The details of the tax deal are fine — but what about its moral underpinnings for economic freedom?
As news came out Monday about the tax deal reached between President Obama and Senate Republican leaders, all eyes were on the details. Highlights of the deal include:
• Bush tax cuts extended for all tax brackets for two years.
• Unemployment benefits extended for 13 months.
• Estate “death” tax maximum rate lowered to 35% (down from 55% for 2011) with an exemption on the first $5 million (up from $1 million for 2011).
• Capital gains tax maximum rate remains 15%. (This is perhaps the most important aspect of the deal for financial markets.)
• AMT “patched” to avoid its hitting over 20 million additional households.
• 1 year reduction of Social Security “payroll tax” of 2%.
• Continuation of certain Obama “stimulus” bill taxes, including for college tuition and equipment purchase write-offs; also expanding the earned income tax credit.
It remains to be seen whether the current crop of House Democrats will go along with the deal. It also is possible that a Senator, maybe Bernie Sanders (I-VT) or Sherrod Brown (D-OH) will filibuster a bill to implement the deal, and there may not be 60 votes for cloture during the lame duck. So while there’s a deal, it’s not a “done deal.”
There will be plenty of time to analyze the economic and political impacts of the “compromise.” But one striking aspect of the debate is the utter lack of discussion of a political philosophy underlying anybody’s negotiating position. Where is the explanation of why tax cuts (or, more precisely, extension of the current tax rates) are not just good for the economy but are more moral (or, more precisely, less immoral) than accepting the Democrats’ desired policies?
On Monday, as Barack Obama offered his usual leftist pablum regarding his wish to raise taxes on those earning over $250,000 while suggesting willingness to give that up in return for Republican agreement on extending unemployment benefits, he demonstrated a world-turned-upside-down misunderstanding of the source of wealth and the proper role of government.
First, Obama said that continuing the current rates for the upper tax bracket is something the government “can’t afford right now.” Sadly, some large percentage of Americans including nearly all Democrats take that statement at face value without thinking about what he’s really saying: that money which high-earners earn is first the property of the government and only secondarily, and only if government feels generous, should be allowed to be kept by those who earned it.
Second, Obama implores Congress to extend unemployment benefits for people who have lost their jobs “through no fault of their own.” Again, many or most Americans will simply accept this statement at face value. And again, learning the lesson from Bastiat that we must consider “that which is unseen,” what do Obama’s words mean? They mean that because someone is suffering a hardship which is not “their own fault,” it is everyone else’s responsibility to give our money, or more precisely our children’s and grandchildren’s money, to that person.
The “no fault of their own” argument is the 21st century analogue of “to each according to his need”; and 99-week unemployment benefits paid for by deficits and the 1% of taxpayers who pay 40% of income taxes is the analogue of “from each according to his ability.” Obama’s argument is naked socialism.
It’s one thing for Republicans to take political victories where available. To be sure, even with Republicans agreeing to Obama’s desired unemployment insurance extension, getting all the Bush tax cuts extended, not to mention the other tax cuts and extensions in the deal, will be a stunning victory during a lame duck session in which Democrats retain huge majorities in both houses of Congress.
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
Was the President done in by the economy, or by the politics of the economy?
H/T to National Review Online