What is True 'Tax Fairness' Anyway, Mr. Obama?

By Frank Hill

Don't you just love the theatre of politics?

President Obama gave a great speech last night for the State of the Union. He's a great speaker, what can anyone say about that?

But the backdrop of the SOTU speech was clearly outlined by the release of Mitt Romney's tax returns the previous day which showed that he paid 'only' an effective tax rate of 15%, 'lower than the tax rate of Warren Buffett's secretary yada, yada, yada'.

One of President Obama's campaign tactics will clearly be 'class warfare'. Call it whatever you want but his political handlers obviously see trends in national polling that tell them that 'running against the rich' and talking about disparity in income might help him win re-election in November.

The sleight-of-hand in his delivery is what bothers us more than anything. Sure there are different tax 'rates' in the tax code but those were passed by Congress over the years for different reasons. Long-term invested capital has been determined by Congress (which is the constitutional way to do it) to be 'more valuable' since it helps create jobs in the long-run and if you tax less of it, the natural human tendency is to do more of it.

That just stands to reason, doesn't it?

But to even come close to asserting that Mitt Romney paid 'less' taxes in any way, shape, form or fashion than Warren Buffett's secretary is mental gymnastics on LSD, crack cocaine and crystal meth to the nth degree. No national figure should be able to make such an absurd assertion without full disclosure. Which is why President Obama deserves to be chastised for doing so last night.

Mitt Romney pays about $3 million in taxes each year. That is one single American taxpayer among 140 million households who wrote a check to Uncle Sam at the US Department of Treasury for 3 million smackers. 3 million of legal US tender greenbacks.

Have we gotten your attention yet, class? $3 million is $3 million from 1 single person!

All we would need is 866,667 other taxpayers just like Mitt Romney paying $3 million per year...and then no one else, including Warren Buffett's secretary, would have to pay one thin dime in income or payroll taxes or corporate income taxes or excise taxes or estate taxes next year!

Now we have your attention, don't we class? Not a single other solitary person in the entire country! Wouldn't you like to not have to write any more checks to the IRS or have that niggling 'FICA' tax deducted from your paycheck every other week?

Heck! President Obama has got it all wrong! Why not try to find a way to get 866,666 other Americans out of 140 million taxpaying households to make so much money that they just fund our entire government for the rest of us?

Of course, we are being facetious...up to a point.

Our main fear has long been that as we seek to drop more and more people off of the tax rolls, our democracy gets 'weaker' as the tension between 'paying taxes' and 'receiving the benefits' of what those said-same taxes provide for you (defense, education, roads) diminishes.

We know enough about history to fear when a very concentrated few very wealthy people or single individual controls the purse-strings to any country. (See the Oligarchs in ancient Athens)

We also think it is very healthy for EVERYONE to contribute something to the national treasury in the form of taxes because that makes their vote really 'count' each and every time they cast it during an election cycle. (more on that in the next posting)

So take this 'the rich don't pay their fair share' malarkey with a huge block of salt. It is just pure political posturing and gamesmenship played by professional consultants who have one goal and one goal only: 'Get my man re-elected in November.'

These guys would tell the President to promise each one of you a peanut butter-and-jelly sandwich every day for the rest of your lives if their polling told them that it would work and you would vote for Obama based on that delicious promise.

So be careful what you tell any pollster when they call your home. You might just get it.

We will explain further in our next post why we think the trick to getting smaller, more efficiently-spending and spendthrift government is to threaten to raise taxes on everyone if we want more government.

It is just common-sensical human nature at work as well.

(Editor's Note: Frank Hill's resumé includes working as chief of staff for Senator Elizabeth Dole and Congressman Alex McMillan, serving on the House Budget Committee and serving on the Commission on Entitlement and Tax Reform. He takes on politics from a fiercely independent perspective at the blog Telemachus).

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