|If You Believe This, Then, You Are Easily Fooled|
Tuesday, January 31, 2012
Let Me Break This Tax Thing Down For You One Last Time
It’s a sly bit of linguistic manipulation. Who could possibly be opposed to asking others to pay their “fair share”? Besides me? In theory, everyone supports “fairness.” I do, certainly. So when President Obama used his State of the Union address to trumpet “fairness,” the Democrats seized on the term, heralding it as their new public-relations concept of choice.
When it comes to taxes, a definition of fairness suited to liberty is the demand that each person pay a reasonable amount of money into the system to defend our Constitutional rights. Because this is what our system is meant to do, this is a reasonable request. The proper purpose of government is to safeguard individual rights. People can be reasonably required to surrender some of their money to protect them.
Our rights certainly aren’t being properly safeguarded. But this is not what Obama means when he insists that wealthy people are not paying their “fair share.”
To begin with, Obama’s trite definition of the rich — “millionaires and billionaires” — is a fantastic lie. The federal income tax system is divided into tiers, the top one capped off at $250,000 gross earnings. Someone making $10,000,000 annually pays the same federal income tax rate as someone earning $275,000. Collectively, the top ten percent of earners pay over 70% of federal taxes.
Aside from the simple contention that this money justly belongs to the people and not the government, there is a basic economic argument against raising these people’s taxes: these people are very often small business owners, and so much of their money is being funneled right back into the business. This enables growth and creates jobs for millions of Americans. Every extra dollar seized by the federal government is a dollar not going toward creating jobs that represent real prosperity. The CEOs of Fortune 500 companies might be able to “handle” a tax increase — but for a small business owner, that could mean tens of thousands of dollars that make the difference between hiring a new employee or expanding into a new market. To whom is that fair, exactly?
In their public-relations offensive, the president has proposed a manipulative idea called the “Buffett Rule,” which, as the president would have it, means that we shouldn’t have a tax system in which billionaires don’t pay as much into the system as their secretaries. Michelle Obama even invited Warren Buffett’s secretary as her special guest at the State of the Union — a slot typically reserved for national heroes.
Warren Buffett’s secretary makes hundreds of thousands of dollars every year, so she seems like an odd choice for an object of left-wing pity. I’m certain that most conservatives would be glad to support a tax cut for people like her — “the rich,” in left-wing parlance — but, of course, Obama being Obama, the object of this game is not to make Buffett’s secretary richer, but to make Warren Buffett poorer.
There is, in fact, a reason that Buffett pays a lower rate of taxes than his secretary: he makes money through capital gains, the rate of which is 15%. His secretary makes her money through personal income, which is capped off at 35%. By conflating two different taxes, Obama deliberately creates a false impression that millionaires have rigged the system to pay fewer taxes, when in fact anyone at all making money through capital gains will pay less.
The capital gains tax should not be hiked. It should be abolished: there should be every incentive to invest in American businesses and promote private-sector growth. This investment does far more for Americans seeking work than any dollar chewed away at by bureaucracy and special interests. Anyone choosing to risk his money in the market should be entitled to keep every cent of his earnings.
But Obama, going back to his leftist roots, is actually motivated by envy and resentment, not justice and fairness. Previously, he has admitted that he would still support an increase in the capital gains tax even if it would lead to less revenue for the federal government, this statement should ring home for you, he's not concerned with debt reduction, he only wants to level the playing field and totally cripple the American economy. This, in the name of “fairness.” His game is up: he doesn’t want to help make the poor richer. He wants to make the rich poorer.