Obama's 'Fairness' Fiction

"Fairness," an elusive idea normally exploited by spoiled children, is now the foundation of the Democratic Party's economy policy.

President Barack Obama kicked off his re-election campaign in earnest this week with a stirring message of hope and unity for the American people: Eat the rich!

According to media reports, "fairness" will be one of the central messages of the entire Obama campaign. So fittingly, the Senate will pretend to vote on the Paying a Fair Share Act—or the "Buffett rule"—later this week. Sure, the United States may own $15 trillion of debt and a stagnant, underemployed economy, but nothing says leadership like coordinating your populist message with a sham congressional vote to propel fundraising in Florida.

"Fairness," an elusive idea normally exploited by spoiled children, is now the foundation of the Democratic Party's economy policy. If implemented, anyone earning $1 million a year or more would be required to pay at least 30 percent of his income in taxes. That would help reduce the deficit by raising $31 billion over 11 years, according to congressional tax analysts—2.8 billion a year, or less than a day's worth of new debt incurred by Washington.

That's nothing to sneeze at, says Jason Furman, a key member of the Obama economic team. "We think $47 billion is actually a meaningful amount of money for us and most Americans," he explained, overestimating the Buffett rule. And it is. It is meaningful enough to be the centerpiece of the Obama campaign, though, not meaningful enough to cut from a budget and save taxpayers the burden of paying it back.

The Buffett tax offers little in the way of revenue, because inconveniently, history shows that lowering rates on investment income typically benefits federal treasury. Higher rates, on the other hand, incentivize investors to unearth inventive ways to avoid paying taxes. It also means that investors will often stop allocating capital productively and start parking money in existing investments to avoid taxation.

Most economists (as the president likes to say) agree that the most effective tax system avoids taxing income, dividends and capital gains and focuses instead on promoting savings and investment. Not sure whether it's fair, but it would probably be smarter to reward, rather than punish, those who risk and succeed. So, the opposite of a bailout.

As for fairness, the wealthy already pay more than a fair share (the top 1 percent of income earners make 16 percent of income but pay nearly 40 percent of federal income taxes), and—notwithstanding Warren Buffett's secretary—every category of the wealthy pays higher tax rates than the non-rich. (Let's hope that Obama doesn't start getting technical about "fairness," because the plutocrats would be in for a huge tax break.)

And Obama's plans, as The Wall Street Journal pointed out this week, would also raise the capital gains tax to 20 percent on anyone who earns $200,000 or more (or couples making $250,000 or more) and add a 3.8 percent surtax to fund Obamacare—all before implementing the Buffett tax.

We can never know exactly how the economy will react to policy, but it's the parameters of the conversation—based largely on fiction—that are probably the most harmful part of this distraction. Despite the implicit message of the president, wealthy people are not wealthy because they are taking something from the poor or from government. And they don't stop anyone else from being wealthy.

And the wealthy did not create our debt; government did. Government—this administration in particular but all of them in general—is, by nature, risk-averse and never deals with the consequences of its failed "investments." It is the un-entrepreneur. Really, should the head of an organization that annually spends $1.6 trillion it doesn't have be setting the parameters for a discussion on "fairness"?

David Harsanyi is a columnist and senior reporter at Human Events. Follow him on Twitter @davidharsanyi.

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  • ||

    "Fairness," an elusive idea normally exploited by spoiled children, is now the foundation of the Democratic Party's economy policy.

    Now? I'm sorry, I thought "fair" was a fundamental principle of modern liberalism. It's not some radical new line of thinking.

  • shrike||

    Not just liberals.

    There is a new set of wingnuts pimping something called a "Fair" tax. Its "fair" because it eliminates capital gains and estate taxes altogether.

  • sarcasmic||

    Why should capital gains and estates be taxed?
    Wasn't the income that allowed for those investments taxes already?
    Doesn't that amount to double taxation?

