#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
Finn McCool (The System isn't Broken; It's Fixed)
December 6th, 2012
10:07 am
raising taxes HELPS economic growth
Let’s see your company get its goods to the stores on roads that have turned back to gravel. Taxes go to keeping our infrastructure strong. And guess what state our infrastructure is in because we haven’t been raising enough taxes????
Glenn
December 6th, 2012
10:08 am
As a small business owner you would also be surprised at what you can write off . Insurance is the bugaboo though .
mbtc
December 6th, 2012
10:13 am
This is a petty, frivolous piece. Have to go with the common sense logic of the good reverend Sharpton: let those who have benefited the most from this economy, sacrifice the most in its recovery including the deficit and debt. All can sacrifice more when things get better.
MarkV
December 6th, 2012
10:13 am
There are many things to argue about in Kyle article, but let’s start with the least important economically, but most jarring when reading the piece, since Kyle has used it to title his piece and color all the rest:
Kyle: ‘“My” $2,000? Was the president really acknowledging that what we earn is our money?’
There are many comments on the blog that can be called stupid, but not so often can be something Kyle has written called stupid, but this is.
If you want to substantiate this inanity, Kyle, then quote the President when he claimed that we do NOT earn our money. Otherwise, what you wrote is equivalent to another lie.
Cheesy Grits is gone but not forgotten
December 6th, 2012
10:16 am
Taxes on the wealthy are at an all time low in the history of this country.
The fact that Republicans will allow taxes to be raised on the middle class.
All to protect tax rates for the wealthy
Tells you a lot about their priorities.
JohnnyReb
December 6th, 2012
10:16 am
So Liberals are nicer people you say.
Their policies are keeping poor people, mostly blacks on the government plantation. They have successfully convinced a majority of blacks their only hope is reliance not on themselves in the land of opportunity but on the federal government. And that’s nice you say.
MANGLER
December 6th, 2012
10:17 am
The wealth of lower and average income families tends to be derived primarily through hourly wages/salaries at the higher tax levels.
The wealth of higher income families includes a heavier percentage from investment and estate incomes, which are taxed lower than direct income is. The income from salaries is already taxed at the higher rates anyway.
They want to level the taxation playing field where the lower tax rates on income that statistically is enjoyed by the wealthier families is taxed at the same rate as wages and salaries. Income is income regardless of where it came from. If we’re taxing it, shouldn’t it all be taxed at the same rate?
So yes, by raising the tax rates on investment income, it is essentially “felt” more heavily on the higher end of the income spectrum. But in reality, the more well off are simply being asked to pay the same tax rate on all of their income, just like they do on the wages portion of it.
Please tell me how that it not OK? And I don’t personally care if middle class taxes go up, as long as everyone’s taxes go up – to the same rate and at the same time. That’s fair and balanced, isn’t it?
JohnnyReb
December 6th, 2012
10:19 am
It’s astonishing how rabidly dedicated Lefties who just KNOW taxes on the rich must be raised have no idea how taxes work for samll business, which BTW employs the majority of Americans.
I don’t know why I am surprised, Obama does not understand it either.
The bottom line – the Left has to hate something/someone, surely the rich are to blame. Never looking in the mirror.
JohnnyReb
December 6th, 2012
10:20 am
John Q – the sheet set is a little too warm for today’s weather.
JohnnyReb
December 6th, 2012
10:23 am
I’m looking for a new word that applies to the full spectrum of idiotic Lefties and blind Obama supporters. They come in all makes and models, so the outdated racist, bigot, etc. does not seem to adequately apply. Perhaps someone here has a suggestion?
mbtc
December 6th, 2012
10:24 am
“The bottom line – the Left has to hate something/someone, surely the rich are to blame. Never looking in the mirror.”
Sounds to me like a cry for help, JR.
Glenn
December 6th, 2012
10:24 am
@Johnyreb
People and politicians aren’t synonymous . Blacks on the government plantation ? Johnyreb indeed & thanks for proving my point .
So reb why are most poor white southern people more conservative ?
JohnnyReb
December 6th, 2012
10:25 am
Yea, mbtc, they are really good at crying for help instead of helping themselves.
DownInAlbany
December 6th, 2012
10:25 am
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?
