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Obama’s War on Wealth
Posted By Tait Trussell On April 20, 2011 @ 12:20 am In Daily Mailer,FrontPage | 14 Comments
Barack Obama unsheathed his key campaign weapon for 2012: Tax America’s millionaires and billionaires and thereby solve our national debt. It won’t work for several reasons.
A little-publicized finding should shock Obama supporters: The president’s approval among the poorest Americans is only 48 percent, according to an April 13 Gallup poll, leaving him with less-than-majority approval rating among all income brackets in Gallup’s presidential approval surveys.
While some people resent the high pay and bonuses earned by Wall Street bankers, they have no resentment about the many millions in riches paid to some who star in movies, or silly TV shows, or who play pro basketball, which Obama loves so much.
Moreover, study after study has shown that those without a lot of money don’t resent the rich. Many hope they will be wealthy some day. And while Obama is eager to brainwash the gullible public into believing that the “rich” are under-taxed, in truth, they pay more than their “fair share.”
The Adjusted Gross Income for those earning $250,000 is 21.2 percent of the total tax of $7.6 trillion. On total tax returns, the “rich” paid 43 percent. So, those in the $250,000-plus bracket still are bearing twice the tax load, relative to their income, according to 2009 preliminary IRS figures and calculations of the National Taxpayer Union.
This doesn’t stop many Democrats from practicing demagoguery: claiming that the Republicans want to deprive poor children of sustenance and hurt old and young women with their budget.
Slamming the responsible Republican plan to shrink the nation’s $14.3 trillion debt, Obama April 13 blustered: “There’s nothing serious about a [budget reduction] plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires.” That was his rude contention in his speech as his purported and distorted response to the debt crisis.
Speaking as if he were the purveyor of all truths, Obama declared:
“In December, I agreed to extend the tax cuts for the wealthiest Americans because it was the only way I could prevent a tax hike on middle class Americans. But we cannot afford a trillion worth of tax cuts for every millionaire and billionaire in our society. And I refuse to renew them again.” His lower lip curled down in defiance.
The president implored citizens to understand that — like a trapped animal — he was forced to go along with those wanting to preserve the tax cuts in order to be the heroic protector to the middle class. The fact is, the agreement was only to continue those same existing tax rates for two more years. No new tax cuts were given to millionaires or billionaires.
The Boston Consulting Group’s Global Wealth 2010 Report stated that the largest percentage of money gain has occurred in the Asia-Pacific region, where wealth soared 22 percent, or $3.1 trillion. In the tiny republic of Singapore, 11.3 percent of its households were millionaires. Compare that with the U.S. population, where the millionaires make up only 4 percent of our millions of households. Switzerland has more than twice as high a percentage of millionaire households as the U.S. So does Kuwait.
There were 1,210 billionaires in the whole world in 2011. According to a Forbes analysis, 75 of them live in liberal New York City, where Obama has sought much of his campaign funds.
According to data from the National Taxpayers Union and the IRS, the top 5 percent of taxpayers pay about 60 percent of the federal income revenues. A taxpayer with a reported Adjusted Gross Income of as low at $160,000—less than a member of Congress makes—falls into this category. The bottom half of American taxpayers fork over less than 3 percent of the taxes collected.
More than 36 percent of Americans pay no federal income taxes, according to the Tax Foundation and IRS figures. That’s why consumer polls show that many people don’t care if taxes are raised. Why should they? They don’t have to pay them.
According to the Census Bureau, the total number of American households is 117,583,000, with a mean income of $67,976. The number of households with household incomes of under $5,000 is 3,747,000.
In the bracket Obama has his sights trained on — the $250,000-and-over earners — there are 2,372,000 of these. But only 319,000 are millionaires. Roughly 70 percent are small business owners reporting business profits on their personal tax returns. We count on these individuals to provide the most jobs in the U.S.
Obama also wants to get rid of what he calls tax loopholes. But you can’t pay off much of the debt even if, for example, you wiped out all the itemized deductions, most of which really aren’t considered loopholes. According to preliminary data from the IRS for 2009, the figure is less than $1.2 trillion. Total deductions for those at the targeted $250,000-plus level were $217 million.
The future prospects for controlling the debt became even darker last month in an under-reported congressional hearing of the House Subcommittee on Domestic Monetary Policy. Economist Lewis Lehrman pointed out that the level of debt service payments could rise by an order of magnitude and consume a part of the federal budget which today is “almost unthinkable.” He said he sees an uncontrolled $800 billion federal spending increase in four or five years.
The Standard & Poor credit rating service, in a stunning decision April 18, moved its outlook on the U.S. debt from a stable to a negative rating, as all financial services reported. Although the administration said it believed the S&P “underestimates the ability of American leaders to come together,” the respected credit service said it fears that the differences in how to avoid a fiscal stalemate could continue until 2014.
So, it is not only the Republicans in Congress who are raising dire warning signs about our debt. Obama must begin to deal with reality.
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