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« British Begin Withdrawing From Afghanistan | Main | Obama's Campaign Hawking Birth Certificate T-Shirts With Slogan "Made In The USA" »
May 18, 2011

Avowedly-Liberal The New Republic: Rich Pay Lots of Taxes, And It Is Mathematically Impossible For Obama To Honor His Pledge To Not Raise Taxes on the Middle Class

...especially, the article notes, if he also refuses to cut spending and in fact increase the spending of government to the high levels he prefers.

I wasn't all that surprised that the article noted that Obama's tax-pledge is a lie. That is just mathematics, and not even very difficult math. What surprised me is that the article also undermines liberal shibboleths that the rich don't pay their "fair share" in taxes. You can't prove such a thing mathematically, because the question of course turns on the non-mathematical values question of what a "fair share" might be. But it does produce a lot of charts showing the rich pay more, and not just more in absolute terms (that's a given), but in percentage-of-income terms.

Despite the left's whining/wishcasting on this point, the income tax code is already progressive. It is good to see TNR inject some reality into the increasingly-poorly-named Reality-Based Community, but I doubt very much it will take.

Of course, you might argue we’re short on revenues because the tax code has let the very wealthy off the hook in recent decades. Maybe so, but it’s hard to see that in the data. According to the Urban-Brookings Tax Policy Center, the effective tax rate for all federal taxes in 2009 was 18.2 percent. The effective rates by quintile were:

Lowest -0.9
Second 6.6
Third 13.4
Fourth 17.2
Top 22.9

But maybe the real action is within the top quintile of income-earners, with the super-rich making out like bandits. Again, the Urban-Brookings numbers don’t support that story:

80-90 19.4
90-95 22.0
95-99 23.5
Top 1 percent 26.1
Top 0.1 percent 27.9

This is just a one-year snapshot, of course. What about trends over time? We know that the distribution of income has become less equal in recent decades, with those at the top commanding a larger share. You might think that the share of taxes paid by high earners has declined during this period, shifting the burden to those below. But according to the CBO, that hasn’t happened either. While the share of national income for the top quintile and the top 1 percent has risen considerably since the mid-1980s, their share of total federal taxes has risen even more.

You might still argue, however, that the right comparison is not across time but across national boundaries. Surely the rich pay more of the total tax burden in other advanced democracies, and we need to become more like them. Wrong again. Using 2005 OECD data, The Wall Street Journal recently reported that the share of taxes paid by the top 10 percent in the United States is 1.35 times larger than their share of income. The comparable number for France was 1.10 times; for Germany, 1.07 times; for the OECD as a whole, 1.11. And this is what we should expect, given that most other democracies rely less on income taxes and more on alternatives such as the VAT, which is less progressive.

All to the good, but that is a detail. The major point is: Obama must tax the middle-class to fuel his rapid expansion of super-government, and he knows it, and he's lying when he claims he doesn't know that.

The middle class can either reject Obama or they can begin setting aside thousands of dollars of their money to pay for Obama.

The middle class needs to be made aware of something: Obamamania is a costly thing. Is Obama The World's Most Perfect Man? Maybe so. But get ready to pay the exorbitant prices The World's Most Perfect Man will naturally command.

And here's the problem, as Salam Reihan writes in NRO, for Obama: The people he will steal his taxes from are exactly the same people he needs to do well with to be re-elected.

Voters in households earning more than $100,000 constituted 26 percent of the 2008 electorate. By any standard, President Obama performed very well with this bloc in 2008. In the 2010 House elections, in contrast, voters in over-$200,000 households chose Republicans over Democrats by a margin of 64 to 34 percent, while $100,000 to $200,000 households favored Republicans by a more modest 56 to 43 percent margin. The president’s political advisers are keenly aware of the fact that Democrats need to improve their performance with these voters or face defeat in 2012. This helps explain the profound irrationality of the Obama administration’s approach to key public-policy questions.

By irrationality, he means that Obama needs two things that can't be together: He needs to lie his ass off about the middle class not being taxed, and yet, to appease the left (or his own quivering conscience) he needs to raise spending higher and higher and hold the line on cuts.

With one hand, he claims he won't increase revenue through taxes on the middle class; with the other hand, he increases spending so high the deficit is now literally the biggest the world has ever seen.

Ask to choose between A and B he chooses C: Fiscal catastrophe in 5 years.

But that's what he does, of course. Obama is not a man who likes A/B decisions. He likes happy, made-up fake options, like voting present, kinetic actions, and borrowing money from the Chinese.

The Wall Street Journal notes that here the right and left agree on the facts. That is, they both agree on the same figures. The left may look at the numbers and say "Ah good, finally, we can be serious about taxing the middle class, as we need to," and the right can say "No, cut spending," but as to the actual facts we are all in agreement.

Except for the mendacious president, who pretends facts aren't facts and figures aren't figures because the only number he cares about is the 271 electoral votes he needs for 4 more years.

Inside the Beltway, one of the most hallowed chestnuts is that so polarized have our politics become, we can no longer agree on basic facts. Mr. Galston and Mr. Salam and their respective allies disprove that. Both agree on the revenue problem, though their policy conclusions veer off in sharply opposite ways.


The argument over taxes and spending, of course, is never fully won. The good news here is Messrs. Galston and Salam have met across the ideological spectrum to offer a good starting point. For those of us who believe that America is best served by a debate that forces citizens to make a clear choice—and that Mr. Ryan has the better part of the argument—we say, "Bring it on."

No Leaning Here: I called TNR "liberal leaning." DrewM and others note that saying TNR leans to the left is like saying Michael Moore leans to the heavy.

I've changed it.

digg this
posted by Ace at 12:59 PM

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