric about hope and change. Now we know without any doubt. White House aides made it official Tuesday in their on-the-record briefing on the new federal minimum tax that travels under the political alias known as the "Buffett rule."

The policy goal is to impose an effective minimum tax of 30% on the income of anyone who makes more than $1 million a year. When President Obama first proposed this new minimum tax he declared that the rule "could raise enough money" so that we "stabilize our debt and deficits for the next decade."

Then he added: "This is not politics; this is math." Well, remedial math maybe.

The Obama Treasury's own numbers confirm that the tax would raise at most $5 billion a year—or less than 0.5% of the $1.2 trillion fiscal 2012 budget deficit and over the next decade a mere 0.1% of the $45.43 trillion the federal government will spend. When asked about those revenue projections, White House aide Jason Furman backpedaled from Mr. Obama's rationale by explaining that the tax was never intended "to bring the deficit down and the debt under control."

Jimmie Bise on that:

So, according to the Mouth of Sauron, Jay Carney, neither the President nor anyone else in the administration suggested that the Buffett Rule would reduce the debt in either a “large” or “significant” measure.

Got that? Okay. Now let’s leap into that wonderful time machine known as the Internet and travel back about six months, to September of last year. Here is what the President said in a speech at a DNC event in California.

What I’ve said is this is a very simple principle that everybody should understand: Warren Buffett’s secretary shouldn’t pay a lower [sic] tax rate than Warren Buffett. A teacher making $50,000 a year, or a firefighter making $50,000 a year or $60,000, shouldn’t be paying a higher tax rate than somebody making $50 million a year. And that basic principle of fairness, if applied to our tax code, could raise enough money that not only do we pay for our jobs bill, but we also stabilize our debt and deficits for the next decade. And as I said when I made the announcement, this is not politics; this is math. (Laughter.) [Emphasis mine]

I’m no White House Spokesliar (my breath causes mirrors to fog up and I do not cause dogs to bark furiously), but I consider any plan that would “stabilize our debt and deficits”, which are slated to run at least a trillion dollars a year from now until the heat death of the universe under Barack Obama’s unanimously-rejected budget plan, a “large” and “significant” measure. It seems pretty obvious that Barack Obama intended for all of us to believe that this Buffett Rule was a bit of an economic wonder drug — not only would it reinstate “fairness” but it would also cure a great many financial woes.

That, also, was a lie.

The real point of the Buffett rule, according to the WSJ editorial:

The Buffett rule is really nothing more than a sneaky way for Mr. Obama to justify doubling the capital gains and dividend tax rate to 30% from 15% today. That's the real spread-the-wealth target. The problem is that this is a tax on capital that is needed for firms to grow and hire more workers. Mr. Obama says he wants an investment-led recovery, not one led by consumption, but how will investment be spurred by doubling the tax on it? 

From Peter Ferrara's must-read, Why Obama Hates Paul Ryan:

What [Obama] doesn't understand is that under our tax system the earnings from capital investment are taxed not once, but multiple times. First, by the corporate income tax, then again by the individual income tax through the tax on dividends, then if you sell the capital investment, through the capital gains tax, then when you die, by the death tax. When he complains that the rich are not paying their fair share, he is just looking at the rate on any one of these taxes, and not considering all of the others. So he wants to raise them all to what he considers the tax rate paid by the middle class.

As a result, he would double the top capital gains tax rate, double the dividend tax rate, increase the top two income tax rates by nearly 20 percent, and increase the death tax rate by 60 percent, while the corporate tax rate remains the highest in the industrialized world.

His tax increases would apply to the top 3 percent of taxpayers, singles making over $200,000 a year, and couples making over $250,000. He says the increases are needed for the rich to pay their "fair share." But as the Wall Street Journal noted on Feb. 14, those top 3 percent already pay more in federal income taxes than the bottom 97 percent combined!

Indeed, before President Obama was even elected, official IRS data shows that in 2007 the top 1 percent of income earners paid 40.4 percent of all federal income taxes, almost twice their share of income. That was already more than paid by the bottom 95 percent combined. The top 5 percent of income earners paid 60 percent of all federal income taxes. The top 10 percent paid 70 percent.

So if the rich are not paying their fair share, Mr. Obama, what would that fair share be? Obama's cheap rhetoric on this issue is again not even an honest, intelligent discussion of the issues.

