#My2K bug: How Obama proved conservatives right on taxes
I’d like to thank President Obama for taking the time last week to explain why conservatives have been right about taxes all along.
Last Wednesday, Obama took his perpetual campaign to Twitter, encouraging supporters to send messages about how a middle-class tax increase would affect them. Never mind that no one is proposing a middle-class tax increase; the difference between Democrats and Republicans concerns raising taxes on couples earning more than $250,000 per year.
Even that difference concerns not whether they should go up, but by how much and which means: GOP leaders have offered to raise taxes on high earners by $800 billion over 10 years by limiting how many deductions tax filers can take. Obama wants to raise $1.6 trillion over 10 years by limiting deductions and raising tax rates.
Along the way, however, Obama conceded three of the main points the right long has made about raising taxes. And it only took him five of the 140 characters allowed for a tweet to do it.
How did he do that? Saying the average middle-class family would see its taxes rise by $2,200 if all tax rates were to revert to Clinton-era levels, Obama asked his tweeps to list the things they wouldn’t be able to buy without that money. Which he called, including the hashtag symbol frequently used on Twitter, #My2K.
“My” $2,000? Was the president really acknowledging that what we earn is our money?
More to the point, was he acknowledging — as conservatives always say — that taxpayers may have better uses for their money than the government does? Otherwise, shouldn’t he have no objection to the government taking #My2K?
If the answer to all three questions is “yes,” why should it be any different for higher-income earners?
The implication of #My2K, made explicitly by Obama at other times during the present tax debate, is that raising taxes is bad for the economy. That’s traditional conservative point about tax hikes No. 2. But, again, he only gets this one half-right.
Obama seems to believe consumption alone matters to the economy — and that consumption, or at least economically meaningful consumption, stops at $250,000 per family per year. After that point, if I’m following his logic correctly, consumption must not really matter.
What explains this? Is it some notion that dollars become less valuable to the economy as they accumulate with one person? If so, maybe we could call it the Theory of Obamativity.
Does he believe rich people just swim around in the money they earn that exceeds $250,000, Scrooge McDuck-style?
Or does he believe that when they invest, rather than spend, that has no positive impact on the economy? He sure does speak glowingly of government’s “investments.”
Strangely enough, his comment two years ago when extending all tax rates was that it was “the right thing to do for the economy.” At the time he said that, the economy had grown at an average of 2.8 percent over the previous four quarters. Today, the average for the past four quarters is down to 2.5 percent.
Finally, with #My2K, Obama seems to acknowledge the middle-class tax rates Washington is talking about extending came about as the “Bush tax cuts” — not the “Bush tax cutsfortherich,” as Obama and other Democrats are accustomed to calling them.
In fact, if Obama believes the larger economic impact of the cuts lies with the rates for the middle class, doesn’t that confirm, as conservatives have long pointed out, that the vast majority of the money stays with the middle class? (That’s “stays with,” not “goes to.” Don’t forget the “my” in #My2K.)
Now that the president agrees with us about these basic tax principles, perhaps it isn’t asking too much for him to acknowledge one thing more.
The only way federal tax revenues are going to return to their long-term historical average — as they did in the years before the 2008 financial crisis — and begin to pay for all the spending Obama wants is for the economy to get back to growing rapidly. And you won’t find many economists who believe tax increases alone will do that.
– By Kyle Wingfield
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199 comments Add your comment
John
December 6th, 2012
8:31 am
From the same 2006 piece in the New York Times.
The main reason is a big spike in corporate tax receipts, which have nearly tripled since 2003, as well as what appears to be a big increase in individual taxes on stock market profits and executive bonuses.
On Friday, the Congressional Budget Office reported that corporate tax receipts for the nine months ending in June hit $250 billion — nearly 26 percent higher than the same time last year — and that overall revenues were $206 billion higher than at this point in 2005.
Congressional analysts say the surprise windfall could shrink the deficit this year to $300 billion, from $318 billion in 2005 and an all-time high of $412 billion in 2004.
curious
December 6th, 2012
8:33 am
“The wealthy don’t spend their money? Are you crazy?”
