#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
Kyle Wingfield
December 6th, 2012
11:26 am
MarkV @ 11:21: Given that you have to compare both of those figures to the $6.4T in deficits over the next decade that CBO estimates based on Obama’s 2013 budget, I’d say Hillbilly is right.
right to free speech.
December 6th, 2012
11:27 am
Larry
December 6th, 2012
5:56 am
Kyle.. First of all his name is President Obama is talking about working class families who need help. The stalled economy is putting strain on working class families. Obviously people making over 250k a year have more discretionary income so paying a higher tax rate is not going to affect spending habits. Lets get real!
.
Moron
December 6th, 2012
5:57 am
Wingfield is an idiot. Obama this and Obama that and all blame Obama. Try putting some blame on Congress, the lobbyists, and the money driven political system. And yes folk earning more than 250k per yr can afford to be taxed more.
I’m glad that you two rocket scientists know how much discretionary spending that people making $250K have. You don’t have the foggiest idea how it took them to get there or what the rist that they took to make it.
I think the Feds should take all our money and make everyone poor, that way we could suck the life out of everyone and live off the Govt’s teet.
People aren’t born rich most of them worked hard to make it, something that you 2 should try doing.
cranky old man
December 6th, 2012
11:30 am
“If the answer to all three questions is ‘yes,’ why should it be any different for higher-income earners?”
Well, people with incomes above $250k tend to spend a lower percentage of that income, and invest a higher percentage. Both actions are good for the economy, but spending creates demand, which motivates businesses to expand, which, in turn, creates the investment opportunities. If businesses are not expanding, the wealthy essentially park their money in the metaphorical mattresses.
It sort of reminds me of that chapter from the “Hitchhiker’s Guide to the Universe” wherein the wealthy inhabitants of a planet that specialized in making customized private planets for the wealthy put themselves in suspended animation for a few thousand years, until economic conditions improved.
right to free speech.
December 6th, 2012
11:33 am
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
Cheezy, You pay the same % of taxes that Mitt pays on your investments, that’s how he makes his money, on investments. He also paid $4 million into charity, how much did you pay?
Please get a little economic education.
Linda
December 6th, 2012
11:35 am
One of the reasons the US has military bases overseas is to protect our oil supply. The US has spent trillions of dollars for the Oil Police because we are too stupid to drill for our oil own under our feet & off our shores.
Canada is drilling near Maine. Russia is drilling near Alaska. Mexico is pursuing drilling within 25 miles of US waters. Six foreign companies are exploring north of Cuba, 60 miles from Florida. The US is loaning Brazil money to drill off their shores. The US turned down a free pipeline from Canada that would have been built with American jobs.
We are the laughing stock of the world.
md
December 6th, 2012
11:39 am
Back to the math problem, you folks calling for higher taxes do understand that there is 2T in corp profits sitting offshore mainly because of taxes, right?
I’ll ask again, in a global economy why would any corp want to reduce it’s own revenue by 25% just to bring money into this country? A savy businessman will borrow the funds in this country at the super low rate to borrow and use 100% of that money offshore as collateral, and march along with the best of both worlds.
Some of you out there are just ignorant as to how the process works and what it actually takes to MAKE money.
MarkV
December 6th, 2012
11:40 am
Kyle Wingfield @ 11:26 am
I am quite willing to agree with Hillbilly that the middle class will have to pay more. Still. 1.6T/6.4T is one quarter, or 25%. I doubt that anybody calls a quarter of a sum a non-substantial part.
JohnnyReb
December 6th, 2012
11:43 am
“Some of you out there are just ignorant as to how the process works and what it actually takes to MAKE money.”
Excellent point, md, but I have to add. About 98% are ignorant or else there would not be the dreaded, ugly 2%.
They just KNOW you made that kind of money either on their backs or doing something illegal. After all, they spend their day on blogs, watching TV and/or screwing their employer. How in the world can you do the same and make that kind of money.
Peace
December 6th, 2012
11:44 am
And we need a federal transaction tax on lottery sales. That way most of the 47% who pay no federal income taxes would get a chance to help Fund President Obama’s spending. Now that’s fair.
JDW
December 6th, 2012
11:45 am
@Hillbilly…”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.”
Willie was right, however the money resides with the top 25%…50% of it to be exact.
http://www.statista.com/statistics/203247/shares-of-household-income-of-quintiles-in-the-us/
JohnnyReb
December 6th, 2012
11:46 am
Speaking of wasting time, I”m out of here. I have to make a few bucks so little Barry can give it to the underprivileged. I just lovvvvvvvvvve giving better than 30 cents of each dollar to someone else.
Cheesy Grits is gone but not forgotten
December 6th, 2012
11:53 am
I just lovvvvvvvvvve giving better than 30 cents of each dollar to someone else.
