There are many valid reasons for voting to unseat Barack Obama as president, not the least of them unsettling statements like the one he made on Monday in which he intimated that keeping tax rates at their current levels is a form of government spending. From CNSNews.com:
Announcing his budget plans for fiscal year 2013 in an address at Northern Virginia Community College in Annandale, Va., President Barack Obama characterized the current income tax rates—signed into law by President Bush a decade ago—as a form of government spending.
Essentially, the president said that the federal government ‘spends’ when it does not raise taxes.
‘Right now, we’re scheduled to spend more than $1 trillion more on what was intended to be a temporary tax cut for the wealthiest two percent of Americans,’ Obama said. ‘We’ve already spent about that much. Now we’re expected to spend another $1 trillion. Keep in mind, a quarter of all millionaires pay lower tax rates than millions of middle class households. You’ve heard me say it: Warren Buffett pays a lower tax rate than his secretary.’
Putting aside his citation of the beyond-merely-tiresome and wholly fictitious “Buffet Rule,” the president’s remarks betray either a worrisome ignorance of even the most basic tenets of economics or a disingenuousness that is equally dismaying.
I don’t doubt that he believes in the rightness of his ideas—that “investing” in green energy and making college affordable, for example, are among the most pressing issues currently facing us as a nation and a people. But I question whether he really subscribes to the view that raising taxes on the rich to pay for these lofty initiatives comes without a price.
Ralph R. Reiland, who teaches economics at Robert Morris University, wrote an op-ed in today’s Pittsburgh Tribune-Review that addresses the economic folly in one of Obama’s bleed-the-rich scenarios: his proposal to double the capital gains tax. Writes Reiland:
It's not hard to understand the disincentives to job creation in this proposal. If the government wants more people to quit smoking, it increases the taxes on cigarettes. Similarly, if the government wants more people to quit investing, the appropriate policy is an increase in taxes on investment income.
But as Reiland notes, Obama’s real motivation in increasing capital gains taxes isn’t to finance dreams of the kind enumerated earlier. They are meant to serve another agendum:
Candidate Obama was asked by Charlie Gibson [n a presidential debate during the 2008 campaign] why he supported an increase in the capital gains tax rate, given the clear historical record that repeatedly shows the government losing revenue as a result.
Replied Obama, ‘Well, Charlie, what I've said is that I would look at raising the capital gains tax for purposes of fairness.’
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