What the (Bleep) Just Happened?

by Monica Crowley

  Most Americans wouldn’t have a problem paying a reasonable tax rate—if government were a good steward of our money. There are certain collective goods and services that only government can provide—such as military defense, bridges and roads, and, locally, police forces and public schools. But over the years, government has blown through so much money on things it shouldn’t be involved in—from a Department of Homeland Security roundtable on “Deceptive Dating Tactics” in January 2012 to a $76 per person lunch at a 2011 Department of Justice conference—that it’s now broke and cannot afford the things it’s supposed to do. I mean, a $76 lunch? Really? Do people also leave the DOJ with a sweet swag bag, like they’ve just been to the Vanity Fair Academy Awards after-party? We know Attorney General Eric Holder wishes he were P. Diddy, but he’s more like Raj from What’s Happening!!

  During a 2008 primary debate, ABC News’ Charlie Gibson asked Obama if he’d raise the capital gains tax rate even if he knew that cutting it would generate more revenue for the government, as it did when Clinton had cut it. Obama responded that raising the tax, even if doing so would reduce revenue, might be warranted out of “fairness.”

  What he was really saying was that to the kooks, raising taxes is not just about raising revenue, although they always need more of that. It’s really about raising rates in order to sock it to the wealthy. The redistributors are less concerned with how they bring in money to the Treasury than making sure they zap the “rich” no matter what. To the leftists, in the battle of rates versus revenue, hiking rates will win every time, despite the mountains of evidence that show that they could get more money into the government to fund their kook agenda from lower rates. It makes no logical or economic sense, but the leftists are driven by neither logic nor sense. Nobody ever got a job from a poor man. The leftists—particularly the Obama cabinet, which didn’t have a single member with private-sector experience—will not see that economic truth. They’re so ideologically blinded by their obsession with ever-higher taxes that not even Dr. Phil could talk them out of their addiction to other people’s money. The kooks love higher tax rates because they’re their most effective brute weapon of class warfare. Paint devil’s horns on the “rich,” then take them for everything they’ve got. And do it by force, by changing the tax code, enlarging existing redistributionist programs, and, whenever possible, creating new ones. While the leftists like to paint themselves as compassionate and empathetic and the Right as cold and greedy, the exact opposite is true: the Left is implacably greedy for everybody’s money. The United States of America has become the United States of Grand Larceny, with leftists prodding the bodies of every American in an attempt to determine whether we’ve devised some new biological way of hiding nickels and dimes from them. (Hence, ObamaCare.)

  During the 2008 campaign, Obama toned down the class warfare rhetoric. Despite his years working in the class warfare trenches as a community organizer, where his job was to drive class divisions and resentment, Obama downplayed that part of his agenda. Instead, he cast himself as a unifying leader of the rich, poor, and middle classes. He glossed over the fact that the divisions he claimed he’d heal were the precise divisions he needed to engage in his redistributionist extravaganza. In 2008, most of the American people bought his “Mr. Unity” routine because they weren’t particularly focused on taxes or class divisions. That year, voters were less concerned about taxes than they had been in previous elections because they had enjoyed a fifteen-year-long respite from tax hikes. From Bill Clinton’s 1993 tax increase to Obama’s 2009 tax hike on cigarettes, Americans had not experienced a major federal tax increase. President George W. Bush’s two waves of cuts in marginal rates in 2001 and 2003 reduced taxes for everyone and also cut 13 million people on the lower end of the income scale from paying any federal income tax. If you’re paying less or no federal income taxes, you’re not particularly worried about them. Because more Americans across the entire economic spectrum could keep more of their own money, the poor man could feed his family better and the rich man could give the poor man a raise. That is, until Obama became president and empowered the poor man to rob the rich man. Pretty soon, the rich man will be the poor man, and we’ll all be sitting in one big crappy boat together.

  Once president, Obama dispensed with the unifying rhetoric and began to wage full-frontal class warfare. At the outset, he hit out only at the “fat cat bankers on Wall Street” while waging a softer-sell class warfare on the rest of us. Higher taxes, he said, are “neighborly.” He invoked the biblical verse about being “our brother’s keeper,” which dovetailed with his earlier comment advocating “collective salvation.”

  But this has never been about being your “brother’s keeper.” It’s always been about keeping your brother’s wealth. It has been about envy and about coveting what someone else once had. Obama even pretended to oppose higher taxes in the summer of 2009, when he said, “The last thing you want to do is to raise taxes in the middle of a recession because that would just suck up—take more demand out of the economy and put businesses in a further hole.” Amen! Oh wait. He didn’t mean it.

  He went on to say, “These are tax cuts and changes in the tax credit system that are going to spur job creation and economic growth, and I’m proud that Democrats and Republicans worked with each other to get it done.” This was his way of forcing the GOP to share ownership of the bad economy: if the extension of the Bush tax rates succeeded in improving the economy, he would take the credit. But if they failed to do so, he’d be able to say, “See? We tried the lower rates the Republicans wanted and there’s been no discernible improvement in the economy.” Of course, a two-year temporary extension didn’t grant the kind of certainty businesses need to expand and hire. A short extension was better than a rate increase, but it would only lead to a continuation of the status quo. That, however, was an irrelevant point to Obama.