Enjoy driving on those roads.
Thats where the money goes.
Cheesy Grits is gone but not forgotten
December 6th, 2012
11:56 am
Frankly its shocking to see how terribly misinformed our conservative friends are.
This is a product of Fox News no doubt.
for example most will tell you Obama is spending us into oblivion
But the fact is spending has gone down under Obama. Not gonna hear that on Fox.
Or that we if we just drill baby drill we wouldn’t need to buy from other countries.
But the fact is Oil production is at an all time high in this country. Not gonna hear that on Fox either.
Its truly a sad state of affairs when one side of the argument is so lost that a true dialogue cannot take place.
Alter Ego
December 6th, 2012
12:00 pm
@Finn McCool 11:07
Wrong.
http://www.csmonitor.com/Business/Growthology/2010/0904/Just-how-many-small-business-owners-are-in-that-top-tax-bracket
Wipe Out
December 6th, 2012
12:05 pm
Cheesy
Not to mention the corporate effective rate avg is 12.5%, which is much lower than the straw man that many on the right put out when they say the US has the highest corporate tax rate, yet can’t show one company paying that rate…… In reality we are in the lowest 5 in terms of the effective rate.
Some of the lowest rates in 50 yrs and md thinks that these corporations just want to bring there money into the US.
They say this so the md’s of the world will do their bidding and it works like a charm.
md
December 6th, 2012
12:06 pm
“But the fact is Oil production is at an all time high in this country. Not gonna hear that on Fox either.”
Must have missed the part about in spite of Obama. That production is up on private property and DOWN on federal land. Just think how much more there could be had the admin not scaled back.
Linda
December 6th, 2012
12:06 pm
Kyle says “the $6.4T in deficits over the next decade that CBO estimates based on Obama’s 2013 budget…”
The CBO almost always underestimates & this estimate is based on a rosy forecast of a booming GDP.
However, if this is anywhere close, it grows the debt to $22.8 T in 10 years, which means we will have a debt ratio of 146.15% to the GDP (as of 6/3//12) ($15.6 T).
In comparison, Greece’s debt ratios were:
106.1% in ‘06
105.1% in ‘07
110.3% in ‘08
126.8% in ‘09
142% in ‘10
152.3% in ‘11 &
157.7% in ‘12.
Once huge amts. of interest are added to the debt, the debt grows at a faster pace.
The only difference between Greece & the US is that Greece had the EU & the IMF to rely on. Who will bail out the United States of America?
md
December 6th, 2012
12:08 pm
“Some of the lowest rates in 50 yrs and md thinks that these corporations just want to bring there money into the US. ”
Are you always this clueless?
It is fact that there is 2T not coming home due to tax rates, regardless of what those rates are, or are you one of those that just has no clue as to how the system works??
Kyle Wingfield
December 6th, 2012
12:27 pm
Actually, Cheesy, I find it shocking how many people, like you, refuse to scratch below the surface at all on these topics. On spending, I did that several months ago: http://blogs.ajc.com/kyle-wingfield/2012/05/24/about-the-idea-that-obamas-spending-has-been-tame/
Linda
December 6th, 2012
12:28 pm
What a novel idea! A deep-water fish farm up to 20 miles offshore! Who in the US would object to that?
Other than:
Environmental Protection Agency,
Army Corps of Engineers,
Fish and Wildlife Service,
Food and Drug Administration, and
National Oceanic and Atmospheric Administration (NOAA).
Regulations that would have to be complied with include:
the Magnuson-Stevens Fishery Conservation and Management Act,
Jones Act,
OSHA rules, and
who knows how many others.
Regional Fishery Management Councils and various state agencies involved in historic preservation and tourism would all have a say.
And all of this is before the courts get involved. Setting up deep-water fish farms in the U.S. would require a hefty budget for defending against lawsuits from NIMBY (Not In My Back Yard) activists and competing on-shore and near-shore fish farms, as well as paying an army of lobbyists to fend off opposition from states like Alaska and Maine where fishing fleet interests have considerable political pull. The cost and uncertainties introduced by dysfunctional crony capitalism, pay-to-play politicians, and misguided environmental activists would be deadly to any entrepreneur.
Is it companies or the US govt. that are sending jobs overseas? These went to Panama, which is getting the jobs, the fish & the export revenues.
http://www.realclearmarkets.com/articles/2012/11/26/regulatory_uncertainty_drives_fish_farmer_to_foreign_waters_100008.html
Wytavious
December 6th, 2012
12:56 pm
There is a reason why George W. Bush was too ashamed to make an in person appearance @ the GOP convention, and why there was rarely any mention of his toxic name by the Republicans during the campaign.
They know he got us into this mess, with his “WMD” Iraq war and his unfunded prescription drug entitlement program. And he provided perfect cover for BHO to continue the reckless spending once he took over.
