Obama’s faulty math: Higher taxes for rich just doesn’t add up
by STEVE HUNTLEY
When President Barack Obama rails against “millionaires and billionaires,” as he does often, Republicans accuse him of trying to divide the country by class. In his speech calling for $1.5 trillion in tax increases, mostly on high-income earners, Obama declared, “This is not class warfare. It’s math.” The problem for him is that his math doesn’t add up.
For starters, Obama’s tax increases hit individuals making $200,000 and families and small businesses earning $250,000. That’s far from being a millionaire. Sen. Charles Schumer, one of a number of the Democrats critical of Obama’s tax plan, notes that $250,000 “doesn’t make you rich at all” in high-cost-of-living, high-tax New York.
Furthermore, the numbers dispute Obama’s assertion that “the wealthy” don’t pay their fair share of taxes, according to an analysis of recently released IRS data for 2009 by the nonpartisan Tax Foundation. The study shows that taxpayers earning more than $200,000 accounted for 25 percent of the nation’s adjusted gross income for that year but paid 50 percent of the $866 billion in 2009 income taxes.
Also, those awful corporations that left-wing Democrats hate so much pay a lot of taxes. The 1,900 largest corporations accounted for two-thirds of the $227 billion in 2009 corporate income taxes, according to the foundation.
The numbers measuring the impact of Washington’s stimulus programs aren’t any better. The Federal Reserve declared Wednesday that the country faces years of low growth and announced a new $400 billion economic salvation program. The Dow nose-dived 283 points Wednesday and 391 Thursday. A couple of weeks ago, Wall Street reacted with another plunge after Obama announced his latest $447 billion jobs program.
That cobbled-together mixture of temporary tax cuts, short term credits and infrastructure spending is supposed to create 2 million jobs. Do the math and that comes out to the government spending $223,000 for each new job.
That’s a little better than Obama’s first stimulus package. That one, totalling $821 billion, is supposed to have created or saved as many as 3.6 million jobs — a figure widely disputed — which translates into $228,000 per job.
That’s small potatoes compared with the Department of Energy’s program of $40 billion in loan guarantees to promote green energy. Half the money has been spent to create a total of 3,545 direct jobs, according to a Washington Post analysis, That’s $5.6 million per job. But rest assured, the DOE says once the full $40 billion in financing is disbursed, 60,000 jobs will be found — more than $666,000 for each new worker.
The numbers that don’t add up go on and on. Obama’s first stimulus was intended to keep unemployment from topping 8 percent. It has been at 9 percent or higher for months. The trillions in the Fed’s financial machinations were supposed to spur economic growth. The U.S. gross national product, the standard measure of U.S. output of goods and services, increased at an annual rate of an anemic 1 percent in the second quarter of this year, following a worse showing of 0.4 percent growth in the first quarter.
The tax scheme announced Monday by the president wasn’t actually about improving the economy or doing a deal with Congress. Some of its soak-the-rich provisions were rejected when Democrats were firmly in control of both houses. No, the speech was all about political math. Obama’s poll numbers are dropping, especially among independents, and his liberal base is unhappy. Raising taxes on high earners — a k a increasing them for somebody else — has poll-tested populist appeal.
But Obama’s playing politics can’t hide the totality of his math. Glenn Reynolds of Instapundit.com unearthed from Facebook the best assessment of the administration’s record: “Obama is great at math. He divides the country, subtracts jobs, adds debt and multiplies misery.”
No comments:
Post a Comment