A schoolteacher shouldn’t pay more tax than a hedge fund manager—and doesn’t

posted at 1:30 pm on September 20, 2011 by Howard Portnoy
[ Double Standards ]   

On Monday, President Obama attempted to energize his Democratic base by delivering an impassioned speech in the Rose Garden. The content—and even phraseology—of the speech may have incited déjà vu in listeners because it was a carbon copy of a speech he has given dozens of times before with no rebuilding.

John Podhoretz, who is either a masochist or a man endowed with infinite patience, takes the time to chronicle a number of the recycled phrases in a New York Post article that would be funny if it weren’t so sad. (An example is the line “This isn’t class warfare, this is math,” which, JPod notes, Obama said verbatim on September 8.)

The basic premise of the president’s speech is that every taxpayer should pay his fair share. I doubt there is a sentient being among us who wouldn’t agree with that notion. Some would even extend it to 51.6 million American tax filers, or 36%, who pay absolutely nothing into the system but still enjoy the same rights, privileges, and services as those of us who do.

But that segment of the population is not the one the president has in mind when he speaks of income equality. He means millionaires and billionaires (which—credit due—is a slight improvement over his previous definition of rich people, which meant couples jointly earning $250,000 or more). In making his case—that we should raise the top marginal rate to a point where the richest Americans end up contributing $1.5 trillion in new tax revenues—he argues that “middle-class families shouldn’t pay higher taxes than millionaires and billionaires.” He’s right: They shouldn’t. And with rare exception they don’t.

According to the Tax Policy Center, a Washington think tank, households making more than $1 million this year will pay an average of 29.1% of their income in federal taxes. By way of contrast, those making between $50,000 and $75,000 will pay 15% of their income in federal taxes, and those making between $40,000 and $50,000 will pay an average 12.5%.

On the night that Obama unveiled his jobs bill, he made the argument that “nothing in this proposed bill hasn’t been tried before or agreed to before by some or all members of the Republican Party.” Although in of itself that’s not a ringing endorsement for enacting a piece of legislation, his claim could be extended to his proposal to increase the highest marginal tax rate on income. It’s been done before, many times. In 1944 the top tier was raised all the way up to 94%. However, every time the highest marginal tax rate has been adjusted upward, the other four marginal rates have been adjusted as well. To do otherwise would be unfair. That seems a truism to everyone except the man who professes to champion fairness.

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