Obama Believes In Raising Taxes for Punishment, Not Economic Value
Written by Sam on April 18th, 2008
This is from Wednesday night’s Democratic debate where Obama was asked a question about raising the Capital Gains Tax.
Barack Obama just admitted on camera in front of the entire country that he would raise taxes on 100 million Americans in order to get revenge on 50 people who had the nerve to make a whole lot of money last year. It doesn’t matter that raising the tax would hinder economic growth. It doesn’t matter that the a large portion of those 100 million Americans include middle class folks like you and me. It’s all about “fairness.” It’s not fair that these people were successful in their investments. Does Barack Obama think it’s fair when that when that hedge fund manager’s secretary sells some stock to put her kid through college that she’ll have to pay a 28% capital gains tax on it? His response is not the answer I expect from a Presidential candidate. This is the answer I would expect from a 12 year old kid on a playground.
Taxes are there to fund the basic functions of government. Barack Obama would use them to punish people whose fortunes and lifestyles he personally disagrees with. This is not someone that should be anywhere near the White House, let alone a U.S. Senator or have involvement in any level of government whatsoever. His attitude is anti-American and destructive. This man is no brilliant genius or some messiah of change. He is just another angry, class warfare Marxist repackaged in a pretty label, typical of the kind of candidate the far left keeps putting up to pull this country down.
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My favorite part about this particular portion of the debate is the follow up question to Obama’s little speech on how he’s so fiscally responsible. Basically, Obama doesn’t understand the Laffer Curve. The point of the question was why raise taxes if, frankly, government revenues INCREASE when you reduce the tax rate. Ridiculous!
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The short-term increase in revenues is caused by people selling off stock to realize capital gains soon after the rate is cut. The “Laffer Curve” effects are nil over the long run:
http://ideas.repec.org/a/aea/aecrev/v84y1994i4p794-809.html
(Randolph and Berman are probably the two most well-informed and cited academics on this matter and the AER is one of the top 2 econ journals. If anything, economics leans to the right, especially with respect to market forces. If you intend to dismiss this academic paper as the product of political hacks, please read it carefully and discuss where the error in their analysis lies.)
Even the CBO notes:
“The potentially large difference between the long- and short-term sensitivity of realizations to tax rates can mislead observers into assuming a greater permanent responsiveness than actually exists.”
http://www.cbo.gov/doc.cfm?index=3856&type=0
These laffer-curve and supply-side arguments are probably the biggest fraud that the Republican party has ever perpetrated on the public. Greg Mankiw, a staunch pro-market economist and a former adviser of GWB, recently estimated that the Bush tax cuts were only about 10-15% self financing. Recall that it was actually George HW Bush who coined the term “voodoo economics” to describe the claim that one could simultaneously cut revenues, increase expenditures and continue to run a balanced budget. That “balanced budget” thing didn’t go too well for Bush or Reagan, did it?
If you want tax cuts because you don’t like taxes on principle, that’s fine, but don’t make these outrageous and demonstrably false claims that cutting taxes actually increases revenue.
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I suppose it is ok to Barry that he banked millions on his book. Apparently, having someone type some drivel about hope and love and slapping your name on it during your 15 minutes is a real talent, but managing millions of dollars for others in world markets is trivial. At one point, I had some respect for this guy, but now I find him utterly repulsive. I cannot wait for McCain to destroy him in November.
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“He is just another angry, class warfare Marxist repackaged in a pretty label”
what is this, 1950? Are we going to have to hide under our desks now?
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Sam has a very irritating tic of using “Marxist” and “communist” to describe anything that he doesn’t like. Several other readers have repeatedly pointed out instances where he misused the term, but the learning curve seems to be rather slow around here.
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Robert,
Is word usage confined to decades? When the shoe fits, first tax it, then wear it.
