2012 Tuesday: With Buffett Rule, Obama ignores economics and leans on ‘fairness’
A lot of commentary about Barack Obama’s re-election campaign focuses on what’s different from 2008. But there’s one clear way in which it’s exactly the same.
In 2008, when ABC’s Charles Gibson asked Obama during a debate why he favored raising the capital-gains tax rate when the evidence suggests doing so would only reduce government revenues, Obama answered, “Well, Charlie, what I’ve said is that I would look at raising the capital gains tax for purposes of fairness.” (Amazingly, except to those who have noticed Obama’s tendency to try to have things both ways, he went on to talk about the need to spend more money on health care and education — without disputing Gibson’s premise that raising capital-gains tax rates would instead lower revenues.)
Now, in discussing the so-called Buffett Rule, which would require Americans making at least $1 million in a year to pay at least 30 percent of their income in federal taxes, we’re back to the argument of fairness, economic and fiscal logic be damned.
Obama described the Buffett Rule during his State of the Union speech as part of a “sense of shared responsibility. That’s how we’ll reduce our deficit.” Well, maybe if by “that” he meant, “The Buffett Rule and about 200 other things”: The White House’s own study of the rule’s fiscal impact puts it at less than $5 billion a year during the next decade. The projected deficit for this fiscal year is more than 220 times as much. Heck, the deficit last month alone was almost 40 times as much. To save the same amount of money on the other side of the ledger, Obama and Congress would have to cut just 0.13 percent of this year’s federal budget. That’s how insignificant $5 billion a year is in Washington.
Thus, the Obama campaign is back to playing the fairness angle. Here’s campaign manager Jim Messina on Monday: “The Buffett rule will help make our system reflect our values as all Americans play by the same rules, do their fair share and get a shot at success.”
Now, it is the opposite of true to say instituting a special minimum tax rate for a certain group of people amounts to ensuring “all Americans play by the same rules.” But more to the point, Team Obama seems to be abandoning the idea of dealing with Washington’s actual problems of deficits and debt, and instead wants the general-election conversation to be about what’s “fair.” As defined by them.
In any case, the outrage about “unfairness” is based on anecdotal evidence — Buffett’s allegedly lower tax rate than his secretary — belied by the statistics. (I say “allegedly” because, when people began wondering how much money Buffett’s secretary would have to make in order to pay a higher tax rate than him, Buffett became suddenly shy about airing her tax information.) The data demonstrate not only that the current tax code is plenty progressive already, but that the average effective tax rate for people making more than $1 million is already greater than 30 percent.
So, we have a president who wants to spend valuable election-season time talking about a policy that:
a) would amount to tenths of a percentage point of the federal deficit; and
b) purports to address a “problem” that covers a subset of a subset of the population; but
c) doesn’t actually address the “problem”; all while
d) distracting from the larger problem of our out-of-control federal budget.
Ah, but it also e) brings attention to the wealth of Obama’s likely GOP opponent, Mitt Romney. And that’s the only truly relevant factor here. The Buffett Rule is a club for Obama to swing at Romney, nothing more.
Anyone who falls for it, thinking it will lead to one iota of improvement for their own lives, will deserve what they get. Or don’t get, as the case may be.
– By Kyle Wingfield
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109 comments Add your comment
Gordon
April 10th, 2012
2:18 pm
Tiberius,
What does the world look like now, with MASSIVE debt? Reagan made the case of peace through strength, but the didn’t pay for it. Bush made the case of going into Iraq, but he never paid for it. Obama is making the case for more government, but he isn’t paying for it. You have to pay for the things you want. We’ve reached the point where we CAN’T pay for the things the government wants at this point.
Tiberius - Your lightning rod of hate!
April 10th, 2012
2:19 pm
AP – “Santorum suspending his campaign.”
