In a Friday speech in Roanoke, Virginia, President Obama attacked the idea that the wealthy get that way on their own. From the Real Clear Politics partial transcript:
[L]ook, if you’ve been successful, you didn’t get there on your own. You didn’t get there on your own. I’m always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something — there are a whole bunch of hardworking people out there. (Applause.)
If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business — you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.
Jazz Shaw tagged this part of the speech in a post on Saturday, and noted that President Obama is taking this part of his speech almost directly from the mouth of Massachusetts Senate candidate Elizabeth Warren. Back in 2011 Warren famously said the following:
“You [wealthy people] moved your goods on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces the rest of us paid for.”
This is a fantastic campaign line. Or, rather, it should have been, but as Jazz pointed out it fell down around Warren’s ears. Perhaps the rhetoric couldn’t stand up against the facts, such as the following:
1. The wealthy already pay more taxes than everyone else, both as a percentage of total federal taxes collected and as a percentage of their own income. So unless Obama is seeing different facts than the rest of us, upper-income earners are definitely not getting a free ride, or even half of a free ride, on the backs of middle-class earners. So the “somebody” who “invested” in “publicly funded widget XYZ” is actually the wealthy person Obama is bashing.
2. Unless wealth was earned dishonestly, it belongs first and foremost to its earner. Otherwise, we no longer have a country of free people earning money and paying a small amount of it (or, rather, what should be a small amount, and would be if our federal government was the size the Constitution dictated it ought to be) to taxes. Instead, we have a nation of people who earn money first and foremost for government. Combined with the recent Supreme Court decision that forced contracts are now legal (my interpretation, at least, of the practical implication of the Court’s decision that the mandate is a tax), this attitude by the highest office-holder in the land is quite dangerous. Not new, of course — liberals have used this language at least as long as I’ve been around, which is an ancient nearly-27 years — but dangerous.
3. I’ve long argued with liberal friends and acquaintances that even if business owners (especially wealthy ones) don’t pay “enough” in taxes, their contributions to society through an expanded tax base, an expanded economic pie, providing income for employees and their families, providing employees with the opportunity to learn and use skills, etc. more than make up for any perceived lack of taxation. I have yet to convince any liberals of the validity of this argument, but hope springs eternal.
4. Tangentially-related, most of the social services and publicly-funded investments Obama is talking about aren’t even paid for by the people he is pandering to. In fact, the taxes covering those programs are largely paid for by the very people he’s bashing. As I wrote last week:
While almost all Americans do pay some sort of federal taxes – from taxes on cigarettes to payroll taxes…the 50% or so of taxpayers who don’t pay non-payroll income taxes benefit from federally-funded roads, education services, immigration control, the military and other federal services. Who, then, pays for these services? According to the Tax Foundation in an October 2011 report, “The top 5 percent earned 31.7 percent of the nation’s adjusted gross income, but paid approximately 58.7 percent of federal individual income taxes.” In short, most taxes for non-retirement social spending – the same social spending liberals are so keen on expanding – are being paid by those people liberals also say don’t pay enough in taxes – the top five percent, whose income was a relatively modest $154,643,000 in 2009, according to the Tax Foundation.
The facts stand on their own, and are more powerful than any rhetorical devices Obama or Warren can come up with — the wealthy pay their fair share, on average, and while the tax system is certainly deficient (it provides many well-connected rich Americans with special loopholes, and prevents 50% of workers from paying any non-payroll income taxes at all, to name but two flaws) it does not need higher rates while spending continues to grow unchecked and without proper oversight. Obama wants higher taxes? How about we cut spending by 20% or 30% as a trade-off or, better yet, simply eliminate loopholes and apply some of the extra tax revenue to deficit reduction and the rest to lower rates for everyone? Would that be the balanced approach he allegedly wants, and claimed to be for on Friday?