Obama: You know, when you think about it, the Buffett Rule is really more of a “Reagan Rule”
posted at 8:35 pm on April 11, 2012 by Allahpundit
Three days, three presidential speeches on this ridiculous gimmick. I can’t take much more, but there may be light at the end of the tunnel: O seems sluggish here, a sign that he’s tired and apt to give it a rest tomorrow or that he’s grown as bored with this subject as the rest of us. Sweet relief either way.
If you read this post, though, then you know instantly what he’s up to. If the goal is to frame Romney as a wingnut gone wild, then why stop at comparing him to Barry Goldwater? Why not claim that he and the rest of the GOP are actually far to the right of Ronald Reagan himself? And who cares if you have to take Reagan out of context to do it? Philip Klein:
If you translate Obama’s words, what he’s really saying is that he wants people to keep less of their hard-earned money so that additional money will be available for him to spend on welfare state programs and more Solyndras.
Obama’s failure to acknowledge this distinction was hammered home in the same speech, when he suggested renaming the Buffett Rule the “Reagan Rule.” His remarks followed up on a video clip posted by the liberal group ThinkProgress in which Reagan, in a 1985 speech on the tax code, told a story about an executive paying a lower tax rate than his secretary.
Yet Reagan told the story as part of a larger pitch for tax reform. Unlike Obama, Reagan was interested in targeting loopholes so that he could lower rates, to allow people to keep more of their own money.
“Lower, flatter tax rates will give Americans more confidence in the future,” Reagan said in the speech referenced by Obama. “It’ll mean if you work overtime or get a raise or a promotion or if you have a small business and are able to turn a profit, more of that extra income will end up where it belongs — in your wallets, not in Uncle Sam’s pockets.”
Needless to say, O’s not trying to close loopholes for the rich as a revenue offset to lower, flatter rates. He’s closing loopholes as a prelude to letting the Bush tax cuts on the rich expire, which is itself a prelude to letting the Bush tax cuts on the middle class expire once he and his party work up the nerve to have a talk with the public about what’s required to pay for a modern entitlement state. In fact, if it’s loopholes you’re worried about, raising rates is one of the worst ways to go about closing them. As the Journal notes, once lobbyists go to work on Congress, the Buffett Rule will become the Buffett Rule plus dozens of specific exemptions:
The Buffett tax would only make loopholes more valuable. The White House has already carved out one exception to its own Buffett rule: charitable donations. So a billionaire could avoid the 30% effective tax rate by giving away millions of dollars—say, the way Mitt Romney so generously does…
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?
The only investment and hiring the Buffett rule is likely to spur will be outside the United States—in China, Germany, India, and other competitors with much more investment-friendly tax regimes.
Bad economics, but luckily economics aren’t the point. The point is reelection, which is why this is coming up for a vote in the Senate that’ll surely fail but which will hand the Democrats a few more days of talking about rich people like Mitt Romney robbing you blind. Mind-bogglingly ironic exit quotation: “If you don’t have a record to run on, then … you make a big election about small things.”