Took him long enough to realize the Crusade was going nowhere.
leslie johnson
April 10th, 2012
2:19 pm
WAKE UP PEOPLE
Obama’s Re-Election: A Stake in the Heart of the American Spirit
By Lloyd Marcus
…Frankly, I cannot relate to those who are eager for Obama, “King of the Trifling,” to reign in his new American kingdom, in which government harvests the crops of risk-takers to be redistributed equally to the masses. Obama’s re-election campaign is targeted to stupid dumb-down voters, to products of liberal indoctrinated education, making them clueless regarding the tremendous cost and value of freedom. Consequently, Obama voters will eagerly surrender freedom, which is their God-given birthright, for a “free” crust of bread or a bowl of soup.
http://www.americanthinker.com/2012/04/obamas_re-election_a_stake_in_the_heart_of_the_american_spirit.html#ixzz1rf3otVgN
Wade Hampton
April 10th, 2012
2:20 pm
“Anyone who falls for it, thinking it will lead to one iota of improvement for their own lives, will deserve what they get. Or don’t get, as the case may be.”
.
Ditto for the goobers who vote for the Mitt “lessor of two evils,hold your nose,North-east Libtard, friend of Kennedy, John Kerry Jr., Mittons” Romney.
.
You’ll get what you deserve.
Wade Hampton
April 10th, 2012
2:20 pm
I forgot ……….”gun grabber” Romney.
Gordon
April 10th, 2012
2:21 pm
gm,
The irony is that the Americans that Obama claims to want to help will be the ones hurt the most when this spending orgy blows up in our face. He wants dependence and votes. You are naive to think otherwise.
Now with Ten Percent More Flavor
April 10th, 2012
2:21 pm
we can also wipe out several trillion right away by writing off intra-government debt…… in other words the money the general revenues owes the ss mis-trust fund can just be written off
we can go straight to pay as you go
I say put it to a vote. As the people receiving Social Security and Medicare how much they really need that pittance. It’s not like it’s that much money. Then we can eliminate the payroll tax and take that burden off the wealthiest too because they shouldn’t have to pay that tax. It’s not fair.
Now with Ten Percent More Flavor
April 10th, 2012
2:23 pm
Better yet, let us eliminate all taxes and not bring them back until the debt is paid off.
HIPPOCRIT
April 10th, 2012
2:24 pm
SS is simple………they know how much for a year they are to pay out and know how much to take in
for decades they were taking in surpluses and spending it in the general revenues
it needs to go to a straight pay as you go…….no accounting trickery
Gordon
April 10th, 2012
2:26 pm
Hippocrit@2:17,
That accomplishes nothing. Part of the government will be $X richer, another part will be $X poorer. Nothing will have changed.
Now with Ten Percent More Flavor
April 10th, 2012
2:26 pm
“I wish they weren’t called ‘Bush Tax Cuts’” – G.W.
Gordon
April 10th, 2012
2:27 pm
Hippocrit,
There are now 3 workers for every SS beneficiary. How do you think that is going to work?
Kyle Wingfield
April 10th, 2012
2:28 pm
Ok, 10%, now tell everyone what Bush said right after that.
Now with Ten Percent More Flavor
April 10th, 2012
2:30 pm
Right after you, Kyle, tell us how Paul Ryan’s plan will pay down the debt.
Tiberius - Your lightning rod of hate!
April 10th, 2012
2:31 pm
I don’t disagree, Gordon. But there is more to spending than just “He did it, too”.
There is context behind everything, and this is one of the main things the Tea Partiers just don’t get. There will be times when you have to spend more, depending on national security issues. You cannot crash entire social programs already in place to pay for a war; you have to either raise taxes to pay for it or you have to go temporarily into debt and pay it back later. It’s the second part that subsequent Congresses and President’s don’t get.
Kyle Wingfield
April 10th, 2012
2:33 pm
“I wish they weren’t called the Bush tax cuts,” he said. “If they’re called some other body’s tax cuts, they’re probably less likely to be raised.”
HIPPOCRIT
April 10th, 2012
2:35 pm
GORDON
its accounting trickery
all it is doing is taking tax money from current federal income tax revenues and transfering them to the ss trust fund (the iou bonds)……… its a money transfer……… therefore the money that we are currently paying from general revenues will be halted
and both parties KNOW what to do with SS spending……… means test receipients, increase the retirement age and adjust the payroll tax to current inflationary levels, make COLA’s in line with real inflation, and more
its not rocket science
but the IOU’s are tricks
its like getting a cash advance off a credit card
Tiberius - Your lightning rod of hate!
April 10th, 2012
2:35 pm
“Right after you, Kyle, tell us how Paul Ryan’s plan will pay down the debt.”
