Yesterday, in what may be more accurately described as a campaign speech for the 2012 election, President Barack Obama offered a deficit reduction plan that included $1.5 trillion in additional taxes. The campaign metric was revealed by a senior administration official who briefed reporters Sunday night. “The president will make clear he’s not going to support any plan that asks everything of some Americans, nothing of others,” said the unnamed official. “He will veto any bill that takes one dime from the Medicare benefits seniors rely on without asking the wealthiest Americans and biggest corporations to pay their share.” Other advisers further noted that yesterday’s speech was not one aimed at finding a bipartisan solution for deficit reduction, but an “ideological statement” about how the president himself would like to tackle America’s burgeoning debt crisis. The ideology? Another of the president’s seemingly endless efforts to stoke class warfare.
The tactic here is obvious, and it has little or nothing to do with solving America’s jobs crisis. The administration itself has been forced to admit that unemployment will remain above 9 percent through next year’s election, a monumental political concession when viewed through the prism of a president seeking another four years. It doesn’t get any better when surveys reveal that Mr Obama’s highly anticipated pivot to jobs, embodied by the American Jobs Act, has already been rejected by a 51 percent of the public, who doubt that it will dent that same unemployment rate. Add the whopping 62 percent of Americans who disapprove of the president’s handling of the economy, and the nature of this current effort becomes clear: if Barack Obama cannot successfully transfer the blame for a stagnating economy to the Republican Party, he’s toast in 2012.
Thus, we get an administration taking one of the oldest pages out of the Democrats’ playbook and running with it once again. In his speech yesterday, the president stayed true to form. “We can’t just cut our way out of this hole. It’s going to take a balanced approach,” he said. “It’s only right that we ask everyone to pay their fair share.”
It is surprising that the president still uses the word “everyone.” Everyone is nothing more than a euphemism. If everyone were paying their fair share, it stands to reason that the 47 percent of Americans who pay no income taxes at all would be asked to contribute some percentage of income taxes to the upkeep of the country. As for “fair share,” IRS data reveals that the top 1% of earners pay 38% of all federal taxes and the top 5% pay 58% of all federal taxes.
Yet that didn’t stop the president from proposing the Buffett Tax, which calls for a 4.5 percent surtax on people making $1 million or more. It was named after billionaire investor Warren Buffett, who wrote an editorial for The New York Times bemoaning the fact that he pays taxes at the lower capital gains rate of 15 percent, while regular Americans are subjected to higher income tax rates. One day later, MSNBC political commentator Patrick Buchanan challenged the Oracle of Omaha. “I’m a little fed up with these people who come on, you know, their big op-eds, all these admonitions,” said Buchanan. “Why doesn’t he set an example and send a check for $5 billion to the federal government? He’s got about $40 billion.”
Oddly enough, Buffett did make a $5 billion contribution — to Bank of America, which yielded a profit of $280 million in 24 hours. There have been no reports of Mr. Buffett making any voluntary contributions to the public fisc to date.
Yet even Buffett Tax rhetoric could not obscure the reality that a substantial portion of the president’s proposed $1.5 billion dollars in tax increases on “millionaires and billionaires” would come from repealing the Bush-era tax cuts for couples making $250,000 or more. Why that particular level? Once again, IRS data reveals that 4.4 million American households earn more than $200,000, while only 319,000 families report $1 million or more of income earned. In other words, that’s where the bulk of the revenue is.
Unsurprisingly, Republicans were opposed to the hikes. “By raising taxes on job creators, Obama may win back some support from disgruntled liberal voters, but America will lose even more sorely needed jobs,” said Republican National Committee Chairman Reince Priebus. “Pitting one group of Americans against another is not leadership,” said House Speaker John Boehner (R-OH). “Veto threats, a massive tax hike, phantom savings and punting on entitlement reform is not a recipe for economic or job growth–or even meaningful deficit reduction,” explained Senate Minority Leader Mitch McConnell (R-KY).
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