  • Rich||

    "Be thankful I don't take it all"

  • ||

    Capital Gains are still income. In my view, "Income" is any positive addition to overall wealth. (*)

    However, that's not overall "individual" wealth. A transference of wealth from one individual to another should be a non-taxable event, as it does not involve a true increase. The inheriting individual simply assumes the tax basis of the inherited assets.

    (*) And yes, I understand that Income can also be consider a wealth transfer. It's...complicated. I certainly can't make a full logical argument here equating labor income with capital income, but in general I believe they are equivalent.

  • anon||

    (*) And yes, I understand that Income can also be consider a wealth transfer. It's...complicated. I certainly can't make a full logical argument

    I fixed that for ya. No charge.

  • Zeb||

    What the fuck was the point of that? When is the stupid "fixed it for you" shit going to play out?

  • Flyboy||

    How about the fact that the capital gain is the result of an increased valuation of the company, typically attributable to increased revenues, which are taxed as corporate income? Dividends and capital gains are both, fundamentally, the distribution of growth to the owners, and that growth has already been taxed once. Why should they be subject to double taxation?

  • shrike||

    Corporations are persons.

    When a person is taxed that event is finished. A gain or dividend is passed to another person and that is another taxable event.

    It took the 16th Amendment to legitimize this mess. I am just commenting on how the term "fair" is bandied about to politically benefit a person.

  • Kwanzaa Cake||

    The "another person" to which you refer here is the owner of said corporation. Corporations were invented to separate ownership and control so as to permit limitations on liability and spur capital investment. They were NOT created as an artificial line of demaraction between ownership and profit so as to maximize government confiscation of wealth, as you are now proposing.

  • mr simple||

    Ahh, estate taxes. Another "fairness" tax pushed by Buffett that makes him rich.

  • shrike||

    Buffett believes in a meritocracy so he is stiffing his kids out of $45 billion.

  • mr simple||

    I don't know or care what kind of relationship he has with his kids, but his company directly benefits from being able to buy and sell family farms and businesses, etc., that the kids who inherit can't pay the death tax on. Not that there's anything wrong with having such a business or profit, but let's not act like he pushes such taxes and policies for altruistic reasons.

  • ||

    Just ignore the sockpuppet, dude. Just walk away, and I spare your lives.

  • Rob||

    There is a new set of wingnuts pimping something called a "Fair" tax. Its "fair" because it eliminates capital gains and estate taxes altogether.

    Nice fake-out.

    The "Fair" tax replaces all federal taxes with a single national inclusive sales-tax on all goods and services. Business would no longer directly pay taxes, and the tax burder would be shifted to consumers in a more transparent fashion than we have today.

    At the same time people will be receiving a monthly "prebate" on the amount of taxes a person would have paid when buying things up to a specific dollar amount ($2,000/month for example). Anyone spending below this level would essentially have a negative income tax.

    The more you spend, the more taxes you end up paying, and people earning below whatever dollar figure is set basically are paying $0 in taxes.

    I'm sure I butchered the description, but you can get a more detailed explanation at http://www.fairtax.org, or check out The Fair Tax Book by Neal Boortz and John Linder.

  • Heroic Mulatto||

    The Democratic Party didn't start being "modern liberals" until the Dixiecrats threw their temper tantrum over Jim Crow and left the party in droves.

  • Killazontherun||

    That is not quite what happened:

    Left populism and progressive era socialist ideology dominated the dixiecrat mindset.

    After their 1948 spat they mostly returned to the fold. From the Wikipedia: The party did not run local or state candidates, and after the 1948 election its leaders generally returned to the Democratic Party.[2] The Dixiecrats had little short-run impact on politics. However, they did have a long-term impact. The Dixiecrats began the weakening of the "Solid South" (the Democratic Party's total control of presidential elections in the South).[3]

    True, some high profile leaders like Jesse Helms are exceptions to the rule. But with North Carolina's growing importance in the banking industry we were going to turn GOP anyway.

