This is real. This is alarming. This is cause for great concern.
What is the response from our president? Is he listening? Does he care about this report? Will he follow their advice and carefully lead us away from this "fiscal cliff?"
Given his silence today, I guess we can assume that he's just hoping we aren't paying attention.
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| Image from Politico.com |
If Obama were to accept the CBO's recommendation and extend the Bush-era tax cuts...again...does his campaign even have a message?
After all, the president's entire reelection campaign has been about branding the wealthy as "out-of-touch." And his 2nd term agenda is hinging on the hope of raising taxes on the wealthy to get them to pay their "fair share."
What happens to his stump speeches if he can't vilify the rich?
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Obama is trying to rally his base with heroic imagery that his Robin Hood-esq plans will simply take from the rich to feed the poor and then use the leftovers to cut the deficit. He loves to create the imagery that the rich are somehow robbing from the poor.
This all sounds beautiful and heroic, but it is absolutely not true.
The president's plan is to implement a 4.6% tax rate increase on the wealthy. This marginal rate increase applies to only 2% of the population. Yet this is his bold plan for America's fiscal crisis.
As Charles Krauthammer of the Washington Post wrote, "Obama's plan to tax the wealthy would only cut the deficit from $1.2 trillion to $1.12 trillion. It's a joke."
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| Image from CNNmoney.com |
James Witherspoon of TheGaltFiles.com wrote a fascinating piece about the myths surrounding the "Fair Share" debate and taxing the wealthy. Using statistics from the IRS Statistics of Income Bulletin, Witherspoon points out that the "top ten percent of earners in this country (the wealthy) already pay more than 70% of the nation's taxes.
So, is our president's "fairness" message really about fairness?
Will the president tell his base that in 2011, 46% of the population did not even pay federal income tax?
Is it really "fair" or logistic to place the burden of our stagnant growth, crumbling economy, astronomical debt and dozens of nearly bankrupt government programs on 2% of the population? Especially when the numbers show that a marginal increase on these individuals will only scratch the surface of our financial crisis?
The president doesn't want to take the time to educate his voters on these facts. The narrative that the "wealthy are villains" is much more effective on the stump.
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The president is running an ad here in Colorado. The ad talks about Mitt Romney's tax rate and then ends by saying, "Mitt Romney probably paid a lower tax rate than you."
This ad is completely misleading and distorts the truth.
Would Obama's ad be as effective if he took some time to educate the public on the difference between income tax and dividend tax? Would his ad be as effective if he mentioned that dividends are actually taxed at a rate closer to 40%? Would his ad be as effective if he said, "Mitt Romney paid 40% in taxes and 11% in charitable donations. The bulk of you listening paid significantly less than Mitt Romney and actually the majority of you actually paid nothing."
The answer is of course not.
The president doesn't take the time to educate the public because he would much rather distort the reality that Mitt Romney's income is somehow taxed at a more preferential rate than everyone else's.
This allows him to play up the notion that the rich are robbing from the poor and he is just a lowly steward on our behalf.
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This CBO report today should change the conversation. It should force the president to change his narrative. Will it?
Probably not, because accepting the CBOs recommendation to extend tax cuts might help our country avoid the fiscal cliff, but it doesn't help the president's reelection bid.
I can't help but ask, Mr. President, will you do what is right for the country or simply do what is right for your campaign?
I think it is time for a real conversation about our real fiscal crisis.
Romney/Ryan 2012
I agree that the wealthy can and should invest where they want. Of course, that misses that major point in the argument of how the U.S. economy is financed. It is financed by a combination of private investment and tax dollars, like it or not on either side of the argument. It is an interesting and little discussed fact, at least according the data that is available from Bain Capital, that Bain Capital and Mitt Romney "created" jobs when individual tax rates were higher than now. We are stuck in an argument about whether or not taxes should be increased, but the question is are taxes sufficient to pay for the costs of the economy that private investment either cannot or will not pay. It is possible that the economy is suffering because too much wealth has been extracted through lower tax rates and that wealth has not been respent into the economy because it is stuck in the accumulated wealth of the very wealthy and is no longer in circulation within the U.S. economy. The U.S. economy was healthy during recent times of higher taxes and and there is little evidence, including Mr. Romney's business history with Bain Capital, that lower taxes produced economic gains from the majority of U.S taxpayers.
ReplyDeleteI appreciate your original post and your willingness to put your thoughts on the line. I hope that you will also consider mine and perhaps understand that both sides have lost their way in the grab for more money.
I also think it needs to be stated clearly and succinctly that Mitt Romney did not create the tax code. It might be unfair to some but that is what the tax code provides. A few years ago I read a study about people self reporting "cheating" on their taxes. The study concluded (and sorry, I do not have a source or date or anything that would validate this) that based on the findings, the majority of Americans cheat at least a little on their taxes so that they can save money. Looking back on that study now I wonder what is more outrageous -taking advantage of the tax code and its options available to Mitt Romney, or being dishonest in our tax reporting? Taxes suck. I don't care what party you belong to, in the end they suck. I find it far more troubling that millions of americans are likely not being honest in their tax reporting and those same Americans are branding Mitt Romney's honest payment as shameful.
ReplyDeleteAs to Hawkeye's comment -the question is actually two-fold. You point out only one part of the question, that of whether taxes are sufficient to pay for the costs of the economy. The other part of the question is what parts of the economy are in trouble because of careless government spending, careless government borrowing and other factors? Your comment of "private investment either cannot or will not pay" makes it appear that it is private investment firms that are responsible for careless government spending and government deficit creation. It isn't their responsibility. It isn't their responsibility any more than it is the "A" student's responsibility to ensure that the "F" student passes.