United Liberty

During his State of the Union address, President Barack Obama telegraphed his intent to wage class warfare against the rich, hoping to revive the populism that helped put him in office at the height of the financial crisis.

Obama once again pushed for the so-called “Buffett Rule” — after Warren Buffett, who pays a higher tax rate than his secretary. The rule would tax individuals making over $1 million at a higher rate, out of “fairness.”

Writing at the Wall Street Journal, economist Stephen Moore asks President Obama about “fairness,” taxes, and his economic policies that discourage success:

President Obama has frequently justified his policies—and judged their outcomes—in terms of equity, justice and fairness. That raises an obvious question: How does our existing system—and his own policy record—stack up according to those criteria?

Is it fair that the richest 1% of Americans pay nearly 40% of all federal income taxes, and the richest 10% pay two-thirds of the tax?

Is it fair that the richest 10% of Americans shoulder a higher share of their country’s income-tax burden than do the richest 10% in every other industrialized nation, including socialist Sweden?

Is it fair that American corporations pay the highest statutory corporate tax rate of all other industrialized nations but Japan, which cuts its rate on April 1?

Is it fair that President Obama sends his two daughters to elite private schools that are safer, better-run, and produce higher test scores than public schools in Washington, D.C.—but millions of other families across America are denied that free choice and forced to send their kids to rotten schools?

Is it fair that Americans who build a family business, hire workers, reinvest and save their money—paying a lifetime of federal, state and local taxes often climbing into the millions of dollars—must then pay an additional estate tax of 35% (and as much as 55% when the law changes next year) when they die, rather than passing that money onto their loved ones?
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Is it fair that after the first three years of Obamanomics, the poor are poorer, the poverty rate is rising, the middle class is losing income, and some 5.5 million fewer Americans have jobs today than in 2007?

We’ve discussed Obama’s misguided tax policies and desires here before. He rails about “fairness,” but doesn’t talk about how the “Buffett Rule” wouldn’t impact someone like Warren Buffett, who makes his money largely off of investments. The Council on Foreign Relations (CFR) illustrated this yesterday in a chart (below) showing that the United States tax code is already the most progressive of OECD countries.

By the way, that’s not an endorsement of our current tax code or structure. We need simplification/reform and a broad tax base, but it has to promote economic growth and productivity at the same time.

And it total sum of the tax hike would cover about a week’s worth of spending in Washington. So this isn’t about tax policy, budget deficits, or “fairness,” it is, however, about Obama’s re-election.