    Also, Democrats losing in the South after 1964 due to principled actions on civil rights is self love apocrypha:

    http://en.wikipedia.org/wiki/U.....tion,_1976

    http://en.wikipedia.org/wiki/U.....tion,_1960

    Carter did better than Kennedy in Dixie. Democrats held on to their seats in Congress with very slow inroads by Republicans until Reagan.

  • Heroic Mulatto||

    Left populism and progressive era socialist ideology dominated the dixiecrat mindset.

    That's true. I'll concede that point.

  • Killazontherun||

    And Jesse Helms was a dick. I'll gladly concede that point!

  • Killazontherun||

    Slow, even though the national party ran hippies for their presidential candidates in 1968 and 1972 because the integration of the GOP into the South was not a smooth process as veterans of that struggle during the 1960's and 1970's have informed me. The democratic party machine had it's tentacles in every patronage job from dog catcher to state librarian. You don't destroy an institution that has had uncontested rule over a huge chunk of geography for over a hundred years over night.

  • WTF||

    "Fairness," an elusive idea normally exploited by spoiled children..."

    This sums up the fact that the whole basis of liberal argument boils down to the equivalent of an 8-year old stamping his feet and whining "It's not FAIRRR!"

  • tarran||

    Except they won't even pay that.

    The dirty little secret here is that life insurance policies are exempted.

    So, if you get a IUL policy, and dump the money you would otherwise invest into the insurance, the investment income is completely untaxed. You can take money out, borrow money using it as collateral, etc while losing 1% in fees whilst saving huge amounts in taxes.

    This rule will be a boon to life insurance companies, one of the biggest of which is owned by Warren Buffett.

    One of the things I love about my 'liberal' friends is how they let that guy piss on them and believe him when he says it's just rain.

  • Doctor Whom||

    Shhh. Liberals are the only people whom the plutocrats haven't brainwashed into voting against their own self-interest. NPR and The New York Times tell me so.

  • mr simple||

    But he's just an honest billionaire, not like those dirty Kochsuckers.

  • shrike||

    No, the Kochs are rent-seekers and Buffett is not. We have been over this before.

  • mr simple||

    Right, except you got the names backwards.

  • shrike||

    No I didn't. I looked up the lobbying expenditures of both. It isn't close. The Kochs are classic rent-seekers.

  • anon||

    And by "looked up," of course Shriek means "made up."

  • mr simple||

    The difference is they lobby to make sure they don't get the shaft by government. Congress doesn't like businesses who don't send people to Washington to wine and dine them and the "investigations" can cost a lot of money, as the Koch's found out.

  • shrike||

    No, they lobby for pipelines, eminent domain, preferential treatment on expectorants and pollution, land leases, and depletion allowances.

    Its a matter of public record. I have won this argument before here. The Kochs are the very definition of rent seekers.

  • anon||

    You have?

    I'm highly skeptical of that.

  • Flyboy||

    You protest long loud; a link to the evidence would be oh-so-much shorter.

  • T||

    Because lobbying so you don't get fucked by the legislature is exactly the same as lobbying for rent-seeking, and can be determined by expenditures alone.

  • anon||

    Not only that, but I'd be willing to bet that he's only taking personal lobbying expenditures into account, and not those of say ... Geico, Berkshire Hathaway, Clayton Homes, Dairy Queen, Netjets, Burlington Northern Santa Fe Corp, et al.

  • ||

    Guys, guys...why do you respond to the obvious sockpuppet? Why do you let it wind you up? It's not even real. Just walk away, and there can be an end to the horror.

  • shrike||

    Right, because the board is so much more fun when you guys trade banalities about comic-book heroes and scary race crimes.

  • ||

    Breaking character, sockpuppet? I am disappoint. Not really, but thanks for proving my point.

  • Soc Indv Sparky||

    Right, because the board is so much more fun when you guys trade banalities about comic-book heroes and scary race crimes.

    Dude, reason is srs bsns yo. ಠ_ಠ

  • tarran||

    Come on, Epi, Bush supporters like Shrike are in very short supply.

    It's like giving cats a little mousy to play with. Except the mousy dies, while shrike goes away and returns a few hours later to play again.

