Barack Obama gave an interview to MTV and got challenged on his redistributionist tax policies. In answering, Obama called his increases “chump change” to those making over $250,000 a year — a characterization that should raise eyebrows (emphases mine):
Sway: Our next question is from Matt from Iowa: “If your desire is to spread the wealth around, what incentive is there for me to try to work hard? If I am only going to get more taken away from me, the more money I make, why wouldn’t I just slide into a life of relaxation and let rich people take care of me? And a lot of people are asking similar questions, and I wanted you to specify. What does this mean exactly?”
Obama: What is amazing to me is this whole notion that somehow everybody is just looking out for themselves. I mean, the fact is, we just talked about student loans. When young people who have the drive and the skill to go to college can’t afford to go to college, how do you think we pay for scholarships or loan programs? That money doesn’t grow on trees. It’s got to come from somewhere, and the attitude that I have is that, if we want to grow our economy, the way it grows is from the bottom up. You don’t just give tax breaks to millionaires and billionaires. What you do is make sure the tax code is fair. I want to give a tax cut to 95 percent of working Americans, but in order to pay for that, I’m going to take the tax rates back to what they were in the 1990s for people who are making more than a quarter of a million dollars a year. Now for people who are making more than a quarter of a million dollars a year, if they are paying 2 or 3 percent higher in taxes, the notion that they’re somehow going to stop working, or that this young man is going to not want to be successful, that just doesn’t make any sense. Back in the 1990s, we created more millionaires, more billionaires, because the economy was growing, everything was strong, at every income bracket, people were doing well. So this idea, that somehow everybody is just on their own and shouldn’t be concerned about other people who are coming up behind them, that’s the kind of attitude that I want to end when I am president.
Sway: Just out of curiosity, for those that are being taxed that are making more than $250,000 a year, how much difference would it be from how they are being taxed today?
Obama: Well, right now, they are getting taxed at 36 percent. Under Bill Clinton in the 1990s, they were being taxed at 39.6 percent. You are talking about a 3.6 percent difference, and for the average person who is making half a million, a million dollars, now people like you Sway, that’s chump change, that’s nothing. But it could make a big difference for that young person who is trying to figure out whether they can go to college or not, if we could give them more of a break or more scholarships or grants to go to college.
At $250,000, an additional 3.6% isn’t chump change. It’s an extra $9,000 that goes to the federal government on top of what they already take. That money could go to the college funds for his own children, or get invested in businesses that create jobs, or just get spent and create even more jobs for others in the community. Instead, it will go to Washington DC, get filtered through ever-growing bureaucracies, and perhaps a tenth of it will actually go to any purpose — if that.
I provided the entire answer to show that one doesn’t have to take Obama out of context to see the folly of his economics. Wealth does not grow “from the ground up”. It takes investment and risk by those who have capital in order to create the kind of private-sector jobs that promote economic strength and stability. Until now, our tax policies have recognized the value of risk-taking by taxing capital gains at a lower rate, in order to encourage people to invest money in something other than savings accounts. That is what allows the American economy to remain so resilient.
Instead, Obama thinks that we can penalize investment and still get people to take risks. Instead, they will simply put their capital where it is most safe and stop taking risks altogether. Businesses will not expand, and small businesses will not get created. Research and development will stop altogether. Without rewarding risk, risk will not get taken — and especially when government redirects capital away from private investment and sinks it into large bureaucracies instead.
Obama thinks $9,000 is “chump change”. I’d say someone’s certainly a chump.