So New York Sen. Charles Schumer, the Democrats' hatchet man, came up with the idea that Obama should shift his political line of attack against "millionaires and billionaires." Such is the level of desperation in a White House that's run out of new ideas about how to accelerate an economy that barely grew in the third quarter of 2011.
Obama bought it and threw out the first pitch in a packed House chamber Tuesday night: The IRS would impose a surcharge on any millionaire whose effective federal tax rate dropped below 30 percent. They would do it by ending all tax deductions and exemptions for such taxpayers, except charitable contributions.
The president is obsessed by what the White House calls the Buffet rule, which the Wall Street Journal says "is rooted in the fairy tale that taxes on the wealthy are lower than on the middle class."
In fact, the Congressional Budget Office says that the effective federal tax rate for the top 1 percent incomes is around 29.5 percent.
That's double the 15.1 percent paid by middle-class families, CBO says.
The reason billionaire stock picker Warren Buffet pays just 15 percent on most if not all of his earnings -- a lower rate than his secretary, he says -- is because virtually all of his income comes from capital gains and dividends which are taxed at a lower rate for a number of good reasons.
The government wants to encourage investment, the mother's milk of a growing economy, and there is a long, bipartisan tradition of cutting capital gains/dividend rates to do that -- with much success.
President Bill Clinton cut it down to 20 percent and tax revenue from an investment-led employment boom ended up balancing the budget, with a surplus to boot. President George W. Bush cut it further to the present 15 percent rate.
But Obama isn't interested in growing the economic pie through tax incentives for increased investment, business expansion and wealth creation. He says he's interested only in "fairness," his word for slicing up the existing pie in smaller pieces and redistributing the money to those who have less.
This is a painful prescription for slower economic growth and the severe unemployment levels we are still enduring, about which the president has little or nothing to say.
If you think the Obama economy is going to get a lot better in the coming year, listen to the bearish signal the Federal Reserve Board sent Wednesday.
After a very lengthy examination of the economy's grim prospects, the Fed voted nearly unanimously to keep its nearly zero interest rates in place through 2014 because it expects the unemployment rate will remain quite high for the next three years.
Fed forecasters said the jobless rate will stay around 8.5 percent for much of this year and won't decline to between 6.7 percent and 7.6 percent until the end of 2014. Yikes!
The national unemployment rate is now a few tenths of one percent below 9 percent, with nearly a dozen states still struggling to overcome hope-crushing jobless rates of from 10 to 13 percent.
So there was Barack Obama at the House podium Tuesday night, clueless about how to get the U.S. jobs machine running at full throttle, except to call for more infrastructure spending in the future and to vow that he's not going to back down from his failed, financially challenged clean energy projects.
Okay, so the last project at the Solyndra solar panel plant went bankrupt and cost taxpayers $500 million, but these "investments" will pay off in the decades to come, he says. Sure.
He also called for more public works spending, and even punitive tax increases on manufacturers that he said will boost U.S. manufacturing. But a week before, he killed the Keystone XL oil pipeline that would have put 20,000 Americans to work, many in good paying manufacturing jobs. The Washington Post's economic columnist Robert J. Samuelson called Obama's decision "an act of national insanity."
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