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Sunday, January 29, 2012

Income Inequality and the Obama Lie -3

I have written twice about the fact that president Obama was wrong when he repeated the statement that Warren Buffett's secretary pays twice the percentage of her income in taxes that Buffett pays. Each time, I have gotten e-mail telling me that my focus on the lie coming from Obama is misplaced and that I should instead be talking about the capital gains tax rates. I disagree.

I believe it is very important for the American people to understand just how easily Obama tells lies. I did not say that he misleads the public or misunderstands the facts; I said that he lies because that is what these are. We have spent three years listening to Obama's lies and people need to recognize them for what they really are. Listen, I do not really care what tax rate is paid by Warren Buffett or his secretary. I do care that when the president of the United States of America speaks, the country ought to be able to assume that he is speaking the truth. We went through seven years when Obama and those like us kept shouting "Bush lied and people died!" It was an important charge and one which, I believe, devastated the Bush presidency. I also believe that the charges against Bush were unfair and incorrect. Nevertheless, the point is that everyone in the USA thinks that the president needs to tell the truth.

So how can I be so certain that Obama knows that he is lying? Let's start with a simple fact from Obama's biography: Obama graduated from Harvard Law School. So did I. I know what basic courses Obama had to take as part of his studies. One of them was called Taxation and it dealt with individual income taxes. Another course was Corporate Taxation which obviously dealt with the taxes levied on corporations. Obama well understands that the American income tax system is progressive; in other words, the rates get higher as the income gets higher. He also well understands that there are special rates for capital gains and dividends. Indeed, just over a year ago, Obama himself acted to make certain that the rates on capital gains and dividends would not rise for anyone, even Warren Buffett, since -- Obama said -- raising taxes for anyone during tough economic times did not make sense. So let's be fair; the current tax rates for Warren Buffett are as much the Obama rates as they are the Bush rates. Unless both Obama and the heavily Democrat Congress of 2010 had acted to keep the rates for capital gains and dividends low, these rates would have gone up substantially beginning in 2011 (capital gains by 33% and dividends by over 100%). It does not take a genius to understand that Buffett is not paying twice the taxes as his secretary, and if one has studied taxes as Obama did, it is a given that one understands this basic fact. In short, Obama is clearly lying and the American people deserve to know this.

Now as to the capital gains tax rate, this was just set a year ago by Obama and the Democrats in congress. For Obama to decide a few months later that he would totally change direction is bad enough; after all, what kind of leader has such a lack of foresight that he pushes through a dramatic bit of legislation with great fanfare only to totally abandon course and reverse direction within six months? Clearly, the reversal is not because the economy has gotten stronger. Growth in 2011 was not as strong as the previous year which Obama said were bad economic times. It is not because Obama's core beliefs (if he has any) have changed. No, Obama's new position on taxes is the direct result of his decision as to what would play best in his re-election strategy. Obama does not concern himself with what is good for the country; his only concern is what is good for his re-election.

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