Monday, October 4, 2010
Obama's Definition of Rich is Wrong
Obama's Definition of Rich is Wrong
Mon, Oct, 04, 2010
Bush tax cuts are set to expire at the end of the year for individuals who earn $200,000, or families making over $250,000. That’s $125,000 each, if you’re married. Or barely above the poverty line, if you live in a place like New York City.
It’s not unreasonable to see how someone making this kind of money can be struggling to get by as the sole proprietor of a small business, you’re not only paying federal, state and New York’s city-level tax (as high as 12.62% in the top bracket), but also both employer and employee shares of Social Security tax, Medicaid, and all the rest. That’s in addition to the constantly increasing taxes and service costs on virtually everything in NYC.
Where does it all go? If the New York Senate Task Force on Government Efficiency is to be believed: “Office of Mental Retardation third largest overtime spender in New York State,” proclaims task-force Chairman Jeffrey Klein.
It was things like this—like the inability of the state of New York to keep their hands off my hard-earned money and limit their "Office of Mental Retardation" activities to normal working hours—that personally drove me out of NYC.
One out of every seven New York City taxpayers did likewise, and we were earning more than the new taxpayers who will ultimately replaced us, according to a 2009 report by the Empire Center for New York State Policy.
So what can we learn from these lessons? First, that $125,000 gross income per person isn’t “rich,” as Obama would have us believe. He’s running a federal government now, not organizing one of his communities. What is “rich” in one part of America is “poor” in another. He has mused about letting the Bush tax cuts expire—which they will, if Congress doesn’t get around to extending them by the end of this year. And judging by their inability to get much done at all, I can’t say that I would hold out much hope—especially if, as seems likely, the Democrats get hammered in the November midterms and decide to give the electorate one final middle-finger on their way out the door. In allowing the cuts to lapse, Obama would effectively raise income tax on the top two brackets by up to 5%.
Obama often cites a need for these “top 2.5% of earners” to do their share. So on the penthouse level of the massive American social hierarchy that looms so large in Obama’s brain, millionaires are actually mingling and eating crispy crabcakes with those topping out at $125,000?
Personally, if I (or anyone with any sense of perspective) was going to pick an arbitrary figure to define “rich”, I wouldn’t say $150,000 like Obama did during his presidential campaign. When I think “rich”, I think about people who have so much money that they scout out second homes in no-tax states to avoid having to pay a few more percent—not those who have to suck up that extra few percent because they can’t afford a second home. Another sign someone is “rich”? If they haven’t paid taxes at all and aren’t on welfare, then they might, in fact, be “rich.” How about starting there?
Any lesser definition—particularly one that defines the term as someone making a living in the low $100,000’s—smacks of overstretched fiscal envy: the kind of attitude seen in socialistic states where the overarching principle of equality supersedes each person’s individual drive for financial freedom, self-determination, and achievement.
It’s a dangerous principle with which to infect a free-market economy: Don’t work too hard, climb too high, or earn too much. Otherwise, the government will punish you. Don’t do too much, or you’ll be wasting your time anyway because the government will just take the earnings from your added productivity.
How far left is Obama leaning on this? To give you an idea, France—a country traditionally viewed as more Socialist than America—is arguably now more fiscally friendly towards small businesses and entrepreneurs in the same bracket Obama and the Democrats are looking to squeeze.
While salaried French employees are launched into a 40% tax bracket above 70,000 EUR (approximately $100k USD)—an unmistakable stamp of socialism—all businesses in France with profits above 80,300 EUR (approx. $112k USD) pay a flat tax of 33.3%.
Any entrepreneurs or self-employed independent workers making up to 80,300 EUR pay between 12%-21% tax. With this kind of incentive for independent workers, which way is President Sarkozy’s government pushing people? That’s right—away from socialism and hearding.
What incentives are being provided by Obama and the Democrats for people to advance themselves professionally and financially, or to strike out on their own and produce their own opportunities? The message seems to be that the government will leave you alone if you make too little—or if you make millions—but will ride you hard and bleed you dry on the journey between those two points.
And finally, the second lesson from the New York State “Office of Mental Retardation Overtime” report is that any money the government peels off of your productivity will manifestly be funneled into activities and ventures that are pretty much ... mentally challenged.
To read about more ways that Obama is wrong, click here.
Posted by Brett at 11:47 AM