Sorry. Intended to say the rich don’t spend all their money like the poor and many in the middle class.
A reason the unemployment rate was so low was the amount of consumer spending resulting from the money generated by the housing bubble. Now we are either underwater or barely even. Banks aren’t lending.
Bob Loblaw
December 6th, 2012
8:35 am
This is the worst-written column to appear on this site. Ever. Mind-numbingly bad.
John
December 6th, 2012
8:38 am
And from Thomas Sowell:
The bottom line is that Barack Obama’s blaming increased budget deficits on the Bush tax cuts is demonstrably false. What caused the decreasing budget deficits after the Bush tax cuts to suddenly reverse and start increasing was the mortgage crisis. The deficit increased in 2008, followed by a huge increase in 2009.
So it is sheer hogwash that “tax cuts for the rich” caused the government to lose tax revenues. The government gained tax revenues, not lost them. Moreover, “the rich” paid a larger amount of taxes, and a larger share of all taxes, after the tax rates were cut.
Obama intentionally lies to his hogs.
John
December 6th, 2012
8:40 am
Forgot the link.
http://townhall.com/columnists/thomassowell/2012/12/05/creators_oped/page/full/
JohnnyReb
December 6th, 2012
8:41 am
Regretably, most citizens don’t understand tax rates, revenue, GDP, etc. They do believe legacy media and pop culture lies. And, Obama suspends truth almost everytime he speaks regardless of the subject. How do you know he is lying? His lips are moving.
Bush’s tax cuts resulted in a very low debt to GDP ratio until the housing bubble burst, but you won’t hear the Left speak of that.
There is mounds of evidence that tax cuts increase revenues and that raising taxes does the opposite, but the Left like a rabid dog wants the rich to hurt so they must have the tax increase. Never mind that could result in fewer jobs. They don’t have to worry. They can always get unemployment forever, then go on disability, get food stamps, rent assistance, and a free cell phone. Why work?
willie lynch
December 6th, 2012
8:41 am
What’s wrong with those making over 250K paying a higher tax rate on the earnings above that? If tax rates are at the lowest they’ve ever been and we managed to make it through the 40’s, 50’s and 60’s with higher tax rates on high income earners what’s the problem with this current batch of high earners paying at a higher rate?
If we can ask people to sacrifice their lives and lose limbs for this country why can’t those who have prospered the most sacrifice mere money? It’s the American way.
carlosgvv
December 6th, 2012
8:43 am
Barry
You’re right. I blame them ALL.
UIC
December 6th, 2012
8:51 am
Kyle…. First, and it is a small point, your comment “Before the 2008 financial crisis,” it was actually in December 2007. I’m sure you researched the date, but then decided, “if I use 2008, maybe the readers will think, gosh, President Obama was elected in 2008 (forget that his term begins on January 20 of the year following election) so this must be his fault. I’d hope your college professors would be disappointed. Also, if the statistics show it started in December 2007, you need to go back several years to see the beginning of the fall. In a $13T economy, bad decisions today do not manifest themselves tomorrow.
Where to begin on the rest of the article….. “taxpayers may have better uses for their money than the government does?” No one will disagree, but maybe we need a plan to pay for the debt we already have. You may remember the ill-fated debacle in Iraq that cost $1T; that amount is and will continue to increase throughout our lifetime. Why? Well, in addition to the 4,000+ service members that were killed, 36,000+ came home with varying degrees of injury. Some will be on gov’t assistance programs for the remainder of their lives. I’m sure as a good “conservative” (whatever that means), you have no issue with that expenditure. We also have the Wall Street meltdown that led to the worst economic downturn since the Great Depression. If you’re looking for a date as to when this happened, here’s a clue, Mr. Capitalism (champion of survival of the fittest) used gov’t money to bailout the backbone of the capitalist system, (how quickly Mr. Capitalist found his inner socialist.)
Why would President Obama advocate just increasing the tax rates on the top two tax brackets? Here’s a clue…90% of all income growth over the last decade has been concentrated over a very small segment of the population. Yes, I know, they’ve earned it. If you believe that, you haven’t spent much time investigating corporate America.