It won’t troll, not for another 27-30 years. Of course, if he DID propose something that would pay down the debt in less time than that, you be all over him saying he was throwing granny off the cli – oops! – too late for that.
griftdrift
April 10th, 2012
2:38 pm
“The “47% of people don’t pay [any] taxes” line is used either by conservatives who misspeak or don’t know what they’re talking about, or liberals who want to highlight misspoken or ill-informed conservatives.”
Kyle,
Please note how many people in this thread are chiming in that they are part of the “57″.
Love,
Your favorite “liberal”
Kyle Wingfield
April 10th, 2012
2:39 pm
grift: For all I know, you’re one of the misspoken conservatives…
gm
April 10th, 2012
2:39 pm
Gordon
He wants dependence and votes. You are naive to think
Dependence on what? saving Americans from being thrown out in the streets, helping college kids stay in school so we can compete against the world, when will you people on the right understand we are in the 21st century and the world is moving forward not backwards?
griftdrift
April 10th, 2012
2:40 pm
Then I am far from alone. I hear it daily.
Gordon
April 10th, 2012
2:42 pm
Hippocrit,
I don’t disagree with you. Stop the fake “trust fund”. But that actually solves nothing. There will be a huge revenue shortfall in Social Security that must be made up in the budget one way or another. You originally stated money could be saved. It can’t.
Tiberius - Your lightning rod of hate!
April 10th, 2012
2:42 pm
Since when is it the government’s job to prop up housing prices or tuition, gm?
Why can’t people go it on their own?
HDB
April 10th, 2012
2:43 pm
Too many people are decrying the government’s spending….but during an economic downturn, name me one entity that can RAPIDLY inject capital into the economic system when the private markets won’t?
This level of governmental spending, granted being unsustainable, is necessary in order to clean up the mess that the previous Administration left behind. Economics state that governments spend more in an economic downturn…and spend less in an economic upturn. With the number of jobs having been offshored by private industry, the government is the only entity that can adequately address the national need.
The real issue is this: Why wasn’t the national spending a major concern when the nation was BUSHwhacked?? Why wasn’t there a tax INCREASE to finance the war effort (as has been done in every war effort save this one!)??
Gordon
April 10th, 2012
2:43 pm
gm,
Dependence on the government. He is bankrupting us, and we won’t be able to help anyone. The poor will be the first ones cut out. Wake up.
leslie johnson
April 10th, 2012
2:44 pm
FOR CONSIDERATION
Obama’s Re-Election: A Stake in the Heart of the American Spirit
By Lloyd Marcus
…Frankly, I cannot relate to those who are eager for Obama, “King of the Trifling,” to reign in his new American kingdom, in which government harvests the crops of risk-takers to be redistributed equally to the masses. Obama’s re-election campaign is targeted to hypnotized voters, to products of liberal indoctrinated education, making them clueless regarding the tremendous cost and value of freedom. Consequently, Obama voters will eagerly surrender freedom, which is their God-given birthright, for a “free” crust of bread or a bowl of soup.
http://www.americanthinker.com/2012/04/obamas_re-election_a_stake_in_the_heart_of_the_american_spirit.html#ixzz1rf3otVgN
Kyle Wingfield
April 10th, 2012
2:45 pm
grift: And like I said: Those people are wrong.
Tiberius - Your lightning rod of hate!
April 10th, 2012
2:46 pm
“but during an economic downturn, name me one entity that can RAPIDLY inject capital into the economic system when the private markets won’t? ‘
It’s always easier to spend someone else’s money, HDB.
The question is, why should they? When did it become the role of government to interfere with the normal rise and fall of economic activity?
“The real issue is this: Why wasn’t the national spending a major concern when the nation was BUSHwhacked??”
Another deflection.
HIPPOCRIT
April 10th, 2012
2:48 pm
Gordon
There is a shortfall because both parties passed a PAYROLL TAX CUT of 2 or 3% for over a year now………….as i stated there are actions that both parties KNOW they can make to get SS in line…….. they just don’t want to do them because its POLITICAL SUICIDE……….. its MEDICARE that will be the problem………… SS can be brought to sustainable …… its a closed end quantifiable payout…… MEDICARE is an open-ended
Fundamental Decency is a Concept that is Dying in the Republican Party
April 10th, 2012
2:51 pm
@Jm
April 10th, 2012
12:23 pm
Aaamen. It’s also real bad policy, as discussed at Bloomberg.
