Good morning, suckers: President Obama is playing you.
If you work hard, play by the rules, save your money, create jobs, and make a success out of yourself, President Obama and the Democrat party will plunder everything you have worked so hard for, because in their view that is only fair.
That is the meaning of the policies President Obama is espousing as he campaigns for re-election around the country this week. As Mark Steyn has explained, there is no bill yet that the President is demanding Congress pass, it won’t create any jobs, and there is no money to pay for it. It is just a traveling road show, and we need to start to hold accountable our relatives, friends and neighbors who would fall for it, and thereby darkly threaten the entire future of America.
Campaigning for re-election on Monday, President Obama said,
Middle-class families shouldn’t pay higher tax rates than millionaires and billionaires. That’s pretty straightforward. It’s hard to argue against that. Warren Buffet’s secretary shouldn’t pay a higher tax rate than Warren Buffett. There is no justification for it. It is wrong that in the United States of America, a teacher or a nurse or a construction worker who earns $50,000 should pay higher tax rates than somebody pulling in $50 million. Anybody who says we can’t change the tax code to correct that…. They should have to defend that unfairness — explain why somebody who’s making $50 million a year in the financial markets should be paying 15 percent on their taxes, when a teacher making $50,000 a year is paying more than that — paying a higher rate. They ought to have to answer for it.
Let me educate you, Mr. President, even though I am quite certain you are not interested in hearing any answer that contradicts your committed religious beliefs. But the truth is that the unfairness you discuss is a fantasy. The facts are just the opposite.
Even before you were elected, Mr. Obama, under the tax policies adopted by President Reagan, House Speaker Newt Gingrich, and the much vilified President George W. Bush, official IRS data for 2007 showed that the top 1 percent of income earners paid more in federal income taxes than the bottom 95 percent combined! The top 1 percent of income earners that year earned 22 percent of income but paid 40.4 percent of total income taxes. When Reagan became President, the top 1 percent paid 17.4 percent of income taxes, as I note in my recent book, America’s Ticking Bankruptcy Bomb. As Jack Kemp used to say, if you want to soak the rich, cut tax rates. Moreover, the bottom 40 percent plus of income earners now pay no federal income tax on net as a group.
So if “the rich” are not paying their fair share, Mr. President, what would that fair share be? Based on these official facts, for you to run around the country telling America that we could have jobs and balance the budget and solve the debt crisis you are creating if the rich would just pay their fair share of taxes only demonstrates that you are not qualified to be President. Either you don’t understand the basics of America’s tax policies even after you have been President for three years, or you are engaged in calculated deception thinking your fairy tale will fool enough gullible people that you can be re-elected despite an economic record so bad that it is threatening to rival the Great Depression.
As the Wall Street Journal further explained yesterday, in 2008 official IRS data shows that taxpayers earning over $1 million paid an average federal income tax rate of 23.3 percent. Those earning between $500,000 and $1 million paid an average federal tax rate of 24.1 percent. As the Journal further elaborated, “that is more than twice the 8.9% average rate paid by those earning between $50,000 and $100,000, and more than three times the 7.2% average rate paid by those earning less than $50,000. The larger point is that the claim that CEOs are routinely paying lower rates than their secretaries is Omaha hokum.”
Actually it is a Warren Buffett scam. His company that made him rich, Berkshire Hathaway, itself is a sophisticated tax shelter. If tax rates are raised, that will only lead more of the wealthy to flee to investing in his company to avoid the abusive multiple taxation. The IRS claims that Buffett’s company owes a billion dollars in back taxes. If Buffett thinks the rich don’t pay their fair share, why is he fighting this? Why doesn’t he just pay his fair share as required under current law?
Buffett is just playing all of us like President Obama is. What a disgrace that our public debate has fallen this low, to this level of rank, manipulative dishonesty.
And the above doesn’t even count the corporate income tax. America suffers from virtually the highest corporate tax rate in the industrialized world, nearly 40 percent on average counting state corporate income taxes. Even Communist China has a 25 percent corporate rate. The average rate in the European Union, which is reputedly mostly socialist, is even less than that. In formerly socialist Canada, the corporate tax rate is 16.5 percent, slated under current law to fall to 15 percent next year. Compared to America, Canada has been booming since Obama was mistakenly elected.
The Obama/Buffett ruse arises just like any other magician’s trick. It focuses attention on just one tax rate paid on income arising from capital investment — the capital gains tax rate of 15 percent. The florid abusive rhetoric distracts from the multiple taxation of that income, which is actually taxed at least four separate times under our tax code. Capital investment income is taxed first by the above mentioned, abusive, internationally uncompetitive corporate income tax. If any is paid out as dividends, then it is taxed again by the individual income tax. If the value of the capital interest, say a share of stock, manages to increase in the Obama depression, then it is taxed again by the capital gains tax. If anything is left at death, then it is subject to taxation again by the death tax.
Moreover, a basic principle of our tax code is that any business expenses incurred to produce income are deductible in the year they are incurred. But not the expenses of capital investment. Those expenses can only be deducted over several years under depreciation rules, which is yet another form of discrimination and plunder of capital investment. Moreover, the money devoted to any capital investment has already been taxed when it was earned, so that is effectively still more taxation of the same income.
That is how the top 1 percent of income earners ends up paying more than the bottom 95 percent combined. And it is why the average tax rate paid by millionaires is three times the average rate paid by the middle class.
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Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
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