What else, “…. to pay for all the spending Obama wants is for the economy to get back to growing rapidly. And you won’t find many economists who believe tax increases alone will do that.” You also won’t find too many economists who believe the income divide trajectory we’ve been on for the last decade is a sustainable path.
mike
December 6th, 2012
8:51 am
“A mall in Maine has sacked Santa Claus after children and parents complained he was rude, grumpy and wouldn’t even let one child sit on his lap.
Officials at the Maine Mall in South Portland say they’re looking for a jollier Santa and hope to have him in place Thursday.”
http://www.ajc.com/ap/ap/strange/maine-mall-sacks-santa-after-rudeness-complaints/nTN8f/
Now that’s my kind of Santa!
Elections Have Consequences
December 6th, 2012
8:58 am
To those making the case for higher taxes, try this analogy: Your 14 tear old comes to you and says, “I need $20”. You have already given him $20 last week, the week before that, the week before that – etc. Do you:
A) Smile and fork over the money
B) Ask “What do you need it for?”
I would choose B.
There’s been no explanation as to why higher taxes are actually needed, just supplying the campaign weary the rhetoric of “those who aren’t paying their fair share”. If the money went to something concrete, reducing the debt or addressing the deficit, fine. It won’t. Obama’s proposal includes 200B in stimulus in the form of additional tax cuts and spending, without addressing either of these issues.
And the President admitted that the tax increases aren’t even needed-as much as he understands fiscal policy:
http://townhall.com/tipsheet/guybenson/2012/12/05/obama_in_2011_we_can_achieve_12_trillion_in_revenues_without_raising_tax_rates
This is political, plain and simple. It’s not about truly addressing the fiscal problems in this country.
willie lynch
December 6th, 2012
9:02 am
Why were the costs of the Iraq and Afghanistan wars never included in Bush’s budget numbers?
Lil' Barry Bailout - OBAMAPHONE!!!
December 6th, 2012
9:02 am
What’s wrong with those making over 250K paying a higher tax rate on the earnings above that?
——–
They already do.
Lil' Barry Bailout - OBAMAPHONE!!!
December 6th, 2012
9:04 am
What’s wrong with asking the federal Government to make do with 20% of GDP like they did in the 50s, 60s, 70s, 80s, 90s?
Independent voter
December 6th, 2012
9:06 am
what would have happened if Jimmy Carter ( 2nd term ) had beaten Ronald Reagan in 1970 ???? we are about to find out…. our economy became the world leader under capitalism… socialism does not work !!!!!
Independent voter
December 6th, 2012
9:08 am
yes we have to limit SPENDING.. if you send it up to D.C. they will spend all of it and ask for more next year.. just like your Kid and his allowance
willie lynch
December 6th, 2012
9:12 am
Lil’ Barry Bailout – OBAMAPHONE!!!
December 6th, 2012
9:02 am
Tax rate. Stick with us now.
Cutty
December 6th, 2012
9:13 am
Since Kyle cares so much about reducing taxes, maybe he can start here at home w the ad valorem tax. It’s my birthday, and the last thing I want is to drop $350 on a car tag less than two weeks before Christmas.
Maybe of Obama used fee instead of tax, Kyle may agree w him along w the rest of the GOP. They seem to be ok w increased fees here at home.
JamVet
December 6th, 2012
9:13 am
Why do you neocons hate evil Middle Class working families so much?
Butch
December 6th, 2012
9:15 am
Lynnie Gal – “There’s a great deal of difference between giving a person making $50K an extra $2K and a person making $800K an extra $50K.”
Giving? I assume you really meant “letting them keep what they earned”…….
John
December 6th, 2012
9:15 am
if you send it up to D.C. they will spend all of it and ask for more next year
Word!
Debasing the value of money by creating more of it is nothing new or esoteric. Irresponsible governments have done this, not just for centuries, but for thousands of years.
It is a way to take people’s wealth from them without having to openly raise taxes. Inflation is the most universal tax of all.
