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David Harsanyi
David Harsanyi
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Obama's 'Fairness' Fiction


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. To find out more about David Harsanyi and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at



5 Comments | Post Comment
"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."

Of course, the unspoken "if" in this statement is that it will only raise that amount of tax revenue IF those it affects do nothing in response. Given the fact that most people in that income bracket (with the possible exception of many actors and professional ahtletes) aren't stupid, I'd say the chances of that happening are pretty slim.

Remember when they tried to impose a "luxury tax" on expensive yachts back in the early Clinton days? It didn't raise a dime of revenue. All it did was destroy the yacht-building industry.
Comment: #1
Posted by: Jeff Gunn
Tue Apr 10, 2012 9:22 PM
Consider that the Conservative Republicans with their "business man" Romney at the helm wish to throw out all laws and regulations put in place over the course of many years and take us back to a time and place we spent time, blood, and money to escape.

Conservative Americans see collusion as waste and arrive at the conclusion that government should be run like a business, without ever stopping to think for half a second about what that means. Many people believe that if government were run more like a business, it would work more efficiently. If so, if government were to hold efficiency to be of paramount importance, it would simply kill the infirm, rather than offer Social Security.
Of course, this is contrary to the US Constitution's promise to “promote the general welfare,” understood as a means of GUARANTEEING “life, liberty, and the pursuit of happiness.” But markets, by definition, offer few guarantees. I Sometimes the bottom line isn't the bottom line.
There are other problems with government being run like a business. Businesses are not democratic organizations, they are authoritarian. You do what your boss tells you to do, and you don't get to vote your boss out of office if you don't like it. Their management practices are in many cases proprietary (as opposed to publicly announced laws) and their office holders are appointed, rather than elected. There is no rule of law.
Business (of the desirable, market-based kind) needs competition, but government needs loyalty.

It doesn't even make sense to think of government as competing: the whole point of a constitutional republic is that the state has a monopoly on the legitimate use of force as a means of coercion; the alternative is vigilante justice.
The sort of absolute economic freedom advocated by American Conservatives is not the pinnacle of civil society, but its complete opposite.
Liberty is having assurances everybody obeys the same law.
Provided that individuals have a say in what laws are passed, freedom is having to obey only the law, and not yield to the whims of others.

The Conservative trend to privatize governmental services is contrary to the goals of a just, democratic (or republican,) society. It takes public resources and removes them from democratic control, under the banner of some 19th Century vision of entrepreneurial capitalism.

Of course, we have the benefit of history to tell us what that style of capitalism leads to: 15 hour workdays, no weekends, sweatshop conditions, mere subsistence pay, occupational safety hazards, and the like. Union organizers fought tooth and nail for decent working conditions.

Most who look can see both how far we've slid back into these precise conditions, and how they represent not the cooperation of individuals under the law, but the subjugation of individuals to what working conditions employers dictate. This is an issue of no small concern, given that most people spend the better part of their waking hours for the better part of their lives working.
Obama does not meet all my criteria and the budget will need both revenue and cuts which require cooperation and concessions from both liberal and conservative. It does not mean give up our republic in order to form an imperfect business enterprise.
Comment: #2
Posted by: Steve
Wed Apr 11, 2012 9:45 AM
One more thing, I choked on Mr. Harsanyi claims "the wealthy did not create our debt-government did."
Is this columnist blind to the crushing global economic collapse brought about by the wealthy, consequences of which are all around us? ???
Such statements are so misguided, so blatantly false I can no longer respond to anything more from this author. These are my last comments and viewing of this columnist.

Comment: #3
Posted by: Steve
Wed Apr 11, 2012 10:01 AM
Re: Steve

I'm not sure when I last read such a collection of strawman arguments in one comment. I've been a conservative all my life, and I've never met a single person who wants a return to 19th century working conditions, slavery, or any of the other nonsense you and other far-left types always throw out there.

The problem is that in your view, the only alternative is the opposite end of the spectrum, where a benevolent government takes care of everyone's needs, and we're all made "equal" by force. We've seen how that movie ends. Go visit Pyongyang as see how well it works.
Comment: #4
Posted by: Jeff Gunn
Wed Apr 11, 2012 9:15 PM
It is Liberals who are the true regressives as every single one of their views failed around the world last century. No matter who is in charge, the bigger the government, the more corruption and incompetcy we see. I challenged Steve to show me one instance in history that contradicts that statement.
Comment: #5
Posted by: Thetruth
Fri Apr 13, 2012 8:17 PM
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