Obama Tax Position Analysis

The recent press conference where President Obama tried to sell tax cuts for those making over $250k while extending unemployment benefits for 13 months struck me as being odd but until I read Peggy Noonan's article titled From Audacity to Animosity, I couldn't understand what was so perplexing.

This portion of the article is most important:

President Obama was supposed to be announcing an important compromise, as he put it, on tax policy. Normally a president, having agreed with the opposition on something big, would go through certain expected motions. He would laud the specific virtues of the plan, show graciousness toward the negotiators on the other side—graciousness implies that you won—and refer respectfully to potential critics as people who'll surely come around once they are fully exposed to the deep merits of the plan.

Instead Mr. Obama said, essentially, that he hates the deal he just agreed to, hates the people he made the deal with, and hates even more the people who'll criticize it. His statement was startling in the breadth of its animosity. Republicans are "hostage takers" who worship a "holy grail" of "tax cuts for the wealthy." "That seems to be their central economic doctrine."

What is interesting to me about the Obama speech was the lack of mention of the mandate from the American people that the Republicans were motivated by. This is not a new argument by any means as Obama has been railing against the wealthy since before he has gotten into office. Moreover as he divided the country and tried to turn citizen against citizen he raided the treasury running up trillions of dollars of debt which is not paid for.

Class warfare is mostly effective when a country has classes. But when a person who sweeps floors in a company can move up the ladder to take virtually any position and make any amount of money, the idea fails.

Other problems with the Democratic position include the idea that tax rate cuts are the same as tax cuts. The private sector generally increases their income in proportion to the amount of capital or money they have and they often compound the gains. So if more money is left in the private sector because tax rates are lower, there is more future income to tax.

If the government gets it you can be assured some of it will find its way to wasteful programs like $2.5M for potato research, etc.

Moreover, Democrats constantly discuss tax cuts for the rich and they twist words when the proper way of saying what is happening would be tax rate increases. After all, the tax rates have been the same for ten years, any increase is exactly that.

And their obsession with millionaires and billionaires is fascinating. These people are the ones who invest their money and put it in the banks which in-turn lend the money out to others who want to purchase homes, vehicles and launch new businesses.

These are the people who funded Google, Facebook, Twitter and virtually all other start-ups which needed money.

Would you rather have money distributed via investments to hot new startups keeping the US competitive or leaked out to criminals via Medicare fraud?

Finally, there is absolutely no correlation between what the government raises in revenue and what it spends. Regardless of the tax rate, the government is the absolute worst place for money to go. It is a giant sink hole of incompetence, wrapped around a special interest core where dollars allegedly used for the good of the poor keep them poor or make them poorer. The best intentions of those people who want to increase taxes on anyone do not coincide with the benefits they hope to attain via income redistribution which never achieves the desired effect.

This is a consistent theme and the answer is always the same... We need to spend more.

In closing, only in the mind of a college professor with zero business experience does the logic of taking money from the private sector to spur private sector jobs compute. How could taking a billion dollars out of investment funds and savings accounts create jobs? Especially when some of this money will be spent on hiring new regulators to increase the size of government which is already far too large.

If anything, the more you increase tax rates and grow government, the less private sector capital there is to tax!

In an international market where every company has to compete, the citizens with the least regulation and overhead have the advantage.

I have witnessed countless companies grow so big that they cannot function efficiently and the US government is 10,000 times bigger than the largest of these companies. Moreover, it pays less, virtually guarantees employment regardless of performance and grows regardless of how well it does its job and especially if it fails to do its job.

The more I look at the Democratic utopia of reduced personal responsibility, diminished liberty, increased regulation, massive welfare programs and suffocating regulations the more I see a future more like Cuba and North Korea.

It is why the American people need to start campaigning against Obama as hard as they can for the next two years and put him out to pasture so liberal elites can hire him out to speak at $100k a pop.

As we look to a future where we must compete more vigorously against countries with more educated people and who work harder and have less entitlements, can we please elect more politicians who have actually managed something and heaven forbid had to make a payroll?

-- Rich Tehrani

Update: on Friday, December 10, 2010 at 4:30 PM, president Clinton gives the speech Obama should have - less partisan and more positive regarding how no bipartisan bill is perfect when you are partisan. President Obama deserves credit for bringing Clinton into this situation to strengthen his position.
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  • Musing: I say cut the salaries of the house and senate read more
  • Anonymous - Government worker: Obama reaches out and makes a decision to cut government read more
  • Rich Tehrani: It is surprising that your pay is lower than what read more
  • anonymous: As a federal worker I wish I was paid what read more
  • Peter: Unless you live in Florida and watched the drama unfold, read more
  • Tom Keating: Ok, that's just freaky, cuz I watched this like 15 read more

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