All the pretty talk about how tax rates will be raised only on “the rich” hides the ugly fact that the poorest people in the country will see the value of their money decline, just like everybody else, and at the same rate as everybody else, when the government creates more money and spends it.–Thomas Sowell
willie lynch
December 6th, 2012
9:15 am
Lil’ Barry Bailout – OBAMAPHONE!!!
December 6th, 2012
9:04 am
They will get back to it. So let’s get those high income earner tax rates up to the levels of the years you noted.
independent thinker
December 6th, 2012
9:16 am
More Obama bashing and right wing talking points from General Norquist to the troops via Kyle to satisfy Norquist’s wealthy patrons who have gotten fatter and richer in the last twelve years than ever before.
Kyle try dealing with some reality about taxes and entitlements and quit stirring up the passions of the looney right wing kooks who use this column to spew anti-Obama venom and their delusions everyday. Three examples from this month’s AARP newsletter would make an intellectual discussion of what Obama has already passed possible now that all the lies of the GOP to get those two wannabees ected have failed miserably:
1. Tax deduction for unreimbursed medical expenses goes up from 7.5% of AGI to 10% effective Jan.1 This means more revenue from most taxpayers and grerater individual out of pocket payments if the tax payer has no insurance or limited insurance- Is this good or bad according to You and Grover?
2. Medicare tax goes up from 1.75 to 2.43% for income earners over $200,000 a year undr Obamacare. Is this good or bad according to you and Grover? Is this entitlement reform according to the GOP and Mr. Boenerhead?
3. Bush’s Medicare reelection give away to the elderly- free and unfunded Part D drugs (which your hero Paul Ryan voted for)had no big pharma concessions. Obama care now requires as of January 1 that gemeric drugs be discounted by big pharma 52% and generics 21%. If that results in part of the $716 billion dollars along with cuts in Bush’s Medicare Advantage program (privately run) is that money a Medicare savings and entitlement reform or will the talking heads at the GOP and Mr. Ryan still claim Obama is stealing $716 billion dollars from the elederly including Paul Ryan’s Momma???
See it all just talking points until you get to the real numbers and facts. I thought what newspapers were for.
2.
Richard Judy
December 6th, 2012
9:16 am
Where Obama comes up short as a politician is his inability to fathom a desire from voters to see a Reagan/Clinton propensity to compromise in ways that benefit the country. That is why we constantly hear nostalgia for both of those ex-presidents. Obama has admitted in the past that he is aware that raising tax rates on high income people will likely result in lower revenues. He still wants to raise the rates to create “fairness,” a godawful lame view. We should tax wealthy people in such a way as to create more wealthy people who will — in the aggregate — contribute to higher overall revenues. Mitt Romney is now enjoying a career as a Marriott Corporation board member, because he was unable to communicate all this to a majority of the voters.
willie lynch
December 6th, 2012
9:17 am
Independent voter
December 6th, 2012
9:06 am
When Jimmy Carter left office we were the worlds leading creditor. When Reagan left we were the worlds leading debtor. Great job Ronnie!
JamVet
December 6th, 2012
9:20 am
Given that we just endured the (W)orst Ever and his eight year Reign of Error, I still find it truly bizarre that the Republican fools who voted for him and Dick (twice!) have Carter Derangement Syndrome.
Talk about clueless with a capital C…
jconservative
December 6th, 2012
9:23 am
Fact. Taxes are going up on 100% of taxpayers January 1,2013. This was decided in a bill passed by Congress in December 2010. In the House 138 Republicans and 139 Democrats voted for the bill. Bi-partisanship!
The discussion now is about the wisdom of cutting some or all of that tax increase. The discussion is on tax cuts not tax increases. The tax increase has already been decided. The question on the table is who is going to vote for tax cuts?
And it has become a political decision, not an economic decision. It became a political decision when Republicans decided to wait until after Obama lost his re-election bid to address the issue.
Now Republicans are in a political world they did not anticipate. They have already caved in on taxing the “rich”. Part 2 will be if they can find a way to get revenge in the 113th Congress.
As of this morning both sides agree that the “rich” will pay more. The Democrats want a tax rate increase and the Republicans want a to reduce the deductions of the “rich”. But both sides are going to soak the “rich”.
