President Obama supports higher taxes, but he usually claims he only wants higher tax rates on rich people. Heck, he promised back in 2008 that “no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.”
Obama’s other rhetorical trick is to claim he wants a “balanced approach.” Translated from Washington-speak to English, that means he wants more of our money. But it’s a soothing way to demand more money. After all, who’s against “balance”?
Over the last few years, President Barack Obama has pushed a so-called “balanced approach” to the deal with the out-of-control budget deficits that have become the status quo in Washington over the last four years — totaling more than $5.5 trillion. But James Pethokoukis notes that President Obama’s approach to dealing with budget deficits relies overwhelmingly on increase revenues to the federal government (ie. taxes hikes) than it does on spending cuts:
Obama says his budget would achieve $4 trillion in new savings, just like Simpson-Bowles. But he includes a lot of stuff in that $4 trillion that S-B do not. As the Committee for a Responsible Federal Budget points out:
To reach his $4.3 trillion in savings through 2021, the President’s budget counts $1.6 trillion (excluding interest) of already-enacted savings. In addition, it includes two elements which the Fiscal Commission assumed in its baseline – a drawdown of the wars ($740 billion through 2021) and the expiration of the upper-income tax cuts ($830 billion through 2021). If the Commission’s plan were scored the same way as the President’s $4.3 trillion, we estimate it would save roughly $6.5 trillion through 2021.
Compared to CRFB’s Realistic Baseline, we estimate that all new policies in the President’s budget would save nearly $2 trillion through 2022.
As much as we poke fun at Vice President Joe Biden for the crazy stuff he says, you have to hand it to him, he’s at least straightforward with his thoughts. He’ll tell you exactly what he’s thinking, no matter how wrong or foolish he may be.
The latest example came yesterday during a campaign rally in Iowa when Biden told supporters that his boss, President Barack Obama, does want to raise taxes by $1 trillion:
You know the phrase they always use? Obama and Biden want to raise taxes by a trillion dollars. Guess what? Yes we do in one regard. We want to let that trillion dollar tax cut expire so the middle class doesn’t have to bear the burden of all that money going to the super wealthy. That’s not a tax raise, that’s called fairness where I come from.
Here’s the video:
Well, it’s not quite $1 trillion in tax revenue that would come with raising taxes on families making over $250,000 — not merely the “super wealthy.” It’s close, but estimates are between $600 to $850 billion over 10 years. Biden can talk about sequestration cuts, the $1 trillion in spending he referenced, but those aren’t hard cuts, but rather cuts in the anticipated growth of spending. The revenues are also a drop in the bucket when one looks at the bigger picture of spending and budget deficits over the next 10 years. And frankly, $1 trillion in spending cuts is nowhere near enough.
I try to be self aware, so I realize that I have the fiscal version of Tourette’s. Regardless of the question that is asked, I’m tempted to blurt out that the answer is to reduce the burden of government spending.
But sometimes that’s exactly the right prescription, particularly for an economy weighed down by a bloated public sector. And, as you can see from this chart, the French welfare state is enormous.
Only Denmark has a bigger burden of government spending, but at least the Danes are astute enough to compensate with hyper-free market policies in other areas.
So is France also trying to offset the damage of excessive spending with good policy in other areas? Au contraire, President Hollande is compounding the damage with huge class-warfare tax hikes.
During a recent campaign rally, Vice President Joe Biden made a very honest admission. As you know, Biden is the type of guy who will tell you what’s on mind, many times to the detriment of his boss, President Barack Obama. But during the campaign rally, Biden told supporters that the middle class “has been buried for the last four years”:
Biden made the remark at a campaign rally while arguing that Republicans would raise taxes on the middle class. He said the tax hike would be especially bad given what the middle class has been through over the last four years.
“This is deadly earnest, man. This is deadly earnest,” the vice president said. “How they can justify, how they can justify raising taxes on the middle class that has been buried the last four years — how in Lord’s name can they justify raising their taxes with these tax cuts.”
Sigh. As a general statement, Republicans don’t want to raise taxes, and to say otherwise is just plain false. What they’re trying to do is maintain all current tax rates for all taxpayers. Sure, Republicans have a strong belief that tax cuts are good, but the reasoning in this instance is that increasing taxes — even just on higher-income earners — would hurt the economy. This is something in which Keynesians used to believe.
Mitt Romney’s campaign is, of course, seizing on the remarks, using them to point to the failures of President Obama’s economic agenda. The Hill notes that Biden later changed his comments to say that Republican ticket would take America back to economic policies that “buried” the middle class.
Keep telling me that the economy is getting better. Seriously, I know this something that is critical to President Barack Obama re-election bid — that businesses are hiring more and that there are all these encouraging mythical signs everywhere. Yeah, doesn’t seem to be the case according to a new report from Bloomberg, which notes that business activity has declined for the first time since 2009:
Business activity in the U.S. unexpectedly contracted in September for the first time in three years, adding to signs manufacturing will contribute less to the economic recovery.
