President Obama's "jobs" and "deficit reduction" plans are widely viewed as political machinations designed to energize his liberal base and concoct a "GOP obstructionism" narrative ahead of the 2012 elections. Is that strategy paying political dividends? Yes. For Republicans. The president's proposals have thus fair failed to impress almost anyone; they've divided Democrats, alienated independents, underwhelmed credit agencies, and even drawn negative mainstream media scruity. My attempt at a comprehensive fail list:
(1) Democratic Rift - Moderate Senate Democrats are mobilizing to "put the breaks" on Obama's tax hikes. Harry Reid doesn't know what to do with the plan, suggesting that he'll get around to it eventually -- a far cry from the president's constant exhortations for immediate action. Chuck Schumer finds elements of the president's tax increases "unacceptable," and is advocating a (possibly unconstitutional) remedy. Former President Bill Clinton warned that now is not the time to raise taxes on anyone, and urged a moratorium on new federal regulations. Obama's plan raises taxes by $1.5 Trillion.
(2) Independent voters turned off - Non-affiliated voters oppose Stimulus 2.0 by a twenty-point margin, and a supermajority rejects the president's call for swift action. A new McClatchy/Marist poll shows that voters now expect Obama to lose next year by a 14-point margin, and that even you-know-who is now within striking distance of The One.
(3) Credit upgrade unlikely - Reuters' analysis is decidedly unkind to the president's plan: "President Barack Obama's plan to tame U.S. budget deficits probably relies too much on ending wars and too little on tackling health care spending to impress Wall Street credit rating agencies." Indeed. Obama's proposal barely touches entitlement spending, yet depends on $1 Trillion in gimmicky war "cuts" for nearly one-third of its illusory overall "savings." The latest permutation of moon/yogurt accounting.
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(4) MSM fact-checkers pounce - ABC News and the Associated Press agree: Obama's Buffett Tax claims aren't true. AP concludes:
On average, the wealthiest people in America pay a lot more taxes than the middle class or the poor, according to private and government data. They pay at a higher rate, and as a group, they contribute a much larger share of the overall taxes collected by the federal government. The 10 percent of households with the highest incomes pay more than half of all federal taxes. They pay more than 70 percent of federal income taxes, according to the Congressional Budget Office.This year, households making more than $1 million will pay an average of 29.1 percent of their income in federal taxes, including income taxes, payroll taxes and other taxes, according to the Tax Policy Center, a Washington think tank. Households making between $50,000 and $75,000 will pay an average of 15 percent of their income in federal taxes. Lower-income households will pay less. For example, households making between $40,000 and $50,000 will pay an average of 12.5 percent of their income in federal taxes. Households making between $20,000 and $30,000 will pay 5.7 percent.
The Weekly Standard's Mark Hemingway frames the issue another way, contrasting the total tax bill of America's top 0.1 percent of wage-earners with the country's bottom 80 percent. His remarkable conclusion:
So, all told, the 80 percent of Americans whose income placed them in one of these first four quintiles of income-earners combined to pay 10.9 percent of the total federal income tax burden. Put otherwise, this 80 percent of the citizenry paid about $1 out of every $9 that was paid in federal income taxes nationwide. Meanwhile, Americans in the highest 0.1 percent of all income-earners — these are the very rich, with incomes of at least $1.974 million — paid 16.4 percent of the total federal tax burden. Essentially, one out of every $6 paid in federal income tax was paid by this 0.1 percent of the citizenry.
Yet the White House continues to bray about "fair shares," and the like. Even if Obama gets his way here -- which he won't -- how much revenue would Obama's millionaires tax yield? Not much, according to The Atlantic's David Indiviglio:
If you put a floor at their current marginal tax rate of 35%, the government would obtain $37 billion more dollars. That might sound like a lot, but it amounts to just 2.5% of the 2009 $1.5 trillion deficit (which is the red line shown). If you increase the floor to the pre-Bush-tax-cut marginal rate of 39.6%, the additional revenue grows a bit -- to $66 billion, or 4.5% of the year's deficit.
(5) The math doesn't add up - The 2011 budget deficit is virtually unchanged from 2009's $1.5 Trillion mark. Based on Indiviglio's calculations, even if Obama taxed every millionaire at 100 percent, the resulting revenue -- based on the false assumptions that (a) wealthy taxpayers wouldn't find creative new ways to dodge these confiscatory rates, and that (b) the unprecedented tax binge wouldn't damage the economy at all -- wouldn't even cover one quarter of this year's deficit. Do your thing, bar graph:
Unfortunately for President Obama, it appears that math is just as opposed to his jobs/deficit reduction package as many Congressional Democrats are.
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