  • anon||

    I agree Tarran. Bush supporters are a fun bunch to toy with. And Shrike, unlike most, -always- comes back for more.

  • sarcasmic||

    The rich don't pay their fair share.
    How do we know this? Because they're rich.
    If they paid their fair share then they wouldn't be rich.
    Circular logic is circular.

  • Rich||

    $31 billion over 11 years, ... or less than a day's worth of new debt incurred by Washington. That's nothing to sneeze at, says Jason Furman, a key member of the Obama economic team.

    Furman's correct. It's something to bite one's thumb at.

  • Loki||

    I think the WSJ's list of 200 careers had it wrong. The best career isn's software engineer, it's "member of the Obama economic team". All you have to do is spout a bunch populist class envy stoking bullshit, and get paid a salary that most of us can only dream about.

  • R C Dean||

    Sorry, but if your signature fiscal responsibility policy doesn't even cover one day of deficit spending, it is something to sneeze, sneer, and scoff at.

  • $31 billion over 11 years||

    Do you bite your thumb at me, Sir?

  • ||

    The pic on the blog front page cracked me the hell up. No alt text necessary.

  • sarcasmic||

    "Daddy's gonna beat me 'cause I didn't get first place"

  • Loki||

    That has to be the only reason he's sulking. He came in 4th and still gets a trophy. What's that about? I thought only the top 3 get a trophy. Or is that the trophy he got just for showing up?

  • Soc Indv Sparky||

    Could be the participation trophy, or the team spirit trophy, or the most improved player trophy, or the self esteem trophy... you get the picture.

  • ||

    Somebody was 4th place in a bracket of 4 kids.

  • BakedPenguin||

    Yay!

  • ||

    "You get the 'Best at Getting Pinned' trophy! Great work!"

  • anon||

    We can't have that, teh gayz will come and take all the trophies.

  • ||

    "Yep. He went in there and wrestled with all kinds o' guys. He wasn't too good, though. This one black guy had him pinned down for fifteen minutes straight!"

  • H. Reardon||

    Hey, my son won a wresting trophy that way. Are you trying to tell me that he didn't earn it?

    If you're ever in the mood to witness salty tears emanating from a plethora of pre-pubescent boys, attend a youth wresting tournament.

  • T||

    Or go to the monocle factory.

  • Claudio Ibarra||

    "That would help reduce the deficit by raising $31 billion over 11 years, according to congressional tax analysts—2.8 billion a year, or less than a day's worth of new debt incurred by Washington."

    Where does Furman's 47B come from, then?

  • ||

    His ass.

  • NotSure||

    I still do not understand when they say rich people don't pay their "fair share". The rich people still pay incredibly more money than the people accusing them of being unfair. How is it fair for somebody to pay more money for getting the same thing that somebody else can get even for free ?

  • sarcasmic||

    They're rich, that's why. If they paid their fair share then they wouldn't be rich.

  • TomB||

    Shh. Stop making sense.

  • Soc Indv Sparky||

    Bullshit, that's not sense. The fact that 49% of Americans don't pay any taxes at all is just a lazy right-wing meme.

    /Tony,shrike,o3

  • mad libertarian guy||

    But payroll taxes, sales taxes, derpty derpity derp!

  • Brandon||

    Is this the new anonbot? Isn't it supposed to link to something, or talk about its bisexual discoveries?

  • Pro Libertate||

    "Fairness" is taking from the productive and giving it to the less productive.

  • WTF||

    Idiots like 'Tony' actually believe this.

  • anon||

    Of course. Didn't you know? The Man is holding you down; keeping you from being rich.

    Not the Government. No, Government is here to HELP you!

    /sic

  • Pro Libertate||

    I daresay we'd all be much better off in a free(er) market economy, with less government interference and favoritism. Also, much, much less spending and taxing.

  • anon||

    But why do you hate America?

  • Pro Libertate||

    My family has been here for centuries. I'm hereby declaring ownership of the country.

  • anon||

    Fuck yeah. I support this.

