creators.com opinion web
Liberal Opinion Conservative Opinion
Lawrence Kudlow
Lawrence Kudlow
12 Apr 2014
Yellen's Low-flation Nonsense

Will somebody please explain to me how rising inflation is somehow going to extricate us from the tepid … Read More.

5 Apr 2014
Charles Koch Fights Back

Is it too farfetched to connect the dots between a brilliant Wall Street Journal op-ed by Charles Koch, the … Read More.

2 Apr 2014
Thank You

Let me just take a moment and say a few words of thanks and gratitude and humility. To all the viewers and … Read More.

Obama's Misleading Reagan Reference

Comment

In President Obama's latest class-war, tax-the-rich gambit, he has stooped to a new low with misleading and out-of-context quotes from Ronald Reagan. Apparently, the president is now trying to use the Gipper for cover while he attacks Mitt Romney with the so-called Buffett Rule.

In an address this past week, Obama cited a couple of Reagan speeches from June 1985, in which the former president quoted a letter from a wealthy executive who grumbled that he paid less in taxes than secretaries or bus drivers.

Obviously, Obama was trying to draw a parallel with Warren Buffett's complaint that his tax rate is lower than his secretary's, and to the resulting Buffett Rule, a proposed 30 percent minimum tax on millionaires. With a tongue-in-cheek flourish, Obama referred to Reagan as "that wild-eyed, socialist, tax-hiking class warrior."

Of course, Obama doesn't tell you that Reagan had a completely different tax-reform vision.

And reality. Rather than raising the capital-gains tax on successful investors or punishing wealthy people — which are Obama's priorities — Reagan wanted full-bore pro-growth tax reform that would slash rates for everyone, simplify the tax system with only two brackets and eliminate tax shelters that allowed people to avoid paying any taxes at all.

Obama's duplicity in misquoting Reagan was chronicled nicely by Glenn Kessler of The Washington Post. Kessler pointed out that Reagan said: "We want to cut taxes, not opportunity. ... By lowering everyone's tax rates all the way up the income scale, each of us will have a greater incentive to climb higher, to excel, to help America grow."

This is Reagan the supply-sider emphasizing economic-growth incentives. The Gipper had nothing to do with punishing rich people or jacking up the capital-gains tax, which is probably the most important investor-class tax on risk and entrepreneurship. The cap-gains tax is certainly the most important stock market tax, with dividends taxes (which Obama also would raise) a close second.

Reagan, who lowered the cap-gains tax from 28 percent to 20 percent in his first term, actually wanted to lower it to 17.5 percent in his second term. The way the story ended, the final tax bill had two brackets of 15 percent and 28 percent, with substantial base-broadening and loophole-closing. Indeed, by slashing the top income-tax rate from 70 percent all the way to 28 percent, Reagan launched a huge prosperity boom that basically spanned three decades.

As we know, Obama has a totally different vision.

The president's budget would lift the top income and investment tax rates to about 45 percent. Meanwhile, the integrated corporate and capital-gains tax would be 55 percent.

Instead of rewarding success, Obama punishes it. Instead of economic growth, he talks about tax fairness, which is a euphemism for redistributing resources from private hands to the government sector — the exact opposite of Reagan.

By the way, we already have an alternative minimum tax. And the IRS shows that the wealthy pay roughly twice the effective tax rate of those in the middle class.

And while Obama talks about cutting the deficit, the Joint Tax Committee says the Buffett Rule would produce about $5 billion a year, for maybe $47 billion over 10 years. Compare that to $45 trillion in spending over that period.

But wait, Uncle Sam might not get a dime from Obama's millionaire's tax. History shows that a higher capital-gains tax reduces revenues from slower growth, countless evasions and a non-realization of gains. The only budget surplus in my lifetime occurred in the late 1990s. It followed a Clinton-Gingrich cap-gains tax cut, which produced a flood of revenues from growth and wealth-creation.

But in truth, this whole millionaire's tax is a political ploy. And it's aimed at Mitt Romney and his business success. That's why the White House wants Romney to release tax returns going back to the 1970s. And that's why Vice President Joe Biden is on the campaign trail talking about the "Romney Rule," which he says means, "Let's double-down on tax cuts for the wealthy."

In fact, Romney has proposed a Reagan-like 20 percent tax cut for all taxpayers. And Rep. Paul Ryan, one of Obama's favorite targets, has proposed a Reagan-like tax reform that would simplify rates to 10 and 25 percent while removing numerous loopholes and tax shelters.