The Institute for Supply Management-Chicago Inc. said today its business barometer fell 49.7 this month from 53 in August. A reading of 50 is the dividing line between expansion and contraction.
Uncertainties surrounding domestic fiscal policy and weakening economies in Europe and China may prevent companies from adding to headcount and ramping up production. Slow growth prospects prompted the Federal Reserve to announce more accommodation measures earlier this month in a bid to help spur the three-year-old expansion.
“The chain that links all this stuff together is just a loss of confidence as we head toward the end of the year in fiscal policy,” said Ward McCarthy, chief financial economist at Jefferies & Co. Inc. in New York, whose forecast of 50 was the closest in the Bloomberg survey. Businesses “have been cutting back on their investment spending.”
On Thursday, Fox News conducted a poll showing that the vast majority of Americans think everybody should pay some taxes:
A large majority of likely voters believes all Americans should pay some federal income tax — even if it is as little as one percent of what they make.
Seventy-nine percent say everyone should pay something, according to a Fox News poll released Thursday. That includes 85 percent of Republicans, 83 percent of independents and 71 percent of Democrats.
According to the IRS, last year approximately 41 percent of tax filers did not pay federal income tax. The Tax Policy Center estimates that will increase to 46 percent this year.
Republicans and independents are pretty similar on this point; Democrats are 14 points behind, but most of them believe it too. I think they agree for totally different reasons: Republicans want the poor to pony up something for the government services they keep consuming; Democrats still think the rich don’t pay their fair share. It’s all semantics, really; if we’re going to have taxes, everyone should pay them. Fair is fair.
Written by Michael F. Cannon, Director of Health Policy Studies at the Cato Institute. Posted with permission from Cato @ Liberty.
Why am I only hearing about President Obama’s gob-smacking “I haven’t raised taxes” claim today, and from Reason?
On CBS News’s “60 Minutes” Sunday night, President Obama said, “Taxes are lower on families than they’ve been probably in the last 50 years. So I haven’t raised taxes.”
As of Monday morning, neither the Washington Post’s Pinocchio-awarding Fact-Checker, nor the Annenberg Public Policy Center’s FactCheck.org, nor the Tampa Bay Times’ Pulitzer-Prize-winning Politifact.com had risen to this opportunity…
Unbelievable. I just checked those websites, and they still haven’t.
Fortunately, Ira Stoll has. He leaves out a number of taxes President Obama has enacted, though, including raising the Medicare payroll tax on high-income earners, applying the Medicare payroll tax to non-payroll income for high-income earners, limiting the tax exclusion for flexible spending accounts, increasing the penalties on certain health savings account withdrawals, the “Cadillac tax” on high-cost health plans…
Written by Daniel Ikenson, director of the Herbert A. Stiefel Center for Trade Policy Studies at the Cato Institute. Posted with permission from Cato @ Liberty.
Like too many other long-reigning fixtures on Capitol Hill, Senator Carl Levin (D-MI) doesn’t appreciate the magnitude of the challenge to the authority he presumes to hold over America’s job and wealth creators. Or maybe he does, and frustration over that fact explains why he besmirches companies like Apple, Google, Microsoft, and Hewlett-Packard.
Levin presided over a Senate hearing last week devoted to examining the “loopholes and gimmicks” used by these multinational companies to avoid paying taxes – and to branding them dirty tax scofflaws. Well here’s a news flash for the senator: incentives matter.
The byzantine U.S. tax code, which Senator Levin – over his 33-year tenure in the U.S. Senate (one-third of a century!) – no doubt had a hand or two in shaping, includes the highest corporate income tax rate among all of the world’s industrialized countries and the unusual requirement that profits earned abroad by U.S. multinationals are subject to U.S. taxation upon repatriation. No other major economy does that. Who in their right minds would not expect those incentives to encourage moving production off shore and keeping profits there?
Last week, the Washington Post reported that Republicans in Congress may back down from their push to extend the 2001 and 2003 tax cuts for all Americans, including higher-income earners, if President Barack Obama wins a second term.
While President Obama has insisted that Congress should extend tax cuts for families earning less than $250,000, this would be only a one-year deal. James Pethokoukis notes that Obama may decide to go ahead and raise taxes on all income earners, including lower and middle-class, if he is re-elected. Pethokoukis uses the story from Noam Scheiber, who wrote The Escape Artists: How Obama’s Team Fumbled the Recovery, to explain why he believes this is a real possibility:
In the fall of 2009, Obama’s chief congressional lobbyist Phil Schiliro cooked up a plan to extend the middle-class Bush tax cuts for two years while letting the upper-income tax cuts expire on schedule. If Congress couldn’t devise a way to pay for the $2.3 trillion extension of the middle-class cuts, they would expire in 2015. Schiliro easily sold White House budget director Peter Orszag on the idea. “[Orszag] believed the only practical way to balance the budget was to repeal all the Bush tax cuts, not just the upper-income variety.”
Orszag then presented the plan to Obama: