Hollywood is the land of make-believe. So it’s fitting that President Obama found himself at the House of Blues on Monday night to tell wealthy, liberal donors that taxes need to go up to save the economy. “We can’t just cut our way out of this problem,” Mr. Obama said. “We’ve got to have some revenue.”
Reading from a script that would be best classified as fiction, Mr. Obama spun a gut-wrenching tale of envy and greed. “I’ve been incredibly blessed,” intoned “The One.” “I shouldn’t be paying a lower effective rate than a teacher, or a firefighter, or a construction worker.” It’s quite the tear-jerker, and it’s quite untrue.
Mr. Obama’s net income in 2010 was $1,795,614 from huge book royalties and his $395,188 government salary. He paid $453,770 in federal taxes, making his effective tax rate 25 percent. Using the most recent Labor Department and Internal Revenue Service data, the construction laborer’s tax rate is 10 percent on a salary of $33,590, the firefighter’s is 10.6 percent on $47,730 and the middle-school teacher’s is 11.6 percent on $54,880.
In other words, Mr. Obama’s tax rate is double that of the average working-class Joe. “The reason that Obama likes to say ‘tax the rich’ is the same reason that magicians like to distract you while they steal your wallet,” explained Americans for Tax Reform president Grover Norquist. “There aren’t enough billionaires to raise an interesting amount of money. He intends to hit a broad base of millions of Americans with significant tax increases.”
That tax hike supposedly would pay for the president’s new jobs stimulus bill. Harvard economist Martin Feldstein released a study that showed this plan would cost a whopping $200,000 per job created, and ultimately hurt the economy. “A few people would benefit from the specific jobs but the rest would be affected negatively by a concern that debt would rise,” Mr. Feldstein told The Washington Times. “The increased debt would continue to reduce household confidence and therefore consumer spending.”
Treasury Secretary Timothy F. Geithner told ABC News that Mr. Feldstein’s numbers are right, but, “If the alternative plan is to sit there and say we’re going to cut our way out of this by just cutting spending, that would make the economy weaker. Or we’re going to sit here and just complain about regulation.”
The economics professor was in disbelief when The Washington Times repeated Mr. Geithner’s words. “I would be surprised if he really said no jobs would be created by cutting regulations,” Mr. Feldstein said. “Legislation to cut future spending would give the market confidence that the economy is not going to face a future crisis. It would also mean less future taxation to service the resulting debt.”
Mr. Obama’s latest effort to tax, borrow and spend the country into prosperity may play well at a Tinseltown fundraiser, but the rest of us aren’t about to buy into the sequel to last season’s massive $825 billion stimulus flop. America needs lower taxes and less regulation, not more of the same.
Emily Miller is a senior editor for the Opinion pages at The Washington Times.