President Obama took to the Rose Garden podium on Monday to unveil the latest in his series of misleading and unpopular plans to fix the stalled economy. Now he wants another $1.5 trillion in government coffers from higher taxes, and he’s waging class warfare to get it.
Taxes on working Americans and small businesses would go up under the guise of punishing the president’s favorite villains: the nation’s investors and job creators. “Middle-class families shouldn’t pay higher taxes than millionaires and billionaires,” said Mr. Obama “That’s pretty straightforward.” The new “Buffett Rule” concept is named in honor of billionaire investor Warren Buffett, who says he pays a lower tax rate than his secretary.
But it’s not so: Mr. Buffett is doubly taxed. He paid the highest tax rate of 35 percent on his income. In turn, he invested that money, taking the associated risk, and paid a capital-gains tax on any earnings. His secretary, who Mr. Buffett pays $60,000 a year, is taxed at a lower rate on just her income. The size of Mr. Buffett’s deductions is no excuse to raise rates on everyone else’s capital.
Mr. Obama’s speech railed against the Americans for Tax Reform (ATR) no-tax pledge, which stands in his way.
“The president just endorsed raising the capital gains tax from 15 to 35 percent,” ATR President Grover Norquist told The Washington Times. “If the market believed the president was powerful and would actually enact this whole speech, then the market would be collapsing because a 35 percent capital-gains tax would be devastating,” he said.
The White House plan has eight pages on tax reform but not a single word explains how the Buffett Rule would be enacted. The U.S. tax code does not have an income bracket for millionaires and billionaires, and Mr. Obama does not propose rewriting the tax code to isolate out those people.
So what he really is trying to do is raise taxes on income over $200,000 a year. Hiking the upper-income marginal tax rate is a direct tax on more than half of all small-business income in the country.
All this is pointless. Say Mr. Obama taxed everyone who made over $1 million at 100 percent of their income. That would bring in $727 billion, which only covers the cost of government for nine weeks. After confiscating their money, Mr. Norquist asked wryly, “Do you really expect them to show up next year and earn the same amount of money knowing you are going to take it all?”
As for Mr. Obama, Mr. Buffett and their uber-wealthy buddies who want to give more of their money to the government, it’s quite simple. The Treasury Department established a special account in 1843 called “Gifts to the United States.” There’s no need to raise taxes if these guys just want to give more to Uncle Sam.
Emily Miller is a senior editor for the Opinion pages at The Washington Times.