Barack Obama, who became rich with his best-selling books, seems to have a problem with wealth creation. It isn’t in his lexicon, it isn’t on his agenda, and it isn’t in his campaign message.
He never talks about creating wealth, which should be at the heart of all economic growth incentives. Indeed, he wants to punish it by raising taxes on higher-income Americans to 40 percent and send that money to lower-middle income people in a refundable tax credit that will include sending checks in 2009 to 49 million tax-filers who pay no income taxes.
He doesn’t talk about risk capital formation, the lifeblood of a dynamic and growing economy, because he says he’ll tax that, too, with a higher capital gains and dividend tax on investors and savers and many retirees. He even ridiculed Joe Wurzelbacher after the Ohio plumber asked the freshman senator if he would be hit by higher tax rates under his economic plan. Joe could teach Mr. Obama a few things about the importance of wealth creation and encouraging investment capital, something he must have missed in Economics 101 at Harvard.
John McCain has been championing Joe Wurzelbacher’s story on the campaign trail this week to illustrate the negative impact Mr. Obama’s income tax increases will have on Joe’s dream to buy the small plumbing business that employs him. Millions of other Americans have the same dream, too, but that would put them into the income bracket Mr. Obama will tax the most.
When the burly, blue-collar worker asked Mr. Obama at a campaign rally last week whether his “new tax plan is going to tax me more” if he bought the business that would bring him about $250,000 or more in income, he was told it would. But Mr. Obama - who calls American free enterprise capitalism “trickle down economics” - said he has to tax Joe more and millions like him in order to “spread the wealth around.”
It’s clear what he meant. He calls it a tax cut to help the economy grow, but he is pursuing the left’s long-sought goal of redistributing the nation’s wealth by taking more money from the top 5 percent of all earners (who pay 57.13 percent of all income taxes) and distributing it to those who are taxed at a lower rate or are not taxed at all.
Mr. Obama wraps ideas like this in the mantle of “change,” but it’s hardly a new idea. That’s what Democrat Huey Long, the demagogic Louisiana senator, preached in the 1930s, with his radical “share the wealth” campaign and his relentless class warfare attacks on the rich.
Mr. Obama’s economics have a lot in common with Huey Long, as we saw last week as he ridiculed Mr. McCain and Joe the plumber’s desire to create wealth by running his own business.
“How many plumbers do you know who make $250,000?” Mr. Obama sarcastically asked a crowd the day after his third debate when Mr. McCain made Joe the symbol of the harm Mr. Obama’s tax increases would inflict on America’s budding entrepreneurs.
Actually, lots of plumbers make that much and more in small business enterprises that install new plumbing in renovated kitchens and bathrooms. That Mr. Obama is ignorant that many plumbers make that much shows how truly “out of touch” (the charge he hurls at Mr. McCain) he is with common everyday life among working Americans.
The National Federation of Independent Business, the small business lobby, says there are 16 million small businesses, and 75 percent of them filed as individual taxpayers, just as you and I do. And millions of them will be slapped by Mr. Obama’s higher income tax rates that will jump to 36 percent from 33 percent, and to 39.6 from 35 percent.
These are the businesses that create the lion’s share of the new jobs and the firms that will grow into the giant enterprises of tomorrow. How do we create jobs, wealth and growth by taxing them - during a recession of all times. If you are starting to get the idea that maybe Barack Obama doesn’t know any more about economics than Huey Long did, consider this.
When asked last week about Mr. McCain’s proposal to temporarily slash the capital-gains tax rate in half to unlock much needed capital investment, Mr. Obama ridiculed that, too. “I don’t know anybody, even the smartest investors, who right now are going to be experiencing a lot of capital gains,” he told reporters.
But billionaire Warren Buffet, one of Mr. Obama’s economic advisers, just brought $5 billion in General Electric stock, knowing that when the stock markets recover, his investment will yield him a very hefty capital gain.