Ken's Project Blog

July 22, 2011

President Obama’s Op-Ed in USA Today

Filed under: In The News,Politics,Taxation — Ken @ 12:11 pm

President Obama wrote an Op-Ed that was published over at usatoday.com, I wanted to take a close look at the following paragraphs from his Op-Ed:

That’s why people in both parties have suggested that the best way to take on our deficit is with a more balanced approach. Yes, we should make serious spending cuts. But we should also ask the wealthiest individuals and biggest corporations to pay their fair share through fundamental tax reform. Before we stop funding clean energy research, we should ask oil companies and corporate jet owners to give up the tax breaks that other companies don’t get. Before we ask college students to pay more, we should ask hedge fund managers to stop paying taxes at a lower rate than their secretaries. Before we ask seniors to pay more for Medicare, we should ask people like me to give up tax breaks they don’t need and never asked for.

The middle class hasn’t just borne the brunt of this recession; they’ve been dealing with higher costs and stagnant wages for more than a decade now. It’s just not right to ask them to pay the whole tab — especially when they’re not the ones who caused this mess in the first place.

Now, let’s step through it and see what I found interesting:

“That’s why people in both parties have suggested that the best way to take on our deficit is with a more balanced approach. Yes, we should make serious spending cuts.”

The last proposal from the President/Democrats planned to cut $2 billion in spending in FY’2012 – is that his idea of “serious spending cuts”? The bulk of his proposed cuts would take place under another President/Administration – if you want to cut spending, cut it, cut it right now – don’t propose tying the hands of future administrations with obligations you are unwilling to make yourself.

“But we should also ask the wealthiest individuals and biggest corporations to pay their fair share through fundamental tax reform.”

The top 1% of income tax filers pays 38% of all income tax revenues, yet only account for 25% of all income – the bottom 47% of tax filers pay 0% of all federal taxes, and the bottom 50% of tax filers pay 2% of all income tax revenues. Seems to me, the “fair share” of the top 1% of tax filers pays about 50% more than “their fair share” – 25% of income should pay 25% of taxes, right?

“Before we stop funding clean energy research, we should ask oil companies and corporate jet owners to give up the tax breaks that other companies don’t get.”

What exactly are those special tax breaks that oil companies and corporate jet owners get? As Warren Buffett pointed out earlier this week, only corporate jets that are used for business purposes are deductible, same as p,ant equipment, railroad locomotives, or other capital expenses with few exceptions. I’d like to see an enumerated list of the “special” tax breaks you imagine oil companies get.

“Before we ask college students to pay more, we should ask hedge fund managers to stop paying taxes at a lower rate than their secretaries.”

Their lower rate generates more income tax revenue than all the secretaries – history has proven that lowering the long-term capital gains tax rate increases revenues, increasing it lowers revenues – is your goal increased revenue or the perception of fairness?

“Before we ask seniors to pay more for Medicare, we should ask people like me to give up tax breaks they don’t need and never asked for.”

Then don’t claim the tax breaks you are entitled to, Mr. President – they aren’t required, ask your tax accountant, he’ll explain that deductions are optional. President Clinton didn’t have to claim a deduction for his donated used underwear when he was Gov. of Arkansas, but he choose to do so.

“The middle class hasn’t just borne the brunt of this recession; they’ve been dealing with higher costs and stagnant wages for more than a decade now. It’s just not right to ask them to pay the whole tab — especially when they’re not the ones who caused this mess in the first place.”

They did enjoy the “brunt” of the benefit of the so-called “Bush Tax Cuts for the Wealthy” – those earning under $250,000 or $200,000/year got about $3 Trillion in tax savings, those above that so-called “Millionaires and Billionaires” line got less than $1 Trillion in tax savings.

You can see the entire Op-Ed over at usatoday.com.

Sources:

usatoday.com: USA Today Op-Ed

hansenreport.wordpress.com: “I will gladly cut spending in ten years, for a debt increase today”, Shared Sacrifice, Warren Buffet on Private Jet Deductions

labrador.house.gov: Transcript: Labrador Appears on “This Week” with Christiane Amanpour

YouTube.com: Obama: Raise Taxes, Capital Gains – “For Purposes of Fairness”

nytimes.com: Clinton Taxes Laid Bare, Line by Line

accountingtoday.com: Tax Cut Extensions Would Ratchet Up National Debt

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2 Comments »

  1. .President signs the Social Security Act at approximately 3 30 pm EST on August 14 1935. D- ….The Social Security Act was drafted during Roosevelts first term by the Presidents Committee on Economic Security under and passed by as part of the .

    Comment by hemp — August 14, 2011 @ 9:40 pm | Reply

  2. I mean you know were running huge deficits now that–which we should be running from a Keynesian standpoint to try and get this economy moving but they have consequences too.

    Comment by hemp — August 17, 2011 @ 3:52 am | Reply


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