  • Soc Indv Sparky||

    My family has been here for centuries. I'm hereby declaring ownership of the country.

    And after the government is done extracting the estate tax from you, you should be left with approximately your plot of land.

  • SusanM||

    You're right. It's not fair that things are the way they are now!

  • mr simple||

    This isn't even as strong a number as the one the administration was throwing around when they wanted to let the Bush tax cuts expire on the rich. I remember Timmy Geithner making the rounds talking about how silly it was not to collect the $680 billion over ten years from the rich that would help our country, not mentioning how it wouldn't be half of one years worth of deficit.

  • Loki||

    According to media reports, "fairness" class warfare bullshit will be one of the central messages of the entire Obama campaign.

    FTFY

  • Pro Libertate||

    Interesting how that seems to be their whole message now--racism and classism.

  • anon||

    One day maybe they'll run out of men of straw to beat.

  • Pro Libertate||

    No, the beauty of that system is that it never has to end. There's always a new enemy.

  • The Unknown Pundit||

    Um, wheat grows every year, so we will always have straw.

  • Loki||

    That's all they have. It's not like he can run on his record.

  • Pro Libertate||

    We're so effed up now. In a sane society, someone this openly inept and bad for the country would have no choice but to resign. But since we'll buy any set of ridiculous lies, people like him can just keep trying.

  • anon||

    Well, on the bright side, it's proof that literally anyone can become President.

  • sarcasmic||

    In a sane society no one person would be given that much power because no human being is competent enough to handle it.

  • juris imprudent||

    I think Team Obama knows they aren't getting the independent vote that bought into Hope and Change last time around. They also know they haven't delivered shit to the left wing despite all the love. So fire up the base, throw them red meat (a metaphor too funny when it comes to leftie vegans), and ride those idiots as hard as possible to a squeeker of a victory.

  • ||

    Alright, enough of this crap.

    Let's level everything, take every cent and every stick of property from every human being, and burn it all in a huge pile.

    Now that we're all equal, no laws (excepting against murder theft). None. And here's the deal; there never can be in the future. I gave you your social leveling; now deal with the fact that some of those people inevitably rose to the top of their own accord.

  • anon||

    "I'm still in the bible! Still in the bible!"

  • Pro Libertate||

    Screw that. There's plenty of opportunity for everyone here already, if we'd just stop shrinking the pie with all of this corrupt government theft and other bullshit.

  • Zeb||

    Yeah, I think that "from now on, no more stealing and no more impeding economic freedom" is the best policy.

  • sarcasmic||

    Who will enforce the law? Someone will have to be given the monopoly on force.
    Once they have that monopoly, then they can steal from you, call it a tax, and there ain't a damn thing you can do about it because they're the ones you call for help when someone steals from you.
    That's all government is.

  • Zeb||

    That's a great idea for the giant fire, if nothing else. This is a fun hypothetical to pose to people who say that redistribution is necessary because of past injustice. But there are also a lot of people who know full well that people are not equally capable of being productive and can't imagine a way to help the most useless (or just unfortunate) people without government doing it. Too many people buy the lie that the government is the people and just laugh at anyone who points out that wealth redistribution is just stealing by another name.

  • anon||

    I forget where the quote is from, but I really do think I'd rather a despot than the do-gooders we have in charge. At least a despot would still have to deal with his conscience.

  • ||

    You're probably thinking of the C.S. Lewis quote.

  • ||

    "You don't mess around with God's America!"

  • The Unknown Pundit||

    America! Fuck yeah!

  • Jerryskids||

    "Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience." - C. S. Lewis

    I post it somewhere about once a week.

  • Jerryskids||

    I think most of you are discussing what is fair rather than what is "fair". Before you can have a meaningful discussion, you have to define your terms.

    Is me versus Mike Tyson one-on-one a fair fight? To those of us who say a "fair" fight is one where we are both following the same rules, it is a fair fight. To those who think a "fair" fight is one where both of us have an equal chance of winning, then "fairness" dictates Mike must fight with one arm tied behind his back. And once he still beats the crap out of me, we must have a re-match with Mike having both arms tied behind his back. And then a re-match with some other system of handicaps, and again and again, because if either one of us wins that is proof that it was not a fair fight.