Wipe Out
December 6th, 2012
1:04 pm
md
Are you always that gullible? I mean on this blog, because one can only hope that you are not as gullible away from the blog
md
December 6th, 2012
1:30 pm
Wipe out. You can try to disguise the fact that you have no clue but google is not your friend if you don’t use it.
I’ve done my share of research on the subject and have plenty of first hand knowledge within corps to understand that what I post is actually true, so your attempt to discredit it without any facts to back it up is a futile attempt on your part. Anyone with a computer can look it up and see that you have no clue as to what you are talking about.
Lil' Barry Bailout - OBAMAPHONE!!!
December 6th, 2012
2:04 pm
“But the fact is spending has gone down under Obama.”
——–
Evidence that we need to redouble our efforts to improve the public schools. As if we needed more.
SGT Anonymous
December 6th, 2012
2:26 pm
Most people are missing the point of the fiscal cliff’……..The point is not how the rich people spend there money. The point is trying to make to economy better than what it is. Another recession is not needed especially for the non-wealthier people……Maybe if most people put thereselves in the situation of a non-weathier person the you will understand what President Obama is trying to do. This is from a man who didn’t respect Obama cuz he wasn’t doing for me but now I understand and have much much more respect for President Barack Obama. Understand the affect of this movement…….If it won’t affect the rich but affect the poor for the good…….Why not
Cheesy Grits is gone but not forgotten
December 6th, 2012
2:31 pm
http://www.forbes.com/sites/rickungar/2012/05/24/who-is-the-smallest-government-spender-since-eisenhower-would-you-believe-its-barack-obama/
Kyle ill take Forbes word for it over a man who voted for Newt Gingrich.
The fact is spending has gone down under Obama.
There is no mistaking it.
Lil' Barry Bailout - OBAMAPHONE!!!
December 6th, 2012
2:50 pm
If Politifact and its ilk were as nonpartisan as their program cheerleaders claim, Obozo having reduced spending would have been their “Lie of the Year”.
Kyle Wingfield
December 6th, 2012
3:18 pm
Cheesy @ 2:31: The basis for that piece was the one I examined in my own piece. And it addresses none of the objections I raised.
David
December 6th, 2012
4:21 pm
There is no one that will answer my question of WHY SHOULD PEOPLE WHO MAKE MORE MONEY PAY MORE TAXES? Take me for example, if I make $30,000/year as apposed to someone who makes $250,000/year. If we both are taxed 10% (and I choose that percentage because liberals don’t seem to know how to do simple math) then at the end of the year I pay $3,000 in taxes as compared to his $25,000. Did he or did he not PAY MORE TAXES THAN I DID??? You see I actually showed you what my income is. I do not have a problem paying my fair share of the taxes. I have a lot of friends that are really, really wealthy. These are hard working Americans that get up every morning before the sun rises and they work their butts off all day long to be able to ENJOY the money that they earn. SINCE WHEN IS IT A SIN TO WORK HARD AND BE SUCCESSFUL??? No one can answer that question either. Or you liberal choose not to answer that question, or CANNOT answer that question. Tell me the truth liberals, if you got up every morning and worked your butt off putting in 12 to 16 hours a day earning every bit of the money that you work for, would it not piss you off if someone says you should pay the majority of that to the government because you should share what you have with others. I don’t mind sharing and in fact I do share. Even on my low salary I find a way to be able to give to charities all the time. But that is MY CHOICE AND SHOULD STAY MY CHOICE. Since when do I need someone telling me what to do with my money??? Answer that one liberals. DISTRIBUTION OF WEALTH DOES NOT WORK. It has been proven time and time again.
Lil' Barry Bailout - OBAMAPHONE!!!
December 6th, 2012
5:14 pm
When Obozo opens the re-education camps, David will be camper #000001.
JDW
December 6th, 2012
5:18 pm
@Kyle…”On spending, I did that several months ago:”
And as we discussed then you were off base…
http://www.factcheck.org/2012/06/obamas-spending-inferno-or-not/
Lil' Barry Bailout - OBAMAPHONE!!!
December 6th, 2012
5:24 pm
“Lie of the Year” in the reality-based world, JDW.
JDW
December 6th, 2012
5:33 pm
@Kyle…(LBB you should read this too)
The proper number to use as the baseline, per the FactCheck analysis is $3.31 trillion.
Which rose to 3.45 in 2010 +4.26%, 3.60 in 2011 +4.24% and 3.795 in 2012 +5.34%
By comparison Duhbya grew spending at AVERAGE of 9.75% and Reagan grew it 8.5% AVERAGE. Clinton was at about 4% and Bush 1 at about 3%.
There is no runaway spending by this Adminstration…Duhbya and Reagan on the other hand…
JDW
December 6th, 2012
5:34 pm
LBB…you wouldn’t know a reality-based world if it bit you in the a$$.