  In that same press conference in which he croaked out that halfhearted praise for extending the Bush tax rates, Obama couldn’t help but hit his redistributionist default button. He alluded to the government-union clash in Wisconsin and said those union workers should not be “denigrated” or “vilified.” He continued: “I believe that … the concept of shared sacrifice should prevail. If all the pain is borne by only one group—whether it’s workers or seniors or the poor—while the wealthiest among us get to keep or get more tax breaks, we’re not doing the right thing.”

  The class warrior in him burst out. He couldn’t wait to raise income taxes again so he could grow government even more—so much so that as soon as he had the opening again in 2011, he cheered their impending expiration at the end of 2012 and pushed for higher rates on those earning over $1 million per year. And in a vivid illustration of his pathology, it never occurred to him that the Bush tax rates had now become the Obama tax rates.

  On August 4, 2011, Obama turned fifty years old. The usual birthday cards arrived from perennial favorites like Barbra Streisand, Kim Jong Il, Jay-Z, and Robert Mugabe. The day before, he celebrated by attending three reelection fund-raisers in Chicago. He had just come off an agreement with Congress to raise the debt ceiling by up to $2.4 trillion (More spending! Happy birthday, Barry!) and had begun to pound “millionaires and billionaires” for failing to “pay their fair share.” That night, he met separately with one hundred of his highest-roller donors, each of whom paid $35,800 per person for some face time with him. The package also included a chance to walk the Obama family dog, Bo, a pair of Barry’s sweaty gym socks, and a bag of dirty turnips from Michelle Obama’s organic garden. Obama, who had added $3,938,093,118,800 to the national debt as of that fiftieth birthday, told his wealthy pals that the government needed to spend more on everything from “wind turbine and electric cars” to “cures for cancer.”

  Without missing a beat, he proceeded to hit those dastardly rich folk who needed to get with the “shared sacrifice” agenda. He struck out against “big money flooding the airwaves and slash-and-burn politics” as he
stood in front of all that “big money” with his palm open, ready to accept their “big money” so he could “flood” those airwaves with ads pounding them. Remember when Obama pledged in 2008 to accept only public financing for his campaign? That lasted about five minutes before he threw those rules out the window and raked in unlimited amounts of money from sources big, small, and questionable. He made a similar about-face in early 2012 when he decided to embrace super PACs after spending nearly two years attacking them as “phony front groups” undermining our democracy. The man who rails constantly against the “rich” gushes over them when it’s time to campaign. After all, class warfare needs a steady bankroll.

  It used to be that old-school class warriors would at least fake being “men of the people.” Today’s class warriors don’t even try to put on the act. Obama takes time out of his busy schedule of slamming those mustache-twirling “millionaires and billionaires” to hang with them on Martha’s Vineyard or the Costa del Sol. New York City mayor Michael Bloomberg warns about possible economic riots as he examines his $18 billion bank account. Director Michael Moore fans the flames of class warfare as he counts his latest multimillion-dollar movie receipts. Actress Roseanne Barr calls for bankers to be limited to $100 million in personal wealth, forced into “reeducation camps,” and possibly even “beheaded” in between cashing her multimillion-dollar checks from the syndication of Roseanne. She finds the time to do all of this while dressed up like Hitler in her kitchen as she bakes Gingerbread Jew Men in the oven (yes, she actually did this). The new class warriors are class war provocateurs rather than actual combatants. It’s so dirty in the trenches! That’s for the union thugs. We’ll fight the class wars up here, from the pristine perches of the White House or our private jets or our rambling thirty-room mansions. To paraphrase Mel Brooks, you guys go fight the class wars. We’ll wash up.

  The new class warriors are made up of two essential groups: those wanting ever-greater government help and those plagued with enough “rich guilt” to want to dole it out. So, how do you spot the ones plagued by rich guilt? Those class warriors drink white wine, wear hounds-tooth jackets, trade aromatherapy oils, and fantasize about Leon Trotsky naked on their Facebook pages. The new class warfare is designed to enforce socialist economic policies that would have zero chance of being adopted without the trumped-up class divisions.

  Today’s class wars are not about grinding poverty and basic survival. Typical welfare recipients in America now generally receive a cell phone courtesy of the taxpayer lest they be caught in a food stamp emergency without the means to dial 911. Instead of economic deprivation, the modern class wars are about envy: demanding something that someone else has, regardless of how they earned it. America today is not run by an economic upper crust that pays no taxes and preys on the poor. In fact, the exact opposite is true: government spending on the less fortunate has never been higher, and the wealthy pay the vast majority of the taxes to support it. And yet, Obama and the kooks have invoked Alinsky rules to form class warfare battle lines like a demented version of the epic fight scene in Braveheart. Obama out in front, his face painted not blue but Maoist red and his army consisting of union brutes, former ACORN employees, members of the Nation of Islam, college kids, tofu-eaters, and Colin Powell. Gone was the softer rhetoric about how paying higher taxes was “neighborly” and “patriotic.” In its place was more authentic kook language about how the “rich” need to shoulder more of the burden of funding “economic justice.”

