In an ideal world, here’s how a representative democracy like ours should work: men and women who wish to be leaders would put their names forward, or be nominated by others, and they’d tell us as honestly and clearly as they can what they believe, what values inspire them, and how they would govern. Based upon these revelations the electorate would vote. Skin color, social class, and income level would play no part in the deliberations.
But that is not how it works, at least not in this broken, imperfect world. The men who fashioned our national government recognized this. They knew in advance that all human governments are plagued by power grabs, abuse of authority, graft, and a million other problems. For precisely this reason they limited–severely–the power that could be exercised by the federal government, reserving most power to the states and the people therein. That was 1787. This is 2012. The intervening years have given us a federal government of unsurpassed power, even deadly power. Because that accrual of power has come slowly and over generations, far too many of us wrongly believe that what we have in Washington is good, or necessary, or at least acceptable.
If we could talk to the Founders today, I don’t think they would be surprised by the fact that the Presidency is up for sale every four years to the person who can buy our vote with promises of a free ride. I don’t think they’d be shocked by the way we are being divided so that we can be conquered politically. They might even chuckle at the notion that we still have a Tea Party willing to challenge the political status quo. They might grin widely when told that the current occupant of the White House is a community organizer, a rabble-rouser who essentially encourages constituent groups to make constant and loud demands until those demands are met. They would probably tell us that they knew it would be like this. “That’s why we drastically limited the powers of the federal government,” they would say.
What the Founders would be shocked over is the manner in which we so casually allowed those limits on governmental power to be wiped away.
That process is a constant one. It’s not about the Obama adminstration alone. It’s about the long view. The radical socialist agenda that has become dominant in the Democrat Party is not going away. It’s constant and it’s insidious. It does not rest. If Barack Obama is removed from office in January 2013, that radical agenda will continue to gnaw at whatever governmental limitations it can find. Those who carry this agenda will bide their time until they control the Oval Office again and they will berate, ridicule, marginalize, and demonize every politician who suggests a new course toward leaner, less expensive, and less powerful government.
Barack Obama desperately needs to hold on to power. Round Two of his effort will be a doubling down of his socialist agenda. To maintain his power he has to divide us along the racial, social, and economic fault lines of the nation. That’s his only hope. In a nation where even the poor have homes, cable TV and automobiles, he’ll proclaim that the rich don’t pay their fair share. Although having a President of African descent requires that racism can’t be a problem for most of the electorate, he’ll play upon racial fears and differences. In a land of riches and opportunity that has given economic hope and vitality to the vast majority of its citizens, he’ll insist that free markets and capitalism are the problem and that more governmental regulation and oversight are the solution. He must divide us to win re-election.
The so-called “Buffett Rule” is an example. Now Obama is using it while referencing his own 2011 tax return which he recently filed with the IRS and released to the public. Named for billionaire Warren Buffett, the Buffett Rule is a game played by Democrats to convince voters that rich people unfairly pay less tax than the average working American. Obama claims his tax rate is unfairly higher than Romney’s, and Warren Buffett claims that his tax rate is unfairly higher than his secretary’s (Obama claims the same thing regarding his own secretary).
To be fair, they have a point. But they aren’t interested in having you understand the details of the issue. They are simply putting into circulation a powerful talking point that the vast majority of their supporters will repeat without ever understanding the issue fully.
Here’s the dirty little secret, and once you understand it, you’ll be smarter than most. What they are taking about is called an “effective tax rate.” Start by doing an internet search on “2011 Obama tax return.” Open just about any article that is written by someone responsible and you’ll discover that the Obamas had an “effective tax rate” of 20.5% for 2011. In other words, 20.5% of all their income was paid to the IRS for federal tax purposes, after deductions were applied and their refund of $24,515 was calculated.
20.5% isn’t their tax rate. It’s their effective tax rate. This is a vital distinction, and it’s one that they don’t explain because their shell game depends upon their supporters failing to grasp it. That one word (“effective”) makes all the difference in the world.
Any person who has enough income to take tax deductions can do the same thing. With every deduction you take on your taxes, you are reducing the amount of money being taxed. In other words, you are reducing your effective tax rate.
Another way to lower your effective tax rate is to earn most of your income by investment rather than salary. Investment income is taxed at a lower rate. Why? To encourage investment, which can be risky. In order to get people to make investments in risky ventures like growing businesses or new companies, the IRS taxes these gains at a lower rate. Of course, we only hear about it when they make money–but billions of dollars every year are lost by investors as well. This, of course, is how billionaire Warren Buffett makes most of his money. His effective tax rate is lower than his secretary’s effective rate because she is taxed on her salary, which is much less risky. He is taxed on his investments because they are risky. He pays much more money to the federal government than she does, but his effective tax rate is lower. (On the other hand, Buffett owns a company called Berkshire Hathaway that owes $1 Billion to the IRS and he’s fighting so he doesn’t have to pay it!)
I am certainly in favor of a simpler tax code. The present code has thousands of rules, and the rules change every year. It’s laughable. It’s a bludgeon used by the federal government to beat up on average Americans.
President Obama says he wants to reform the tax code, but when he says “reform” he obviously doesn’t mean “simplify.” He’s going after millionaires with a proposed tax surcharge on top of their present taxes, and he signed a healthcare law that hits tanning salons with a tax paid by no one else. Does that sound like a simpler tax code to you?
A simple tax code would be one where everyone pays the same tax rate on all their income, no matter its source, and no matter how much money they make. Why must we increase the tax rate as a person makes more money? Let’s say the flat rate federal tax for all income was 10%. A professional making $50,000 would pay $5,000 in tax. Someone making $200,000 would pay $20,000. A million in income would produce $100,000 in taxes, and so on. The richer would pay more simply because 10% of more money is more tax revenue. That is a fine way to collect taxes. There is no reason to raise the tax rate itself. It’s nothing more than legal robbery by a greedy Congress that needs the money to buy votes.
By the way, I like 10%. I simply can find no reason whatsoever that anyone should give more than 10% of their income to the federal government. After all, it’s twice what God gets on Sunday!