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No, Publius I use the term “Marxist” to call them out for what they are. Obama is a hard core Marxist. He even hung out with Marxist groups in college. It’s in his book. His entire platform is Marxist wealth redistribution in the effort of “fairness.” He doesn’t belong in government and his election to the Senate shows what a bunch of ignorant fools live in Illinois.
If the majority of Congress were as extreme left as Obama this country would be a Socialist hell hole.
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For some of Sam’s more creative uses of the word Marxist:
“Marxist” means being against Thanksgiving:
http://www.savethegop.com/2007/11/21/seattle-schools-condemn-thanksgiving/
“Marxist” means anyone who moves to Canada:
http://www.savethegop.com/2007/08/01/american-immigrants-to-canada-increasing/
“Communist” apparently means being right-of center on economic issues:
http://www.savethegop.com/2007/11/16/karl-rove-a-movement-conservative/
And, according to Dave, Marxism means “high taxes”.
You wonder why nobody takes you seriously when you use ridiculous-sounding rhetoric that most people gave up on in the 1980s. Try “terrorist” as your synonym for “bad” instead.
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I wonder why nobody takes me seriously? I am fairly certain I have never wondered that. In fact, it’s not even a concern and I am even more certain that your opinion is present in the minds of only a small minority of people that read this site daily.
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Actually, I do not think that, but I always throw in taxes since it turns on liberals so much. I am considering just inserting “Darfur” or “prius parked at whole foods” instead. Its like a shiny ball to a baby.
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As a liberal, and as a frequent critic of both Sam and Dave, I must say that a tax designed to take disproportionately more money from the wealthy in the interest of helping the poor is more than slightly communist in philosophy…
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I can’t get my comment to show up — but I don’t think this is “communist” in philosophy so much as just plain progressive and fair.
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Wait so let me get this straight….Obama acknowledges that this tax plan will 1) decrease the amount of money gained by 100 million Americans and 2) decrease the revenues gained by the government (sorry Publius but even Barack accepted this). And he wants to do this in the name of some vague notion of “fairness.” You can call that progressive if you want but I call it STUPID.
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“Progressive and fair”?!? Did you read what Obama’s comments entailed? Why do liberals insist that successful people be punished in the name of being “progressive and fair”? Why not seek to make the playing field as accessible as possible for everyone rather than drag some people down to prop other people up?
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Langley, we all know why they do it. They think that most people are not capable of providing for themselves and creating their own prosperity. It is the fundamental tenant of liberalism to look down on others as inferior. Hell, look at the comments on this site by the libs….its always “you should” or “you need”. Just constantly informing others of our “shortcomings” and giving instructions. Its really why nothing is ever achieved in this country. Liberals are too “intelligent and superior” listen to anything a conservative has to say, so the make the same mistakes for generations. And conservatives will not be told how to live their lives by others (and of course, we are more intelligent and reasoned), so we just tell them to crawl back into the hole they came out of.
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Becky (or anyone else who’d like to take a shot at this)-
Please point out the specific clause in the U.S. Constitution -or failing that, the Declaration of Independence- that gives the federal government the authority to ensure that everything in America is “fair”.
If you can find it, please tell me who’s definition of “fair” we should use. Your definition? Mine? Obama’s? How about the definition of 50% plus 1 of the American people?
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My short post above didn’t really show my reasoning, for some reason when I submit comments I just get the page reloaded without any comment half the time.
And I’m going off of Publius’s response that there *is* a reason to raise taxes beyond “punishing” those earning capital gains, because I have an intuitive response that the government isn’t going to lose money by collecting more money (kind of like how I have an intuitive response that trickle down is crap: largely off of my empirical observations that the rich are getting richer and my family isn’t seeing any trickle).
As to fairness: I’m pretty sure the Constitution doesn’t say anything about 99% of our laws. I’m talking about fairness: about people working all their lives and not getting even a fraction of what hedge fund sorts earn in one year, despite the fact that they contribute to keeping our society running in important ways as well. Considering how much the government helps to bail out/support the wealthy/corporations, it does seem like an effort to make the playing field more level by taxing those with more money, well, more.