  Obama escalated his hits on everybody on the leftist checklist of “rich” bogeymen, including most prominently “millionaires and billionaires,” by whom he means those making as little as $200,000 per year or more. In a high-cost state like New York, $200,000 per year could be made by a married veteran teacher and police officer, hardly the Bill Gateses of the world. And there is quite a difference between someone making $1 million and someone making $1 billion. Obama’s not exactly a Mathlete. In fact, when Obama first swept into office, fellow redistributionist senator Max Baucus, chairman of the Senate Finance Committee, which has jurisdiction over federal tax law, introduced a bill that would have increased the income tax rates on some Americans who earn as little as $104,425 per year. He proposed to raise the top two income brackets to 36 percent and 39.6 percent, respectively. Fortunately, the Baucus bill bit the dust, but it reveals just how much the leftists are constantly dying to raise taxes not just on the “rich” but on the middle class as well.

  To his caricatured “millionaires and billionaires” Obama added the omnipresent leftist villains “corporations,” “corporate jet owners,” and “Big Oil” to his list of dastardly “rich” folk who needed to hand over more of their assets. Never mind that the U.S. corporate tax rate—35 percent—is now the highest in the world, which has induced countless U.S. companies to move their operations abroad and park trillions of dollars overseas in an effort to avoid that prohibitive tax. If the corporate tax rate were lowered substantially, those companies would likely bring that money back to invest and hire. In fact, a 2011 study by the National Bureau of Economic Research published in the American Economic Journal found that the higher the corporate tax rate, the more companies seek to avoid it, resulting in less economic growth.

  Obama also hit out at corporate jet owners regardless of the fact that scrapping the corporate jet tax break would raise just $3 billion over ten years, a mere spit in the ocean of government spending. Even his bromantic partner in all things taxes, billionaire investor Warren Buffett, refused to endorse his corporate jet tax increase, probably because Buffett’s firm, Berkshire Hathaway, owns private business jet charter company NetJets. Obama also failed to mention that his own “stimulus” plan actually created a subsidy for the private jets he was demonizing. What a clustermess. Every night when Obama’s head hits his Tempur-Pedic pillow, he dreams he’s Samuel L. Jackson in Snakes on a Plane. But in Barry’s fantasy, instead of fighting giant cobras, he’s on a Gulfstream IV corporate jet, trying to throw bankers and floor traders from the emergency exit.

  Over the past few decades, empirical evidence has shown that keeping tax rates permanently low incentivizes economic growth and job creation as it creates economic certainty, which allows for longer-term planning and puts more money in the pockets of individuals, businesses, and other risk takers who grow the economy. The dramatically lower marginal tax rates put in place by President Reagan—with a top rate of 28 percent—led to the strongest two and a half decades of economic growth in American history.

  In fact, the data show that the federal income tax actually brought in less revenue as a percent of GDP when the highest rate was 70 percent to 90 percent than it did when the highest rate was 28 percent. As Alan Reynolds of the Cato Institute has pointed out, when the top rates were approaching the astronomical 92 percent, total revenue was only 7.7 percent of GDP. When President John F. Kennedy lowered the top rate to 70 percent (and moved the lowest rate down to 14 percent), revenues rose to 8 percent of GDP. When President Reagan cut rates across the board and made the highest rate 50 percent and the lowest 11 percent, revenues rose again, to 8.3 percent of GDP. After Reagan oversaw the 1986 tax reform that slashed the top rate to 28 percent, revenues dropped only slightly, to 8.1 percent. Lowering top marginal tax rates paid for itself regardless of what happened to the economy or to GDP performance in any given year. Reductions in top rates under Presidents Kennedy and Reagan as well as reductions in capital gains tax rates under Presidents Clinton and George W. Bush covered their own “costs” and generated more revenue than when rates were higher. The result was consistently strong economic expansion.

  The converse is also true: higher rates mean poorer economic performance. As economist Arthur Laffer has argued, as tax rates increase, the number of people paying taxes declines, leading to a shrinking tax base. That, in turn, can lead to rates that are so high to make up for fewer taxpayers that they become prohibitive. Revenue then falls dramatically and leads to further economic harm. History
shows that government revenues increase when there is economic growth and more taxpayers in the workforce.

  If you calculate the current top tax rate, 35 percent (scheduled to shoot up to 39.6 percent in 2013), plus state income taxes, payroll taxes for Social Security and Medicare, as well as the new 0.9 percent increase in payroll taxes to fund ObamaCare, many Americans could be looking at total tax bills of 58 percent to 70 percent of their incomes, depending on their income and the state income tax rates where they live. Only a devout kook would think this is a good idea. It’s about as brilliant an idea as sticking your hand into a bowl full of mosquitoes or letting Gary Busey babysit your kids. The kooks love to point to the supposed glory days of drastically higher tax rates and pine for their reinstatement. Leftist economists like former Clinton Labor secretary Robert Reich have argued for a return to the 70 percent top marginal rate, cheered on by the academic left and some Democrats in Congress. Reich prefers a slower, more agrarian culture, like his native homeland called The Shire, located in the Northwest part of Middle Earth.