    See, for this definition of fairness, the fairness of a system cannot be determined ahead of time, it can only be determined after the fact. Any time you have unequal outcomes, you have unfairness. And since you will always have unequal outcomes, you have an unending demand for the services of fairness arbiters. Moral busybodies, in other words.

    Since they only want fairness, who can possibly be against that? Only those of us morally repugnant enough to think that fairness means something other than absolute equality, enforced at gunpoint if necessary. And it will always be necessary. Oh yes.

  • Muad'Dib||

    Divide et impera!

    Thus spake Caesar/Napoleon/Obama/et al.

  • Marty Feldman's Eyes||

    Let's see, federal budget is 3.796 trillion, and let's say there are (very) approximately 230,000,000 adults and 115,000,000 households. So I'd say everyone's "fair share" is about $16,500, or $33,000 per year, depending how you want to divide it up.

  • Dick Fitzwell||

    Damn you!!!

  • Kwanzaa Cake||

    What federal budget?

  • Matrix||

    as I said on the CNN opinion piece praising this abominable legislation... "There is nothing fair about forcing people to pay taxes."

  • AlmightyJB||

    And since the new taxes do not include investment income, Buffet won't pay a dime more under the Buffet rule. Not that he would pay anyways, he's been fighting over a billion dollars in back taxes he owes for over a decade.

  • Kwanzaa Cake||

    It's NetJets that allegedly owes the taxes, not Buffett. NetJets is owned by Berkshire, so Buffett has a fiduciary responsibility to act in the best interests of Berkshire shareholders when making decisions about NetJet's taxes and money.

    I despise Buffett's tax-raising campaign as much as anyone here, but this cirticism seems to miss the mark.

  • Dick Fitzwell||

    That would help reduce the deficit by raising $31 billion over 11 years, according to congressional tax analysts

    New revenue to pay off debt?!? I l'ed ol at that. That money would be better spent on pancakes for yuppies or studying the effects of cocaine on the sex drive of the Japanese quail. Who really believes that that money would go toward the debt?

  • Kwanzaa Cake||

    No one should. Shit, they even wrote into federal law that TARP repayments would go twoards deficit reduction. When the money came in, it was promptly spent. Add this to the long, sad tale of other decpetions (social security trust fund, anyone?) and it amazing that anyone takes the positions that the government can be trusted to do anything.

  • Trespassers W||

    Debt != deficit.

  • califernian||

    two things.

    1. Why is it always the rich who pay too little and never the working class who pays too much? I've yet to read one pundit arguing that yes, the tax rates are unfair and we should lower them on the working class.

    2. A BuffettRule will quickly if not immediately degenerate to where it applies to anyone who makes a comfortable living.

  • golds||

    Why is it that the rich, who pay most of the taxes (the top 10% pay 70% of the taxes), pay too little?

    Why is there no recognition that government boondoggles should not be supported by anyone?

    Why is it that 50% of the people do not pay income taxes?

  • juris imprudent||

    A BuffettRule will...

    See e.g., Alternative Minimum Tax.

    It's like its an Iron Law or something.

  • Scott @ Engage America||

    The Joint Committee on Taxation (JCT) says that the Buffet Rule will raise close to $47 billion between 2012 and 2022.

    Just recently the CBO reported that that if laws remain unchanged the federal budget deficit for this year will be $1.1 trillion (http://1.usa.gov/xju6K9). That number is in addition to total debt over $15 Trillion and projections that by 2021 federal debt will be over $20 trillion (http://1.usa.gov/wt4DPi).

    Clearly, our debt problem is a spending problem, and tax increases for "fairness" won't help.

  • golds||

    The problem with fair is that it is always subjective.

    Is it fair to tax people (regardless of their level of income) to pay off Obama's campaign donors, as was done with the stimulus?

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