The problem is that President Obama's simple-minded, community organizer ignorance of how the tax code works will end up hurting working people the most. Next year when all of those tax increases go into effect, and the multiple taxation of capital is multiplied by tax rate increases on everything, the result will be renewed, double-dip, recession. The capital flight from the U.S. will slash jobs and wages further, with the return of double-digit unemployment.

Moreover, the tax increases will not nearly raise the revenue expected. Indeed, with renewed recession revenues will decline rather than rise. Budget deficits and federal debt will soar further.

The Buffett rule also serves as a handy club with which to beat the Candidate-in-Chief's one-percenter opponent, all the while stirring up class envy, upon which Obama thrives. Divide and conquer is his modus operandi. Emily Miller:

President Obama flew Air Force One to Florida on Tuesday, bringing along the mobile White House entourage to call for a tax bill based on class envy. The Buffett rule is the highlight of his re-election routine, but the president should have saved our money by staying home. Lawmakers aren’t taking the bait.

“He can’t run on his record so he is coming down here to raise money - using taxpayers’ funds to do so - and again campaigning on ‘divide the American people,’ ” Rep. Mario Diaz-Balart, Florida Republican, told reporters on a conference call.

The “official event” on the president’s schedule was a 74-minute speech at Florida Atlantic University on the Buffett tax, which was sandwiched between three big fundraisers. (At the $10,000 per ticket fundraiser in tony Palm Beach, Mr. Obama tailored his remarks to the wealthy audience, never mentioning his idea to raise their taxes). Republican National Committee Chairman Reince Priebus said that it’s “lucky for him he added in a public event so now we can all take a part in paying for these fundraisers that he’s conducting around Florida.”

By Mr. Priebus’s count, this is the 20th speech in which Mr. Obama has promoted the tax-hike idea since January. The administration’s rationale for the Buffett tax alternates regularly from arithmetic to morality to budget needs. “What’s the better way to make our economy stronger?” asked Mr. Obama. “Do we give another $150,000 in tax breaks to every millionaire and billionaire in the country? Or should we make investments in education and research and health care and our veterans?” This is false posturing.

That's putting it politely. How deceptive was Obama's strident attack on Ryan's budget in his April 3rd AP speech? Via Peter Ferrara, egregiously so:

Hence Obama's shameful, transparently dishonest attack on Ryan's budget in the speech, which has only further backfired on Obama. Obama said that under Ryan's budget:

The year after next, nearly 10 million college students would see their financial aid cut by an average of more than $1,000 each. There would be 1,600 fewer medical grants. Research grants for things like Alzheimer's and cancer and AIDS. There would be 4,000 fewer scientific research grants, eliminating support for 48,000 researchers, students and teachers.

Investments in clean energy technology that are helping us reduce our dependence on foreign oil would be cut by nearly a fifth. [O]ver 200,000 children would lose their chance to get an early education in the Head Start program. Two million mothers and young children would be cut from a program that gives them access to healthy food.

There would be 4,500 fewer federal grants at the Department of Justice and the FBI to combat violent crime, financial crime, and secure our borders. Hundreds of national parks would be forced to close for part or all of the year. We wouldn't have the capacity to enforce the laws that protect the air we breathe, the water we drink, or the food that we eat.

Cuts to the FAA would likely result in more flight cancellations, delays and the complete elimination of air traffic control services in parts of the country. Over time, our weather forecasts would become less accurate because we wouldn't be able to afford to launch new satellites and that means governors and mayors would have to wait longer to order evacuations in the event of a hurricane.

But the speech itself reveals where Obama got these fairy tales, because he didn't get them from Ryan's budget. The above litany of woe is preceded in the speech by this line: "I want to actually go through what it would mean for our country if these cuts were to be spread out evenly," and this caveat: "If this budget becomes law, and the cuts were evenly applied starting in 2014…"

In other words, Obama's speech itself tells us this is all made up. Obama's minions calculated the percentage of total spending cuts in Ryan's budget, and then applied that same percentage to every politically sensitive line item in the budget. But as Ryan has said publicly, that is not what his budget does. The long overdue spending cuts are outlined in hundreds of pages on the House Budget Committee website.

Truth is, at best, incidental to the Obama campaign, and in most cases a frightening liability. With no record of accomplishments to run on, this is what he's got. Peter Ferrara makes the case that Paul Ryan is Obama's natural enemy. Romney would be wise to beg Ryan to join him on the ticket.

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