No I just think it’s admirable that you think we get our marching orders from the above mentioned conservative talking heads and you get yours from AARP…the organization that gave to Dems 14 to 1 in the last election cycle! Pot, meet kettle.
JDW
December 6th, 2012
10:26 am
@commoncents…”Wouldn’t also make sense to ask our government to spend less? It’s not a hard concept…”
Our problem is not single faceted…we must decrease spending and increase revenue. Problem is while Democrats acknowledge the former Republicans stubbornly insist the the latter is not a problem..in spite of the FACT that revenues as a percent of GDP, the only measure that makes sense of such numbers, is at a historic low.
On top of that Republicans blanch at any accountablity from the military on the amount spent even while we spend more than the NEXT TEN largest spenders in the world.
MarkV
December 6th, 2012
10:27 am
The main subject of criticism of the conservatives has been the size of deficit and national debt. But then Kyle writes,
“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,”
and suddenly it makes no difference to him that $1.6 trillion is twice the $800 billion in the effort to reduce the deficit.
The position of the Republicans regarding the revenue increase is interesting, to say the least. They reject increasing the tax the upper 2% as damaging the economy. That increase would presumably, reduce their disposable income, so that they would invest less, etc. Instead, the Republicans want to cut deductions and loopholes, with the effect, they claim, falling mostly again on the wealthy, thus reducing their disposable income.
JDW
December 6th, 2012
10:30 am
@JohnnyReb…”Bush’s tax cuts resulted in a very low debt to GDP ratio ”
O’ HORSE HOOEY…Bush’s tax cuts turn a surplus into a deficit and started us down the road that led to our current problem.
Kyle Wingfield
December 6th, 2012
10:32 am
MarkV @ 10:27: You’re conflating one element of deficit reduction with the entire thing, and you’re not even doing that right. As the NYT reported about the two plans:
“In all, the Republican offer would reduce the deficit more than the president’s, which predicted about $1.8 trillion in deficit reduction over the next 10 years.”
Lil' Barry Bailout - OBAMAPHONE!!!
December 6th, 2012
10:37 am
willie lynch: Tax rate. Stick with us now.
———
That’s what I meant. High earners already pay a higher rate than others.
Don’t fear facts.
Linda
December 6th, 2012
10:41 am
What a waste of energy!
There are 7 steps to problem solving & almost everyone on the blog today is arguing over how to solve “the” problem without defining, identifying & analyzing what the problem really is.
Raising taxes will not solve the problem. Raising taxes on the top 2 brackets will generate $85 B per year for an annual deficit that has been well over a trillion dollars per year for the last 3 years. The increase in tax revenues will last about 8 1/2 days. The problem is the other 356.6 days of each & every year.
There is also the problem with the $16.4 T debt which will be well over $20 T soon.
There is also the problem with the fact that our debt is over 100% of our GDP & that does not even include the unfunded liabilities nor the guarantees the fed. govt. is liable for.
Arguing about who should pay how much is a waste of time. Class warfare was a politically manufactured technique to divide voters & distract attention away from real solutions to our very real & mounting problems.
Going over the fiscal cliff is nothing compared to what the US will go over in the very near future.
Steve
December 6th, 2012
10:49 am
Again, it’s not rocket science. Let’s raise taxes on the incomes of those OVER 250K. This is just the amount OVER 250K, people. I make 120K and I’m doing very well, thank you. I can’t imagine my lifestyle if I made double my salary.
We do need to cut spending, but that needs to include the military if we’re going to take food away from poor kids or the elderly. Come on people, stop being so asinine.
Rafe Hollister
December 6th, 2012
10:50 am
Kyle, very cogent column, which points out the duplicity and hypocrisy in the Dem/Obama view of America’s financial future. They obviously overwhelming aim of the Mistake is simple, redistribution through taxation. Barry’s principal goal, no matter the method, is redistributive justice. He will use any means necessary to get to his goal. Many of us believe or at least hope, he has some desire to deal with the deficit and debt, but I think this is just wishful on our part, as he has provided no evidence, that he has any desires, not involving more government spending/redistribution.
They BOTH suck
December 6th, 2012
10:52 am
Kyle
Side topic: You see where Jim Demint is resigning to go head the Heritage Foundation?