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I am actually not a big fan of this policy of Obama’s. I don’t think that every adult should be forced to live equivalently in the interest of “fairness”. Some people have become rather successful by working really hard, and that’s great for them.
However, I do think that everyone should get the same shot at becoming that successful adult, and right now they do not. For whatever reason- poor family values, poor quality public education, stupid liberal policies, stupid conservative policies, whatever- members of certain socio-economic and/or racial groups are far less likely to get to the level of these 50 extremely successful people who Obama despises. These same people are also more likely to end up in prison or die young.
This is not the American dream. I personally think that anything done to make these people more likely to rise to the level of success of these top 50 hedge fund managers is good. Obama’s strategy of punishing the rich to help the poor succeed is dumb and won’t help. However, the goal of trying to help the poor is an admirable one.
And speaking of people acting like children on a playground, once again, Dave, your immature name-calling isn’t helping anything.
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I think most of these posts are missing the point here.
I work for my money and I make quite a nice living. However, I do not have resources to invest to any substantial degree because I have 3 college aged children.
EVERY CENT that I WORK FOR after $32,550 and up until 78,850 is taxed 25%, and everything I make about that is taxed at 28%.
I want someone to look me in the eye and tell me that some elite wall street player should only have to pay a 15% rate on his “earnings.”
That my friends is the case for raising the capital gains tax to its previous level.
Now, I’m not sure if the Junior Senator is making his comments with me in mind (and frankly, I doubt he is), but this is one (and likely the only) issue that I agree with him on whole heartedly. I would hope you would do the same.
Also, PLEASE, in order to “save the GOP”, drop the laughter curve argument. Even my freshman in college son (staunch Conservative) can see through that nonsense.
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Excellent. More reprimands from a lib. I would guess that 99% of the conservatives reading this site agree with what I wrote.
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Joe, are you saying that people that work for hedge funds don’t work for what they’ve earned? I bet they’d be surprised to hear that.
Additionally, whose decision was it for you to pay for three kids to go to college, yours or the hedge fund managers? It was your decision. Perhaps if you didn’t pay for all of that you’d have the money to invest. Perhaps if you’d invested ahead of time you could have used that money to pay for the colleges. My parents didn’t pay for me to go to school. I did that myself.
Furthermore, you’re being dishonest about the amount of tax you’re paying. You can sit back and quote us the brackets you’re in, but that isn’t the rate you’re paying. I know that because you’ve already told us that whether you realize it or not. Your three college aged children are deductions, as is a portion of their tuition, as is the home you live in, and many other items I have no doubt you are itemizing. I too am in the 25% tax bracket, but after all was said and done with the deductions I was legally able to take, I only paid about 10% to the Federal Government last year and I don’t even have dependents.
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I know some hedge fund guys, and they probably work harder than anyone on this board ever has. That kind of lifestyle is deadly, and the money they make is given to them by their clients. Hedgies take 20% of the profits they make their investors. If they dont make anything in a year, then they make nothing. Sounds like a perfectly fine risk/reward to me.
Rarely is a hedge fund’s capital the guys own money (usually only a small portion). So Joe, why dont you go out and raise some money and open your own hedge fund?
As an aside, hedgies pay the normal tax rate that millionaires pay because the money comes to them in the form of cash. Their clients do not pay them in stock. This is a total lie put out by liberals. Now, warren buffet does pay that 15% because his income is from dividends and/or capital gains only. But, as you can see, Buffet has created many, many companies and many, many jobs. Plus, Ive never heard of Buffet donating a single extra cent to the wonderful institution called the government.
Summary: Most of you dont know what you are talking about. Get your facts straight before you make some boneheaded argument.
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You see Joe, your comment is a perfect example of liberals vs. conservatives. First of all, Sam has a very good point about your deductions, one that you conveniently left out.