I believe capital gains and wage tax rates should be equalized, but the stupid buffett rule is not the way to do it.
************************************************************************************
The Buffett Rule is a “sense of shared responsibility”.
Republicans are willing to lie, distort, obfuscate, fabricate and manufacture
fake evidence to bring down a political opponent.
@@
April 10th, 2012
2:55 pm
There’s nothing fair about FORCING people to spread their money around.
Fundamental Decency is a Concept that is Dying in the Republican Party
April 10th, 2012
2:57 pm
@leslie johnson
April 10th, 2012
2:44 pm
FOR CONSIDERATION
Obama’s Re-Election: A Stake in the Heart of the American Spirit
By Lloyd Marcus
…Frankly, I cannot relate to those who are eager for Obama, “King of the Trifling,” to reign in his new American kingdom, in which government harvests the crops of risk-takers to be redistributed equally to the masses. Obama’s re-election campaign is targeted to hypnotized voters, to products of liberal indoctrinated education, making them clueless regarding the tremendous cost and value of freedom. Consequently, Obama voters will eagerly surrender freedom, which is their God-given birthright, for a “free” crust of bread or a bowl of soup.
*****************************************************************************************
That type of consideration you can keep to yourself.
When will you people realize that all of that ridiculous NON-SENSE ain’t working.
We, the supporters of Obama AIN’T falling for that kind of NON-SENSE.
Try again.
Gordon
April 10th, 2012
2:57 pm
hippocrit,
The SS problem is more managable, but it is FAR greater than the 2 or 3 percent cut of recent years. The extra revenue from the payroll tax has been spent, and from this time forward revenues are not sufficient to pay costs. Either means testing (which is wrong), or adjusting the retirement age up is necessary at this point. SS was originally meant to keep people from being destitute in their final years. Now it is used as retirement income. The life expectancy has risen while the age of retirement has not.
You are right that Medicare in its present form is hopeless.
AngryRedMarsWoman
April 10th, 2012
2:58 pm
A “sense of shared responsibility”?????
I do not make $1million…far from it. Screwed again by the AMT, this year my family will pay federal taxes at a rate of 27.6% of our taxable income…24.5% of gross. Georgia is another 5.8%. $85k in state and federal income taxes. I am not crying – I know I am blessed to have this income (as if I don’t work my tail off for it, but I digress)….I am just sick of being told that I don’t pay my fair share. Could anyone seriously say that I am not “sharing the responsiblity”? Feels like I am sharing for a whole bunch of folks who aren’t asked/expected to share in the responsibility. pffttt
Fundamental Decency is a Concept that is Dying in the Republican Party
April 10th, 2012
3:00 pm
@ – @@
April 10th, 2012
2:55 pm
There’s nothing fair about FORCING people to spread their money around
**********************************************************************************************
No one is holding a gun to anyone’s head trying to force them to spread their
money around.
The last time I checked my checking account, savings account, 401k, IRA, anniity…
the money wass STILL THEIR.
Tiberius - Your lightning rod of hate!
April 10th, 2012
3:01 pm
1960 – John F. Kennedy, the first Catholic President
2008 – Barack Obama, the first black President
2012 – Mitt Romney, the first Mormon President
America has come far.
Fundamental Decency is a Concept that is Dying in the Republican Party
April 10th, 2012
3:01 pm
CORRECTION
The last time I checked my checking account, savings account, 401k, IRA, annuity…
the money was STILL THEIR.
Tiberius - Your lightning rod of hate!
April 10th, 2012
3:02 pm
“No one is holding a gun to anyone’s head trying to force them to spread their money around.”
Try telling that to the IRS, Trash.
Fundamental Decency is a Concept that is Dying in the Republican Party
April 10th, 2012
3:02 pm
CORRECTION #2
the money was STILL THERE.
SBinF
April 10th, 2012
3:04 pm
Kyle, I have no idea if the statistic you posted is correct or not….but my point stands. Allow the tax cuts to expire, we can sort everything else out later.
