Tuesday, April 10, 2012
The Buffett Rule and the audacity of hopelessness
Enjoy the band while your ship goes down.
by John Hayward
President Obama made headlines with a bizarre appearance before the American Society of Newspaper Editors last week, in which he assured us that the latest Republican budget proposal would cut financial aid for college students; eliminate medical grants for research into Alzheimer’s, cancer, and AIDS; eliminate Obama’s miserably failed “investments” in “clean energy technologies”; kick children out of the Head Start program; deny healthy food to mothers and young children; increase crime; make our borders less secure; close national parks; wipe out protection for clean air and drinking water; eliminate air traffic control services in parts of the country; deny us access to accurate weather forecasts; and compromise our ability to evacuate from the path of hurricanes.
These horrors (and the merciful end of Obama’s “green energy” crony capitalism) would be unleashed by a budget that cuts spending, over the next ten years, by an amount roughly equivalent to the debt Barack Obama dumped on America’s children in just three years – a spending binge unequalled in history. Give him another four years, and he will unquestionably have doubled our already gigantic national debt.
How did we survive in the days before Barack Obama racked up another $5 trillion on our credit cards? We didn’t have accurate weather forecasts prior to 2008? Mothers and children choked to death on unhealthy food? Would it be rude to point out that periods in history with far less federal spending brought us far greater prosperity than Obama could ever dream of? And how can anyone take Obama’s hosannas to the American dream, independence, and entrepreneurship seriously, when his re-election hinges on the explicit assertion that his hapless subjects cannot survive without spending a trillion dollars more than the government takes in, every year, forever?
Well, maybe the President can do something to close those huge deficits by increasing revenue. What’s his big plan for that? The one proposal he keeps coming back to, over and over again? That would be the infamous “Buffett Rule,” an utterly ineffectual millionaire surtax built on an outright lie, which would rake in just enough money to run the Obama government for twelve hours a year.
The outright lie behind the Buffett Rule is the constant assertion that billionaires are paying less in taxes than their secretaries. It’s not true, as the Wall Street Journal demonstrated some time ago:
In 2008, the last year for which such data are available, the IRS reports that those who made more than $1 million in adjusted gross income paid an average income tax rate of 23.3%.
That's slightly lower than the 24.1% rate paid by those making between $500,000 and $1 million, probably because the richest are like Mr. Buffett and earn more from capital gains and dividends. The rate for a relative handful of the rich—400 people—fell to 18%, the modern equivalent of Barr's Gang of 21. But nearly all millionaires still paid a rate that is more than twice the 8.9% average rate paid by those earning between $50,000 and $100,000, and more than three times the 7.2% average rate paid by those earning less than $50,000. The larger point is that the claim that CEOs are routinely paying lower tax rates than their secretaries is Omaha hokum.
Nor is the often-repeated assertion that the Evil Rich aren’t “paying their fair share” true, in any absolute or logical sense. There is no way to chop up the latest IRS data without concluding that the rich pay a very disproportionate share of the tax burden, while the bottom half of Americans pay no income taxes at all. At the higher income levels – top 10, 1, and 0.1 percent – the share of tax burden carried is about double the share of income they earn.
Thus, if Barack Obama’s class-warfare speeches were interpreted logically and literally, requiring “millionaires and billionaires” to pay the same tax rates as their secretaries, or pay a share of income taxes equal to the percentage of total U.S. income they receive, would give them massive tax cuts, not make them the targets of new surtaxes.
This is the audacity of hopelessness: the angry defiance of reason, the ruthless purge of meaning from plain language, and above all the cultivation of despair. The grand project of socialism involves defeating the middle class, by teaching them to think of themselves as poor. That’s what Obama is selling, and as he grows more desperate, he wastes less time trying to conceal it. We’ve gone from lofty technocratic babble about “investments” and “prosperity” to grim threats that deficit reduction means starvation, and the end of weather forecasting.
Here is your future as Obama envisions it: the government will spend ever-increasing amounts of money, as frantic tax grabs cause the economy to collapse… and provide rhetorical fuel for further tax grabs. “Fairness” will be constantly re-defined to grab more money from the outnumbered, in a never-ending process. You will be expected to applaud purely symbolic gestures, such as the Buffett Rule, which are completely unmoored from reality. And as the targets of these gestures seek to evade the seizure of their wealth, you will be told to support an ever-expanding range of government powers to pin them down and block off the exits.
To read a related article, click here.
To read another article by John Hayward, click here.
Posted by Brett at 5:25 PM