Second of all, let’s say that you were actually paying 28%. You, a liberal, would argue that in the name of “fairness” and to punish some wealthy people who work in hedge funds, we should raise the capital gains tax to 28% even if it doesn’t make economic sense to do so.
On the other hand, as a conservative, I’d argue for, say, a 15% flat tax rate (preferably lower, about 10%, but going along with your argument here).
You clearly demonstrate the difference between conservatives and liberals: liberals always seek to raise tax rates on the “rich” because they should pay their “fair share,” not to mention to fund endless entitlement programs. Conservatives seek low taxes across the board.
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Sam, are you serious? I had a really hard time figuring out if your first two paragraphs were actually spot on satire, or the logical consequences of believing that everything falls under “personal responsibility.”
“Joe, are you saying that people that work for hedge funds don’t work for what they’ve earned? I bet they’d be surprised to hear that.”
Really? You don’t see anything problematic about valuing a hedge funder at billions of dollars a year, and, say, a school teacher at 25,000? This is also a problem of what as a society we attach value to — and we’re widely off the mark, as far as I can tell. [And yes, I realize we're supposed to suspend disbelief and imagine that this is all the result of a free market -- but considering that most teachers are working for the government, and that our values/beliefs determine how much we value different things, I still say: the time is out of joint.]
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And considering Sam’s post to Joe, I find this from chemistrydave incredibly ironic:
“Langley, we all know why they do it. They think that most people are not capable of providing for themselves and creating their own prosperity. It is the fundamental tenant of liberalism to look down on others as inferior. Hell, look at the comments on this site by the libs….its always “you should” or “you need”. Just constantly informing others of our “shortcomings” and giving instructions. Its really why nothing is ever achieved in this country.”
I think you’re hanging out with the wrong liberals. Or, considering that your example is the comments made on this site, maybe you don’t know many in person. We all know that not everyone can succeed in capitalist systems — that’s kind of the point of capitalism — but instead of shrugging and saying it’s “personal responsibility” when someone doesn’t have a house/health insurance/money for college, liberals want social programs in place to help those individuals.
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“You don’t see anything problematic about valuing a hedge funder at billions of dollars a year, and, say, a school teacher at 25,000?”
That comment is making my head spin. Does someone need a room at Bellvue?
Most school teachers can barely get through a BA in education, hardly a difficult task. Further, they are doing a terrible job of teaching our students, just consult any single person in this country trying to hire.
Hedgies make money only based on their performance. I think it would be great to have a teaching system like that. Of course, the teachers unions would drop dead because that might involve some real teaching going on. When is the last time a teacher was told “Hey, your students failed this basic exam, so you are fired”?
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Actually Becky since the beginning of time no form of government has guaranteed success of its citizens, but our Republic is the best model and offers the best chance for success. You definition of capitalism is uninformed and emotion based.
Every civilization, society, state, country, empire, etc. has had to deal with their bottom 10%. Those who can’t, and those who won’t help themselves.
You and other liberals are advocating helping the poor by punishing achievement. Why don’t you just give a drunk a drink. Enabling bad behavior encourages more bad behavior. Punishing good behavior will definitely encourage less good behavior. That is morally reprehensible, but we have to be “fair”.
I believe in safety nets. Everyone has the possibility to hit hard times. But that safety net should not be a lifestyle, but rather a helping hand to something better.
If only we could find a way to assuage liberal guilt.
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Once again I’d like to point out that not all liberals believe in punishing the top to help the bottom, and that hard work should be rewarded. However, some people in this country need help, or at the very least need to be taught how to help themselves (at the moment neither are happening).
“I believe in safety nets. Everyone has the possibility to hit hard times. But that safety net should not be a lifestyle, but rather a helping hand to something better.”
I agree with this comment 100%.
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Michael: “Actually Becky since the beginning of time no form of government has guaranteed success of its citizens, but our Republic is the best model and offers the best chance for success. You definition of capitalism is uninformed and emotion based.”