DownInAlbany
December 6th, 2012
9:24 am
independent thinker
December 6th, 2012
9:16 am
More Obama bashing and right wing talking points from General Norquist to the troops via Kyle to satisfy Norquist’s wealthy patrons who have gotten fatter and richer in the last twelve years than ever before.
Kyle try dealing with some reality about taxes and entitlements and quit stirring up the passions of the looney right wing kooks who use this column to spew anti-Obama venom and their delusions everyday. Three examples from this month’s AARP newsletter would make an intellectual discussion of what Obama has already passed possible now that all the lies of the GOP to get those two wannabees ected have failed miserably:
That you get your talking points from AARP is quite comical in itself!
JohnnyReb
December 6th, 2012
9:27 am
JamVet – your blubbering about Republicans hating the middle class is just that, blubbering. How about listing some concrete eveidence? Or have you forgotten the Bush tax cuts included everyone?
And, I suppose you buy into Obama’s lies that if Republicans don’t agree to increasing tax rates on the rich, then middle class rates go up.
That would of course be the case if Obama does not compromise, but the rates would go up for everyone. Where’s that in your truth?
real john
December 6th, 2012
9:31 am
Bravo Kyle, bravo.
You really have the libs fired up on here today. Rather than try to refute what you are saying, the resort to name calling. Since you are 100% accurate in your article I guess they really don’t have anything to say.
The way the libs and Obama talk out of both sides of their mouths is funny. They have no plan except to ‘tax the rich.” Of course, after they tax the rich, and we are still running trillion dollar a year defecits, I can’t wait to see what they have on tap next
Cheesy Grits is gone but not forgotten
December 6th, 2012
9:35 am
Bush cut taxes during a time of war ( A war he never budgeted or figured out how to pay for ) which was unprecendented in US history.
Ronald Reagan cut taxes dramatically and quadrupled the National debt in 8 years.
Eventually the bill comes due people.
Its due now. Taxes will have to be raised.
And people like Mitt Romney who pay half the rate of the average American is a good place to start.
JamVet
December 6th, 2012
9:37 am
Reb, you trickle down rube. Quit running away from the truth.
Forty straight years of flatlined wages for nearly four out of five American working families and you Reaganbots have cheered all of it on.
The minimum wage worth less than it was in 1968. And you love it. Banksters loot pension funds freely and you love it. CEO’s making more in a single day than most of their workers make in a year and you love it.
Your idiotic self-destructive ideas about capitalism are coming to a close.
Occupy that.
CC
December 6th, 2012
9:39 am
Relax, JamVet, Bookie-man will have something up in a little while and you can take your swill there. Everything will be OK.
PS: Take your meds now, like a good boy.
Glenn
December 6th, 2012
9:39 am
LOL . Everybody’s taxes should go up & government spending should be cut . It just makes fiscal sense . Conservatives & Liberals are idiots . Take some of that . Hey at least liberals are nicer people .
jconservative
December 6th, 2012
9:41 am
Thomas Jefferson – ““It is incumbent on every generation to pay its own debts as it goes.”
Whether intentional or not for over 200 years the US pretty much adhered to this idea. But in the early 1980’s we decided that we could stop paying for government but keep government services at 100%. We believed that “we could have our cake and eat it too”. And in the early 2000’s we actually increased government services with no thought of paying for those additional services.
The result is that today we have unfunded mandates of over $71 trillion.
One might suggest that we simply cancel the unfunded services created in the early 2000’s to make a small dent in the unfunded mandates.. But neither side has suggested such a move.
One side wants to cut government services and one side wants to increase funding for government services. The American voter has yet to decide. We wait for that day.
Butch
December 6th, 2012
9:42 am
Ok….I’ll play along….let’s raise taxes on income over $250K…..now what?
This additional revenue does very very little to begin to solve the problems…..maybe help the gov’t fund a few entitlements……
Where’s the economic growth? (here come the obstructionism posts…..)