Kyle Wingfield
December 6th, 2012
5:39 pm
JDW @ 5:33: Your problem is calling that a “baseline.” The $800B+ stimulus was supposed to be one-time spending, right? So why is spending higher at all than it was in 2009? That is the point.
Lil' Barry Bailout -Vote American
December 6th, 2012
6:24 pm
You could also compare Obozo’s spending total in his first four years to Our President Bush’s spending in His last four years (with an appropriate adjustment in 2009 for Obozo-caused spending, of course).
Elections Have Consequences
December 6th, 2012
7:01 pm
@JDW 5:34
You can’t seriously consider ‘Factcheck.org’ an objective source for research?
JDW
December 6th, 2012
7:04 pm
@Kyle…”Your problem is calling that a “baseline.” The $800B+ stimulus was supposed to be one-time spending, right? So why is spending higher at all than it was in 2009? That is the point.”
Because it was not all spent in 2009. In fact it is not all spent now.
http://www.recovery.gov/Pages/default.aspx
JDW
December 6th, 2012
7:05 pm
@Elections…indeed I do…you know Pulitzer prize and all
JDW
December 6th, 2012
7:07 pm
@Kyle…further to that point…there is no addition spending planned in 2013 vs 2012. Those projections are almost exactly the same. There is your catch up
JDW
December 6th, 2012
7:08 pm
O and Kyle.. same was true for 2010 vs 2009.
Lil' Barry Bailout - OBAMAPHONE!!!
December 6th, 2012
7:10 pm
Pulitzer? Almost as prestigious as the now-besmirched Nobel! Patriotic Americans need not apply.
Lil' Barry Bailout - OBAMAPHONE!!!
December 6th, 2012
7:18 pm
“With actual receipts less than projected outlays, the budget passed by the Reid/Pelosi Congress and signed by President Obama produced a net deficit of approximately $400 billion dollars, adding to a United States governmental debt of about $11.4 trillion. The actual spending signed into law in the final bill was increased by over $400 billion by the Reid/Pelosi led congress.”
http://en.wikipedia.org/wiki/2009_United_States_federal_budget
—————————-
Original deficit estimate in the budget passed by the Democrat congress and signed by Obozo: $400 billion.
Additional deficit spending added on top of that, passed by the Democrat congress and signed by Obozo: $400 billion.
Obozo: Guilty as charged.
Lil' Barry Bailout - OBAMAPHONE!!!
December 6th, 2012
7:47 pm
France has raised taxes on high income earners. Just announced: French unemployment is up to 10.1%.
The Obozo model: Failure.
Elections Have Consequences
December 6th, 2012
8:32 pm
@JDW 07:05
Ah yes-the Pulitzer. Great equalizer of all things worthy.
I’m always amazed when people countenance ‘research’ through what’s already been filtered through a political prism. Hardly objective, of course. Pity.
Sufercybe
December 7th, 2012
4:08 am
“Blah blah blah. Way to say the same thing the same way.
When the top needed a bailout nobody saw a problem with that…years later we’re still without and you think we give a crap about your tax rates for the next 4-8 years.
lawl
I’ll go write a cheesy article somewhere to go with this whiney one”
Hahaha lol.
JDW
December 7th, 2012
7:40 am
@Elections…”I’m always amazed when people countenance ‘research’ through what’s already been filtered through a political prism. Hardly objective, of course. Pity.”
You must have real news organizations confused with Faux News.
Lil' Barry Bailout - OBAMAPHONE!!!
December 7th, 2012
8:04 am
willie lynch: What’s wrong with those making over 250K paying a higher tax rate on the earnings above that?
———–
Didn’t your mama teach you that it’s wrong to take other people’s stuff?
That there are folks in this country who think it’s OK to take 50% of what someone earns is an embarrassment to real Americans. The men who founded this country would mourn the loss of freedom and liberty that Democrats have deliberately caused.
SGT Anonymous
December 7th, 2012
9:12 am
@David………Dude…..Chillout……once again, you are my prime example……Its life dude. The odds are simple, its either the people who make more money pay more taxes, or the people who make NO money pay more taxes……You talk as if you are up everyday with these friends and going to work with them everyday and i’m pretty sure you’re not……You are not apart of the government so all you can do is make a decision…..The WEALTHY or The POOR. but before you make your decision, think of it this way……how is the President helping the economy making POOR people pay more taxes, and its will hurt them…….RICH people always talking as if the can buy the world so let them buy it in TAXES……….Maybe if you stop trying to be so smart about the situation and think of the economy instead of what u and your rich friend going do for New Years Eve or what vacation the are going to help you go on the you will be ok…….maybe you pay you’re fare share of taxes but honestly in my opinion…..the rich don’t