You say that as if you’re contradicting something I actually said, but you seem in fact to be responding to a strawman you’ve made up. I’m not sure what “guaranteed success” would even look like. Also, do you mean the best model existing or the best model possible? Because I’d say we’re a far cry from the best model possible. It seems to me that real patriotism would be trying to improve the model, rather than embracing complacency. Do you really think that a bright child growing up in an impoverished, bad neighborhood has a realistic shot at success in this society? Or that he/she can afford college with the “help” of our underfunded Pell Grant programs? Victim blaming on this thread is starting to sound eerily like Social Darwinism.
And my characterization of capitalism is neither uninformed nor emotionally based. It was actually very off the cuff. Nevertheless, it’s kind of an empirical reality of capitalism that not everyone can be in the top 1%, or even middle class, and that some sort of underclass exists. That’s called an observation, not an emotional response. And you actually confirm this in your own post, that “bottom 10%” you allude to. So it seems to me, that it’s a problem of both trying to have the lowest percentage possible in that bottom bracket, and trying to help those who want out, to get out. (The middle class could be healthier as well: considering that some scholars see our middle class as far less financially stable than the middle class of say 40/50 years ago).
And as for chemistrydave’s comment: I hope you never plan on running for office, because with that attitude toward a notoriously overworked, and underpaid, group of professionals, I don’t think you’d get very far. I really do think that we get what we pay for: if public high schools paid better, then very likely the competition for those jobs would go up, and better educated, more enthusiastic teachers would be the result. And if being a teacher meant having the respect and support of one’s community. (Rather than being scorned as barely able to earn their BA.) But yeah, it’s far easier to blame teachers rather than cultural attitudes toward education, or lack of preschool, or parents who don’t care, or a myriad of other causes.
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Thanks for your career advice but, as you might imagine, Ill pass on it. Strangely enough, you have the same attitude that the rich have about the people who control their hard-earned fortunes : you get what you pay for. But I suppose you cannot see that.
I have been an ardent supporter of merit-based pay in public schools for years. Im sure you are unaware of this, but the only group of people that are NOT for that are the teachers unions. What does that tell you?
Parents
(the people who pay the taxes that pay the teachers) want it, so why don’t they get it for their children? The democratic party has been an unbelievable firewall for merit-based pay in the schools for decades due to their partial control by the teachers unions. Of course, you and others with similar mindsets will continue to blame the wrong people and nothing will be done, because it is easier to continue on in ignorance than see things for what they are. But the truth is that the blame for the terrible system in public schools lies soley at the feet of the democratic party and, more directly with the teachers unions.
Speaking of ignorance, where is “tallytowngal” and her “windfall profits” wisdom now that oil tapped $119 per barrel today?
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Chemistrydave: I may not agree with you, but are you really grouping me under your heading of “ignorance”? If I don’t agree with your solutions, that doesn’t mean that I don’t understand the problems.
That said:
I sympathize with the reasons that teachers’ unions are against pay-for-student-performance. Can you imagine your livelihood being determined by this myth that what you do in a classroom for one academic year will have highly quantifiable effects on all your students? I mean, it would take some serious suspension of disbelief to believe that you can undo the bad effects of all the students’ previous schooling/lack thereof, of their parents’ indifference, of their observations that hard work doesn’t pay off, etc. Children aren’t manufactured products.
I would link “performance pay” with actual teaching practices rather than with how well students do on a couple of state tests (which inevitably mean that teachers teach for the test, rather than the content they believe is important). But as teachers’ unions must recognize, this would also be difficult. I’m not sure if your remark about “getting what one pays for” means you agree or not, but I still think it would be effective to try to recruit better teachers by paying them better wages, and by spending more money to recruit teachers with higher degrees.
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Merit based pay is in some cases a tricky issue, but in many cases school districts, students, and parents have a pretty good idea who the great teachers are and who the terrible teachers are.