Why soaking the rich won't work
The Kansas City Star
“I won’t tax you and I won’t tax me, I’ll tax that fella over behind that tree.”
So goes the saw about how politicians foist new taxes on their constituents. President Barack Obama would have us believe that his tax proposals are all about taxing the “rich” so the rest of us can enjoy the fruits of their money while only they feel the pain.
But Obama and truth rarely inhabit the same zip code, especially in an election year. So who is really behind the tree?
Obama has spent the last three years running the nation’s deficit from roughly $10 trillion to roughly $15 trillion today. And to what end?
America’s credit rating has been downgraded once and may well be downgraded again. We are bumping up against the national debt ceiling — again. And the president’s reckless spending, plus his ongoing regulatory assault on business, has led to continued high unemployment and the weakest economic recovery in our history.
So who will pay for this president’s political agenda? Not the “rich.” They can’t.
The White House has estimated the nation’s deficit for 2011 fiscal year alone at $1.37 trillion. Forbes magazine estimates that the entire net worth of the 400 richest U.S. citizens is $1.33 trillion. If the Obama administration confiscated all of their assets — everything — that would barely cover America’s projected 2011 deficit.
So what about next year’s deficit? What about a few years after that when the spending floodgates of Obamacare are fully open?
That brings us to Obama’s latest scam, the so-called “Buffett rule.” Every American making more than $1 million a year would pay a minimum 30 percent income tax.
When announcing this proposal, Obama said it could raise enough money to “stabilize our debt and deficits for the next decade.” Yet the Treasury Department estimates that the rule would raise no more than $5 billion a year.
That’s less than 0.5 percent of the projected 2012 deficit, and just 0.1 percent of the $45.43 trillion the government is projected to spend during the next 10 years.
When questioned about these revenue gaps, the White House flip-flopped — OK, evolved – and said the Buffett rule was really about “tax fairness.” In fact, the “rich” already pay a percentage of the country’s personal tax collections that is about twice their share of the country’s personal incomes. That’s fair? Fair or not, soaking the “rich” simply will not pay for Obama’s excesses.
So who foots the bill? Who is standing behind Barack’s tax tree?
None other than the middle class — people like you and me.
History shows that any tax that targets the “rich” ultimately ends up on the backs of the middle class. That’s why Obama talks about wanting to help people join the middle class.
More sheep to shear — that’s where the big bucks are from a tax standpoint.
A case in point is the Alternative Minimum Tax. Originally a tax on the “rich,” it was (deliberately?) not indexed for inflation and now hits millions of middle-class taxpayers each year.
So who will pay for the runaway costs of Obama’s agenda? The dean of the Columbia Business School recently estimated that within a few years taxpayers with incomes under $200,000 a year will face an average tax increase of 11 percent to pay for Obama’s excesses.
You may be among those who believe Obama’s vision of nirvana in America. But be careful what you wish for.
Like most of what Obama promises, you probably will never get it. But you most certainly will end up paying for it.
Stephen Brewer operates his own business providing marketing research and marketing consulting to law firms in the U.S. and Canada. Reach him by email at firstname.lastname@example.org or write to Midwest Voices, c/o Editorial Page, The Kansas City Star, 1729 Grand Blvd., Kansas City, Mo. 64108.