Once again I was listening to President Obama’s Saturday radio address and I had to turn off the radio. You know, when he was elected I was disappointed, but the one thing I thought might be nice is that he seemed to be a good speaker, so I figured listening to his speeches would be good, particularly since Bush was difficult for me to listen to (although he made some brilliant speeches, like his speech at the UN). However, Obama is such a bullshit artist, such a demagogue, that I can barely tolerate him. Plus, even his speaking style has grown tiresome.
All that aside, it is things like this that infuriate me when I hear him speak:
“The truth is, you can’t solve our deficit without cutting spending. But you also can’t solve it without asking the wealthiest Americans to pay their fair share – or without taking on loopholes that give special interests and big corporations tax breaks that middle-class Americans don’t get.
“It’s pretty simple. I don’t think oil companies should keep getting special tax breaks when they’re making tens of billions in profits. I don’t think hedge fund managers should pay taxes at a lower rate than their secretaries. I don’t think it’s fair to ask nothing of someone like me when the average family has seen their income decline over the past decade – and when many of you are just trying to stretch every dollar as far it it’ll go.”
“But you also can’t solve it without asking the wealthiest Americans to pay their fair share…” 49% of Americans pay NO federal income tax. This cartoon (which I posted a few days ago) perfectly expresses what Obama is saying:
The top 5% of people pay over 40% of the income tax in this country, the top 10% paid 70%. Put another way, the top 10% of earners pulled 70% of the burden, leaving just 30% for the other 90% of Americans. Let’s keep in mind that half of the population had little or no income tax burden at all, and that a portion of those people actually went the other way and got money.
This “Paying their fair share” argument is disgusting. What is the fair share for the top 5%? Should they pay 90%?
The other thing is that it completely ignores the economic impact of the government taking money away from economic producers–people who run businesses and invest in businesses, and spend money in businesses, and put money in banks so it can be loaned to others–and giving it to the government (which produces no wealth and is a black hole of waste and inefficiency). Obama clearly believes that government is more important than the private sector. He occasionally says something about businesses being important, but his actions and the bulk of his rhetoric tell us that he is ignorant of the fact that it is those who produce in the private sector that make any government spending at all possible. No wealth creation = no money to government. In his mind, apparently, the tables have turned and it is government that ALLOWS private sector wealth creation.
“I don’t think oil companies should keep getting special tax breaks when they’re making tens of billions in profits.” First of all, the word “special” is put in there to mislead. Most of the tax breaks for oil companies this administration decries are common tax breaks for all businesses, or tax breaks specific to those businesses that mine natural resources (put in place back in the day when the government thought productivity and economic growth was actually a good thing). What he’s actually talking about is making the LACK of these tax breaks special just to oil companies.
The billions in profits are due in large measure to the fact that the government will not allow oil companies to spend money on R&D–which in this case means trying to find and then drilling for new oil, and providing the infrastructure necessary (pipelines and refineries, for example) to bring the product to market. When government roadblocks result in fewer expenditures for a company (expenditures they’d be happy to make and that would make an enormous impact on the overall economy, even beyond lowering the price of fuel), you can’t then complain that those companies have too much profit. They would love to spend some of that profit, but you won’t let them, Mr. President. Spending it would have a huge and positive economic impact, but you will not allow that, even though your mouth occasionally moves and the words “jobs” and “energy” come out.
“I don’t think hedge fund managers should pay taxes at a lower rate than their secretaries.” This is because Obama doesn’t understand the difference between a salaried employee and the person taking risks and making their income only when those risks pay off. The rate may be lower for the hedge fund manager, but the total paid is enormous compared with what his secretary pays (here’s the math for Mr. Obama: assume the secretary is a highly paid secretary making $50,000 and her tax rate is–I’ll go high here to prove the point–50%, so she pays $25,000 in taxes; the hedge fund manager makes $1 million in capital gains–I’ll go low here to prove the point–at a 10% capital gains rate he pays $100,000 in taxes). The economic impact of the hedge fund manager’s job is enormous compared with the economic impact of the secretary’s job. I’m not even a fan of the hedge fund managers of the world, but I understand that they are paid not a salary, but as a result of capital gains, meaning they’ve invested and made money. If you pull away the incentive by taxing capital gains at the same rate as salary income, what will you get less of? Investment and risk. How will that impact the economy and job creation when less money is being invested and fewer financial risks are being taken?
By the way, we all know that he says “hedge fund managers” because, of all of the people on Wall Street we’ve been taught to hate, those are the lowest of the low. But what he really means is taxing investors of all kinds. He’s talking about raising the capital gains rate. You know this is true because if he was talking about salary on salary, income tax rate on income tax rate between a person making a lot of money versus a secretary who is undoubtedly in the lower brackets, what he is saying could not possibly be true. Take a doctor who is making half a million dollars per year but it’s pure salary, versus his secretary. Is there any way that someone could say the doctor is paying less than his secretary when the rates are progressive? He’s talking about capital gains rates. Raising them, by the way, will hurt everyone, including middle class people who eventually sell assets such as any stock they’ve purchased or their homes. Increasing capital gains rates is a disincentive to invest, which means less economic activity and fewer jobs.
“I don’t think it’s fair to ask nothing of someone like me when the average family has seen their income decline over the past decade – and when many of you are just trying to stretch every dollar as far it it’ll go.” Here again we have the static view of income utilizing percentage of population (a myth exploded multiple times in a variety of writings by Thomas Sowell). This assumes that person A has literally had his income decline over a ten year period. The truth is that if person A has been a productive person, his income has increased. However, more people who are unproductive have not gained at all, not as much, or have gone backward. There are several tricks in this. First, nobody really knows anyone who is working at the same job who has had their income decline. The trick is that when the economy declines there are more people who lose their jobs (and some that do have to take a cut in pay or a cut in hours if they are hourly workers). But why does the economy decline? Could it be that government policies have something to do with it? Could it be that people who lost their jobs have fallen into the government safety net and found it comfortable there, that they are able to live on less money as a trade-off for not having to work? Ever hear of “fun-employment” (people kicking back on unemployment and lovin’ life as they get money without working)? We have a government that generates disincentives for investment and job creation, while providing incentives for slacking, and then the guy in charge of all of it talks about declining wages like it’s the private sector’s fault, and somehow it will be cured by more taxes on the most productive people. How in the hell do higher tax rates on upper income people translate to higher wages for the middle class? In what world are those two things related, other than by implication from Obama’s rhetoric? What is related is more government intervention in the private economy and decreasing earnings, and that includes tax rates, regulations, and government programs, along with spending at a rate that scares the living crap out of anyone who is thinking about trying to do anything positive in this economy.
Obama is a demagogue that utilizes deceit and deception to fool his fellow economic illiterates and I have a very difficult time listening to him.