Don't Tread
December 6th, 2012
9:43 am
Don’t worry, Our Lord And Savior 0bama will save us from the dastardly fiscal cliff! Oh wait…
independent thinker
December 6th, 2012
9:43 am
Down in Albany- You imply what the AARP is reporting on changes in tax laws and entitlements is not the law effective January 1. You have anything to refute the stated facts other than your hatred of the AARP? or would you prefer facts as they come from Grover, Rove, Beck,Limbaugh and the other GOP talking heads?
For an esxpose on how the Drug Industry has ripped off Medicare courtesy of the GOP and Tommy Thompson see:
http://boldprogressives.org/tommy-thompson-cost-taxpayers-20-billion/
Yeah we need entitlement reform – end all the GOP sweetheart deals to rob Medicare for their insurance and Big Pharma donors.
Hey Mitt-who got all the “gifts” when W was in office?
CC
December 6th, 2012
9:44 am
In terms of what their money can purchase, Obama has already cost the middle class and poor more than is believable. Inflation has done more damage than tax increases would have done. This is the reality that liberals don’t want to address because the blame has to be placed directly on Obama and his maddening spending.
carlosgvv
December 6th, 2012
9:45 am
Barry
An unpleasant possibility is suggesting itself. Both Obama and the Republicans may deliberately take stands they know the other side won’t accept. Then, as they hope, we go over the cliff. Before long the financial s*it hits the fan. At this point Obama, convinced he’ll be believed by the people, blames the Republicans and hopes to score major political points for the Democrats. Unfortunately, the Republicans, also convinced they’ll be believed by the people, blame the Democrats and look for a large number of political points. And, as this political ping-pong game is going on we, the people, suffer.
Could this be true?
jconservative
December 6th, 2012
9:49 am
Glenn at 9:39…”Everybody’s taxes should go up & government spending should be cut.”
As previously noted we are on schedule to do just that on January 1, 2013.
Cheesy Grits is gone but not forgotten
December 6th, 2012
9:50 am
Ok….I’ll play along….let’s raise taxes on income over $250K…..now what?
Thats a start.
Glenn
December 6th, 2012
9:52 am
Butch , it would give the R’s leverage on other issues like spending or entitlement cuts . It would stop , as Bobby Jindal is saying ,that the R’s are just looking out for the rich . Whats up with him ? I think he is eyeing 2016 .
It would help in perception which the R’s are having a major problem with currently .
Cheesy Grits is gone but not forgotten
December 6th, 2012
9:55 am
This is the reality that liberals don’t want to address because the blame has to be placed directly on Obama and his maddening spending.
You do realize spending has decreased under Obama.
Federal spending has gone up slightly under Obama — much slower than under Bush in his first four years — but overall government spending has actually gone down — something that hasn’t happened in four decades.
real john
December 6th, 2012
9:57 am
Actually John Q…it has been proven, that tax cuts have lead to economic growth in many cases.
real john
December 6th, 2012
9:58 am
So John Q…you think raising taxes HELPS economic growth…do share…
JamVet
December 6th, 2012
9:59 am
cc troll, get an adult to change your diapers and quit whining.
Cheesy Grits is gone but not forgotten
December 6th, 2012
10:00 am
So John Q…you think raising taxes HELPS economic growth…do share…
It did when Clinton was President.
One of the first things he did was raise the top marginal rate.
Economy did just fine and we actually had a surplus until W blew that in about 14 seconds.
Finn McCool (The System isn't Broken; It's Fixed)
December 6th, 2012
10:01 am
You folks really think the majority of small business owners earn more than $250k a year?
LOL. You folks need to turn off the bubble news channels and read some stats for a change.
Finn McCool (The System isn't Broken; It's Fixed)
December 6th, 2012
10:05 am
Finn: “Increasing taxes on small business. When did Obama propose this?”
CommonCents: When he suggested taxing those who make $250K more to subsidize others…
Lil Barry: Several times per day for the last two years.
Both are outright lies. You two are liars. He isn’t taxing small businesses, the tax increase is only on personal income above $250,000, it’s not on the business. Besides, the majority of small business owners don’t earn anything near $250k a year.
With your lying abilities you two should have a show on Fox News.