HIPPOCRIT
April 10th, 2012
3:04 pm
gordan you are right that is why as a nation we need have a “constitutional convention” and spend time clarifying and defining options to SS and MEDICARE and then coming to a bipartisan consesus to move forward……….. at this point the can has been kicked down the road time and time again until at one point it only becomes massive cuts in benefits and massive tax hikes ONLY………..
HDB
April 10th, 2012
3:07 pm
Tiberius – Your lightning rod of hate!
April 10th, 2012
2:46 pm
“The question is, why should they? When did it become the role of government to interfere with the normal rise and fall of economic activity?”
A total collapse of the world’s economic system is NOT a normality in the sphere of economic activity! This was also a point of national security!! The intersection of financial applications (banking, insurance, government) forced the government to act to prevent a repeat of a DEPRESSION!!! With Corporate America dependent upon an active economic system, failure was not an option…and to clean up this mess, it’s going to take an increased level of spending so that the nation can recover. This will be a time consuming process…….
“The real issue is this: Why wasn’t the national spending a major concern when the nation was BUSHwhacked??”
“Another deflection.”
No deflection — a serious question!! NO one complained at what the government was spending when Bush was in office; the Tea Party did not exist until Obama came into office!! Those that were silent under Bush decided to have a voice when Obama came into office…….and the level of animus towards Obama speaks volumes!!!
Now with Ten Percent More Flavor
April 10th, 2012
3:08 pm
If we were to call the recent payroll tax cut the Obama tax cut, then it wouldn’t get raised. Is that what you’re saying, Kyle.
Fundamental Decency is a Concept that is Dying in the Republican Party
April 10th, 2012
3:11 pm
@Tiberius – Your lightning rod of hate!
April 10th, 2012
3:02 pm
“No one is holding a gun to anyone’s head trying to force them to spread their money around.”
Try telling that to the IRS, Trash.
*******************************************************
I think in these lines that Jesus is showing how the kings of world show favoritism but how the appropriate thing to do is not exempt anyone but so show them equal treatment and expectations.
In Matthew 17:24-27 we learn that Jesus did indeed pay taxes:
After Jesus and his disciples arrived in Capernaum, the collectors of the two-drachma tax came to Peter and asked, “Doesn’t your teacher pay the temple tax?”
“Yes, he does,” he replied.
When Peter came into the house, Jesus was the first to speak. “What do you think, Simon?” he asked. “From whom do the kings of the earth collect duty and taxes—from their own sons or from others?”
“From others,” Peter answered.
“Then the sons are exempt,” Jesus said to him. “But so that we may not offend them, go to the lake and throw out your line. Take the first fish you catch; open its mouth and you will find a four-drachma coin.
Take it and give it to them for my tax and yours.”
Now with Ten Percent More Flavor
April 10th, 2012
3:11 pm
If Bush did not intend for his tax cuts to be eliminated, then he should have made sure that was what his legislation the he signed stated.
Kyle Wingfield
April 10th, 2012
3:13 pm
New post upstairs on the Santorum exit.
Zedd
April 10th, 2012
3:13 pm
I’m 42 and have been told all along that I’ll need upwards of a million in my 401k/IRA to be able to retire. Will that ever happen? No, I live basically paycheck to paycheck, single income family for the last 8 years. But if I were able and more fiscally responsible, I would contribute more. What will this Buffet rule does to those of us who want to retire before we’re 70-75?
Now with Ten Percent More Flavor
April 10th, 2012
3:14 pm
Bush and the GOP exhibited true cowardice in 2001 and 2003 by passing temporary tax cuts when they knew full well at the time that they wanted them to become permanent tax cuts at someone else’s political expense.
ODD OWL
April 10th, 2012
3:33 pm
The ODDOWL tax the rich plan… A top federal income tax rate of 50%… A capitalist gain tax rate of 50%… A 40% corporate tax rate… A 20% tax rate on small businesses… A 40% inheritance tax rate… Impose Social security payroll tax and medicare tax on all earned income… Every dollar earned should be taxed… The ODDOWL tax plan for the rich will pay off the debt and eliminate the deficit in five years… Share the wealth, TAX THE RICH, pay down the debt…