If you listen to the Obamacrats, letting the Bush tax cuts expire on 1 January 2013 will only impact “the rich,” so middle-class people should cheer them expiring.
Over at SmartMoney, however, they explain several reasons that just about everyone will see a negative impact if these tax cuts are allowed to expire. I’ll focus on just two.
Yep, the President who loves to trash rich people is actually one himself:
The disclosure statement lists assets and liabilities in dollar ranges, so pinpointing the president’s net worth is difficult. His assets appear to tally between $2.6 million and $9.9 million. He holds a mortgage on his Chicago home of $500,000 to $1 million.
Earlier today, Speaker John Boehner spoke to the Peter G. Peterson Foundation’s 2012 Fiscal Summit. Here’s a few of the highlights of his plan from the Speaker’s website, along with commentary, of course (emphasis in original):
In remarks this afternoon to the Peter G. Peterson Foundation’s Annual Fiscal Summit, House Speaker John Boehner (R-OH) will renew his commitment to the principle he set forth at the Economic Club of New York one year ago – noting that the debt limit exists to force Washington to deal with its fiscal problems, and that any increase in the nation’s debt limit must be accompanied by spending cuts and reforms larger than the amount of the debt limit hike.
Yes, you read that right…
Government Motors General Motors paid zero taxes, and because of fancy bookkeeping their tax rate was actually negative.
General Motors, in particular, paid less than zero taxes of 2011. And when the Administration brags that GM reported a $7.6 billion profit in 2011, conservatives are quick to note the profits include roughly $100 million in the form of a tax benefit document in GM’s annual report (p. 51) — and, thus, massive untaxed profits.
The outcome: GM paid a negative tax rate, around -1.5%, because of a decision allowing some of the bailout recipients, GM, AIG, and Citi, to avoid actual losses, but to still claim those losses for tax purposes.
A lot has been said about the Buffett Rule, here and around the blogosphere, and I’ve come to the conclusion that it illustrates a serious blunder on Obama’s part. He made the discussion about tax rates, and therein lies the danger for him.
By talking about rates, he not only opens himself up to discussions of whether or not he himself paid the same rate as his secretary, he also opened up the discussion of other tax plans such as the Fair Tax and the various Flat Tax proposals out there (including Heritage’s and FreedomWorks‘)*. And if Obama wants to make the discussion about fairness, what could be fairer than everyone paying the same rate?
However, the idea of everyone paying the same rate is anathema to a hard-line lefty like Obama, because their real goal is to use the tax code to punish those who have the drive to succeed and become wealthy. Of course, they except their friends on the left (Kennedys, Kerrys) in favor of attacking those on the right who’ve made their money the hard way (Kochs).
When someone like Obama says “the rich” should pay “their fair share,” to them they mean a higher rate than others (note that the Buffett Rule proposes a 30% rate for the rich, when they claim that his secretary only pays a 25% rate. This is where the danger lies for Obama: when the average voter thinks “fair,” they think along the lines of “everyone pays the same rate.”
Unfortunately for Obama, the discussion on rate was pretty much preordained for his discussions on taxes, because he certainly couldn’t talk about absolute tax payments in real dollars. If you compare what Warren Buffett paid in dollars to what his secretary paid in dollars, it would be apparent how much more the rich pay and he’d have been laughed off the stage.
We have a good chance to laugh him off the stage again. What we need is for the candidates, not only for President but for Congress, to hammer home the point that true fairness is everyone paying the same tax rate.
*Please note, I am not saying I’m in favor of any of these tax plans, just pointing out that there are several proposals out there where everyone pays the same basic tax rate.