Will not change much in terms of the Senate because SC will have another Republican, but he has been an influential Senator in his own “right”
Rafe Hollister
December 6th, 2012
10:54 am
Linda 10:41, well said! The class warfare is just a tool for more redistribution and has nothing whatsoever to do with any deficit or debt.
Cheesy Grits is gone but not forgotten
December 6th, 2012
10:56 am
That’s what I meant. High earners already pay a higher rate than others.
Don’t fear facts.
Mitt Romney sure doesn’t. In fact I pay double the rate he does.
MarkV
December 6th, 2012
10:59 am
Kyle Wingfield @10:32 am
I am not conflating anything. I have pointed out that one element of deficit reduction, which you have pointed to. Naturally, there will be a discussion of the other part of the equation, the spending cuts. But the overall outcome following negotiation on those cuts will depend on the first part of the equation, the revenue increase.
Glenn
December 6th, 2012
11:00 am
What are you doing Steve ? Using Common sense ? Trying to use logic to solve problems ? Well I won’t let you . STEVE !! You want to cut defense because you want a weak vulnerable America . Steve this thinking also shows you support terror . Steve why do you hate America ?!!
md
December 6th, 2012
11:02 am
” It only makes sense to ask those that can afford to do so to pay more. It is not a hard concept.”
Maybe, If one has a warped mind and only looks at a fraction of the equation……..
This just because they have it is silliness……and unethical at best.
I’ll go back to the question “if a student that CHOOSES to study 24/7, CHOOSES to do no partying and makes A’s have to share those A’s with a student that CHOOSES to party 24/7, CHOOSES to do little studying and makes F’s?
Tell me oh wise folks on the left, why they should? Should they have to share them just because they have them? I see no difference, I would love for someone on the left to explain it to us.
Aesop's Fables and other Lib Economic Theories
December 6th, 2012
11:02 am
It looks as though pmsnbc has told the obozobots it’s time to hate on Limbaugh and Fox News again.
Cheesy Grits is gone but not forgotten
December 6th, 2012
11:05 am
Has the phony “War on Christmas” started yet ?
Rafe Hollister
December 6th, 2012
11:06 am
Cheesy, rate, smate, crate, Mitt Romney paid more taxes in one year than you and your spawn will pay in all your lifetimes. You should send him a thank you card, for without people like him, this country, that is already up the creek, would be without a paddle.
Finn McCool (The System isn't Broken; It's Fixed)
December 6th, 2012
11:07 am
Congress’s Joint Tax Committee estimates that in 2013 about 940,000 taxpayers would have enough business income to break through the $250,000 ceiling – and, again, they’d pay additional taxes only on dollars earned above $250,000.
All told, fewer than 3 percent of small business owners would even reach the $250,000 threshold.
from Robert Reich’s blog
https://www.jct.gov/publications.html?func=select&id=69
MarkV
December 6th, 2012
11:08 am
“I’ll go back to the question “if a student that CHOOSES to study 24/7, CHOOSES to do no partying and makes A’s have to share those A’s with a student that CHOOSES to party 24/7, CHOOSES to do little studying and makes F’s?”
Here we go again. One would think that the cons have learned something from the 47% debacle that led to Romney’s defeat, but here we have it again. Those earning less are moochers, people who only want to take, who do not work hard. Go on, it will make the defeats perpetual.
md
December 6th, 2012
11:09 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?”
Last I checked, we all got a tax cut, so what I see wrong is folks like you thinking it is ok to tell others that they have to give theirs up while you keep yours……THAT is the problem.
just sayin'
December 6th, 2012
11:09 am
It’s easy to say, “raise taxes on the rich.” What most of you don’t grasp is that those people will hardly EVER pay any more taxes. With investments, etc., they have their own “people” who will be sure that their income is sheltered so that their net tax payout will still be lower than most of the rest of us.
Do some of you just not ever think? Political talk is very cheap but will get you re-elected by the illiterate, non-thinking voters.
Steve
December 6th, 2012
11:09 am
Our military is 10X the size of 10 of our competing companies combined. We don’t need bases in Europe.
