If we were not in the middle of the worst recession since World War II and facing debt peril, President Barack Obama’s recent ploy about deficit reductions and taxes could be dismissed as one more wily politician assuming public gullibility. Disgraceful, of course, but not disastrous.
But considering the possible consequences — prolonged and increased joblessness, dropping incomes, Greece-style crisis in America — the self-serving, re-election sleight-of-hand at the expense of others, namely all of us, puts Bernie Madoff to shame.
Start with the war on millionaires. It seems that billionaire investor Warren Buffet takes his income from capital gains rather than a salary and therefore pays a lower tax rate than his secretary, proving nothing. The average earner of $1 million or more a year pays 29.1 percent in all federal taxes, while the average person earning between $50,000 and $75,000 pays 15 percent. Almost half of American workers pay only the payroll tax, and many receive offsetting payments from the Earned Income Tax Credit.
Never mind. Buffet gives the demagogic, envy-mongering Obama excuse enough to demand these supposed millionaire free-riders pay their “fair share” in helping to address our deficit problems even though it is unlikely any plan would have more than minimal deficit impact.
What’s more, even Obama has himself said that raising taxes in the middle of a recession could worsen it, which isn’t stopping him from other grab-it-while-you-can plans.
He wants to raise income taxes on couples earning more than $250,000 and end deductions for oil companies that are reported by the Heritage Foundation to pay higher marginal tax rates than other businesses in Standard and Poor’s 500. Guess what the non-partisan, widely trusted Congressional Research Service has said about such a slam on Big Oil? It could lead to less exploration, development and production, cause gas pump prices to rise and — here we go again — have a “small effect” on the deficit.
It’s the spending, stupid
Meanwhile, the Washington Post reports that half the money has been pumped out to little avail on a $38.6 billion solar-panel subsidy program that was meant to produce 65,000 jobs and has so far created 3,545. While tax reform is definitely needed, raising taxes just takes money out of the private economy another way. The main issue is something else. It’s the spending, stupid.
To his credit, Obama does talk about action on farm subsidies, but then comes some grotesque trickery. He says he will do nothing to fix entitlements if Republicans do not give him his tax hikes, which is in effect saying that he will punish this country even more if the Republicans do not concur with the punishment he already has in mind. They won’t, of course, and that gives him a campaign issue as our Social Security and Medicare problems eat us alive.
Even though an ex-adviser agrees with many conservatives on ways to fix Social Security with virtually no pain for anyone, Obama (along with the GOP) has been a scurrying scaredy-cat on the issue, and his solutions to Medicare are no solution at all. He aims to force drug companies into lower prices, meaning they will have less incentive to continue producing far more lifesaving drugs than the profit-hammered drug companies elsewhere in the world.
The need, finally, is for statesmanlike, non-partisan, serious, adult, long-term, revenue-raising, substantive tax reform that very well could win Republican hearts. The need is for meaningful entitlement restructuring that keeps those programs intact without wrecking everything else in the budget. The need is for spending reductions ending waste and the superintendence of all us dumb bunnies by much dumber bunnies while helping to restore business and consumer confidence and end this recession.
What’s really needed is leadership, not reckless, utterly reprehensible populism.