If any doubts still existed about President Barack Obama’s true intentions toward the country’s economy, they should be entirely dispelled by his latest campaign to extend the Bush-era tax cuts for some taxpayers, but not for others. He wants those rates extended for the so-called “middle class,” but not for what Mr. Obama (and Democrats) like to call “the rich” – i.e., taxpayers who declare $200,000+ a year in income ($250,000+ for married couples).
The Bush tax-rates are set to expire at the end of 2010. If that happens, rates will revert to 2000-levels on income, dividends, capital gains and inherited wealth (i.e., the Death Tax). Absent any action by Congress and Mr. Obama, the rate-reversion will touch every taxpayer in the country. It will amount to the largest tax-increase in history.
Mr. Obama has tried mightily to frame the tax-issue in rhetorically clever – even deceptive – ways, but voters and legislators are not buying it. They are wise to the shtick. In one version of alternate reality, the president calls reversion to the 2000 rates the “Bush tax increases” – which he magnanimously offers to reduce for “working people.” He characterizes higher-income earners as “millionaires and billionaires” who don’t need to have their taxes cut. His favorite line is that we “can’t afford” the $700 billion cost of freezing the Bush-rates for higher-income taxpayers, while failing to mention that freezing those rates for the lower-income people would “cost” over $3 trillion, over a 10-year period.
Delicately unmentioned in all this is the proven fact that lower tax-rates always produce more revenues, while higher rates always retard revenues – ultimately producing less than the CBO projections. Although it is hard for liberals to believe it, taxpayers actually take steps to reduce their tax-burdens.
This class-warfare hustle also ignores the reality that many $200K-plus earners are small-business owners who run their entire business-income through their personal tax returns. This makes them look like high-rollers, but in fact this is “gross,” not “net” income for them. Subjecting these individuals to higher rates, based solely on their gross receipts, would be (how else to say it?) a gross inequity.
Raising taxes for small businesses during a recession – or even during a very slow recovery – is not recommended by any reputable economist, since small businesses currently create half of all new jobs in our economy. The net effect will be to crush the engine of job-creation at a time of maximum need for the country. This is Dummkopf-governance to the nth power.
Republicans have seized on extending the Bush tax-cuts as a strong defining issue for the November elections. They have pushed for legislation to extend the Bush rates for all taxpayers and all types of income. Numerous Democrats, particularly in the House of Representatives, also support such legislation. The defection of her own party-members has prompted Speaker Nancy Pelosi to block any tax-bill from reaching the House floor. Even the bill Mr. Obama desires cannot be allowed to advance, for Mrs. Pelosi knows that amendments extending the Bush-rates, across the board would be added. With Democrat support, the amended bill would certainly pass, inflicting a major defeat and embarrassment on both Mrs. Pelosi and the president on the very eve of the midterm elections.
With all this political uproar going on, then, why does Mr. Obama not simply recommend a one- or two-year extension of the Bush cuts, in their entirety, and put this contentious issue aside before the elections? That is the $64-question (as we used to say, back when $64 was still significant money). A clear majority of Americans want the Bush tax-rates extended – including significant numbers of Democrats. Mr. Obama is flying solo on this one. Why is that? – especially when his party seems headed for the Valley of Death in the coming elections.
The $64 zillion answer is that Mr. Obama is not about “fixing” the economy – not, at least, in the sense that most Americans want to see the country’s economy recovering, growing, putting people back to work, and restoring prosperity. Mr. Obama makes politically expedient noises about accomplishing those things, but his actions belie any such intention. If he wanted to get the economy going again, he would extend the Bush tax-cuts (perhaps indefinitely), lay on some “ruffles and flourishes” of his own with new cuts to spur investment and business expansion, and ditch all actions that punish creators of new jobs. He has access to plenteous counsel that would help him to get the private sector moving ahead.
As is now plain to see, Mr. Obama is neither a free-market leader, nor a messiah, nor a wizard who knows how to fix an ailing economy. Far from any of that, he is an ideologue committed to “transforming” the United States of America into a socialist economy in which wealth-redistribution is accomplished via government fiat. Clearly, he and his inside counselors see a crippled economy – featuring permanently high unemployment and depressed wages – as a valuable tool for convincing frightened citizens that his kind of transformative change is their only hope for the future. They are playing “chicken” with the huge, looming tax-increase to accomplish a key part of their political agenda.
Mr. Obama has been touring round the country, speaking to crowds of union workers in factories, and hosting backyard rap-sessions, in a valiant attempt to convince voters – whom he must consider borderline retarded – that everything is on the upswing, with nothing but blue skies ahead as far as the eye can see. He plainly considers Tea Party denizens to be traitors, racists and ignorant haters. His vice-president, the estimable Joe Biden, tells Democrats to “quit whining” and get out there and campaign to help their party retain control of the Congress. Never, in my experience, has such a dismal economy and poor record of governance been painted in such glowing, other-worldly hues. We live in amazing times.
Since the start of the Obama presidency, certain pundits have maintained that Barack Hussein Obama does not want to “restore” the economy. They say he wants to wreck it so he can “repair” it his way. Until now, I have resisted that cynical idea, but little by little I am coming round to it. All the smarmy “hope and change” promises and the “oh let’s give him a chance” excuses have run out. It looks very much like those pundits were right. If voters don’t strike a mighty blow in November against the liberal redistributionist machine of Pelosi, Reid and Obama, it won’t be just “chicken” any more. Our goose will be well and truly cooked.