Obama’s fairness doctrine a recipe for AMP (Assured Mass Poverty)
posted at 12:46 pm on January 29, 2012 by Howard Portnoy
In his populist lectures on income equality, Barack Obama has long tossed around terms that beg for clarification. Last July, when a battle raged over extending the debt ceiling, he said:
I do not want, and I will not accept, a deal in which I am … able to keep hundreds of thousands of dollars in additional income that I don’t need, while a parent out there who is struggling to figure out how to send their [sic] kid to college suddenly finds that they’ve [sic] got a couple thousand dollars less in grants or student loans. [Emphasis added]
In an article at The Freeman, editor Sheldon Richman remarked on some of the will-o’-the-wisp notions Obama used to pepper his State of the Union address on Tuesday. Highlighting the line “[Americans] understand that when I get tax breaks I don’t need and the country can’t afford, it either adds to the deficit,” Richman writes:
[W]hat’s need got to do with it? Does Obama really favor a tax system that leaves you only what you need—as determined by someone else? And look at that term “tax breaks.” If a burglar decides not to break into your house and take your things, have you gotten a break? Or have you simply kept what is yours? Is Obama really suggesting that how much of your income you retain should depend on what “the country” can afford? What does that even mean?
I think what is means is that, when all is said and done, the president prefers a level playing field above all else—and he isn’t especially concerned about how high that level happens to be. I maintain that, left to his devices, Obama would sooner preside over a country where everyone had little than a land of haves and have-nots.
Consider his unorthodox view of what constitutes wealth. For the first two years of his presidency, Obama hammered away repeatedly at the idea that any couple earning over $250,000 a year was “rich.” In fact, even though he has since reset his sights on punishing millionaires, he still seems to consider those earning $250,000 as wealthy. In the SOTU he said:
In fact, if you’re earning a million dollars a year, you shouldn’t get special tax subsidies or deductions. On the other hand, if you make under $250,000 a year, like 98 percent of American families, your taxes shouldn’t go up.
He failed to specify what he thinks should be the fate of a broad swath of the population—those earning less than $1 million but at least $250,000—but it’s not hard to imagine, given his distate for the well-to-do.
One of his favorite bullet points in his economic fairness pitch these days is increasing the tax on capital gains for the wealthiest Americans from its current rate of 15% to at least 30%. What he fails to acknowledge is that such an increase is already set to happen, and not just for millionaires. Roberton Williams of the Tax Policy Center notes that if the Bush tax cuts are permitted to expire and ObamaCare remains the law of the land, taxes associated with that legislation will drive the maximum tax rate on capital gains up to 25 percent by 2013. The Carleson Center for Public Policy notes that over the last 40 years, every time the capital gains tax rate has been increased, revenues have declined.
But it’s not just the rich (whoever they are) who will be affected by the increase. Despite an 11-point decline since 2007 in the percentage of Americans who invest in the stock market, a robust 54% are still investors. If they are forced to sell off securities, which is not hard to imagine in an economy in the throes of a slow and jobless recovery, they too will be hurt. But at least the pain will be shared equally.
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