JDW
December 6th, 2012
11:10 am
WOW there is a God….another one bites the dust…and a particularly obnoxious one at that!
http://politicalticker.blogs.cnn.com/2012/12/06/breaking-sen-jim-demint-will-step-down-from-senate/?hpt=hp_t3
Aesop's Fables and other Lib Economic Theories
December 6th, 2012
11:10 am
john q calling other people not too bright is the most sardonic trash talk I’ve heard in all my life.
Someone should tell her that if we wanted to hear what cnn has to say, we’d turn it on.
Lil' Barry Bailout - OBAMAPHONE!!!
December 6th, 2012
11:10 am
The problem won’t be solved because more than half the country doesn’t even acknowledge or care that there is a problem. The problem will be solved when our creditors stop lending us money, and then the solution will be to destroy Americans’ savings, either by confiscating it or by devaluing it via the printing press. And then, more than half the country won’t care because they’re so irresponsible as to not have any savings.
The smart money is in foreign currencies in banks outside the U.S.
just sayin'
December 6th, 2012
11:10 am
Steve,
You obviously know nothing about military strategy and “providing for the common defense,” as stated in the preamble to the Constitution..
Cheesy Grits is gone but not forgotten
December 6th, 2012
11:11 am
Cheesy, rate, smate, crate, Mitt Romney paid more taxes in one year than you and your spawn will pay in all your lifetimes
At a far less rate.
41 And Jesus sat over against the treasury, and beheld how the people cast money into the treasury: and many that were rich cast in much. 42 And there came a certain poor widow, and she threw in two mites, which make a farthing. 43 And he called unto him his disciples, and saith unto them, Verily I say unto you, That this poor widow hath cast more in, than all they which have cast into the treasury: 44 For all they did cast in of their abundance; but she of her want did cast in all that she had, even all her living.
Cheesy Grits is gone but not forgotten
December 6th, 2012
11:13 am
You obviously know nothing about military strategy and “providing for the common defense,” as stated in the preamble to the Constitution..
Where does it say we should have 50,000 troops in Germany in the constitution.
We spend on the military like a third world dictatorship would. Honestly it would make North Korea blush.
When you are spending more than the next 10 countries in the world COMBINED.
Something is really really wrong.
Hillbilly D
December 6th, 2012
11:14 am
The only way for a tax increase to bring in substantial bucks is for it to be on the “middle class”, for the same reason Willie Sutton robbed banks.
My guess is that Obama knows exactly what he’s doing. He’s hoping we “go over the cliff”. That way, he gets his tax increase, through ending of the Bush cuts, and he can blame the whole thing on the Republicans.
The problem with politicians now days is that all they know how to do is campaign. They’re all in campaign mode 24/7/365, year in and year out. Governing is of no interest to them.
Rafe Hollister
December 6th, 2012
11:18 am
Cheesy, casting is a voluntary act, confuscation not so much. Jesus was not sitting over the government treasury either or he probably would have said something about the sin of wastefulness.
md
December 6th, 2012
11:19 am
“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.”
A small business owner pays taxes on his/her own 1040 in case some are not aware.
They BOTH suck
December 6th, 2012
11:20 am
Barry
Is that why foreign investment in the US went up in 2011 and will increase in 2012?
md
December 6th, 2012
11:21 am
“Here we go again. One would think that the cons have learned something from the 47% debacle that led to Romney’s defeat, but here we have it again. Those earning less are moochers, people who only want to take, who do not work hard. Go on, it will make the defeats perpetual.”
Typical non-answer Mark, you do know the rest of us can see that you had no answer just an excuse….right?
MarkV
December 6th, 2012
11:21 am
Hillbilly D @11:14 am
“The only way for a tax increase to bring in substantial bucks is for it to be on the “middle class”, for the same reason Willie Sutton robbed banks.”
Kyle: “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.”
It looks like 1.6 trillion over 10 years is not ”substantial bucks” for Hillbilly D.
Linda
December 6th, 2012
11:23 am
Lil@11:10, That’s already a problem. The fed. govt. has been buying it’s own debt. What is really frightening is that the debt held by the Federal Reserve is often not counted in calculating debt to GDP, as if it just doesn’t “count.”
The bottom line is that the US now owes more than we are worth.
Lil' Barry Bailout - OBAMAPHONE!!!
December 6th, 2012
11:23 am
Something is really really wrong.
———
Apparently your messiah disagrees.