These are pro-growth visions. Obama's is an anti-growth vision.

Just this past week, New Jersey Gov. Chris Christie said Obama's divisiveness is demoralizing to the economy and the country. And former General Electric CEO Jack Welch told me in an interview that Obama has taken a "divide-and-conquer approach, amassing a list of enemies that would make Richard Nixon proud."

Ronald Reagan's optimistic rising-tide-lifts-all-boats message was the direct opposite. For Obama to attempt to associate himself with Reagan is a demagogic falsehood of the worst kind.

To find out more about Lawrence Kudlow and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate web page at www.creators.com.

COPYRIGHT 2012 CREATORS.COM



Comments

3 Comments | Post Comment
What I don't understand is who does the President think he is fooling. No one can actually believe that Obama is anything but the very thing Reagan was looking to stop. Reagan's famous speech about how liberals would start trying to take over control of the economy starting with health care. Reagan warned us of Obama. I just don't believe he is fooling anyone but his believers.
CM
Comment: #1
Posted by: C Moellers
Fri Apr 13, 2012 3:41 PM
Re: C Moellers;... Sir... If the economy were a raging river you would expect the government to dam it and bridge it, if, it helped to protect your crops and property generally and life...The problem is quite simple, really... If the economy has the power to hurt people, and to devistate their lives, and make them poor, and throw them on the government dole at the expense of everyone, or leave them dizzy and deprived in the street, then intelligence suggests that the only proper course is for government to protect the weak from the strong if it will not end up weak, and unable to defend itself from enemies domestic and foreign...The state and federal governments have certainly provided a comfortable setting for business to operate in... It has not taxed them and it has levied its support from the very people who benefit least from government... It is the government that is left to pick up the pieces of a destroyed economy, and economy that has cut itself to the quick it the desire to parry from the people the last extreme of profit... Capitalism has been on life support off and on during the greater part of the last century and most of this one so far...Business wants government to support it when it has brought itself to the point of destruction, but when it is doing well it resists even legitmate taxation, and all government control... I ask you...Is there a better term for capitalism than economic anarchy??? I promise you that we will not escape this depression before another is upon us...They cycles of high profit and glut are as close as two lovers in the cups... What is said of socialism is clearly true of capitalism: That it is good in theory but bad in practice... In theory, capitalism should support the government that defends it, and the population of the country that practices it... What happens in fact, is that our society is supporting the economy and feeding it profit out of our taxes, and our government, unable to tax dying capital taxes the middle class into extinction...The fact is, that primitive humanity who were all socialist without alternative survived by the self control of society over their economy... What choice did they have??? There was little technology, and little wealth to divide people... To survive alone they had to survive together... Each man was his neighbor's defense... Social justice was essential and expected... WE think we can live without these thing... WE trust in the principal that one man's profit is the good of a whole society, and not without some evidence since capitalism has raised the general level of technology... But simply look at the number, and that number is greater than most people are aware, of the civilizations that have raised themselves from primitive condition only to be run over by people more primitive still...When social justice died, civilizations were doomed...When governments ceased being democratic and became republican, when the rich rather than the poor began to control their economy, then social division doomed their societies...We still have some relics of socialism, and you would not be able to exist without them...It is not the relics of socialism that are dooming this society, but the principal that what is good for the rich is good for all... The economy needs to be governed by the people if the people will not be governed and governed badly by the economy... Thanks...Sweeney
Comment: #2
Posted by: James A, Sweeney
Sun Apr 15, 2012 8:27 AM
Mr. Sweeney. The economy does not have the power to make people poor or to throw anyone on the government dole. Capitalism has lifted the standard of living for everyone on the planet. You speak elloquently of socialism but I'm not sure if your post has anything to do with Mr. Kudlow's post.

Comment: #3
Posted by: david
Fri Apr 20, 2012 10:34 AM
Already have an account? Log in.
New Account  
Your Name:
Your E-mail:
Your Password:
Confirm Your Password:

Please allow a few minutes for your comment to be posted.

Enter the numbers to the right:  
Creators.com comments policy
More
Lawrence Kudlow
Apr. `14
Su Mo Tu We Th Fr Sa
30 31 1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 1 2 3
About the author About the author
Write the author Write the author
Printer friendly format Printer friendly format
Email to friend Email to friend
View by Month
Authorís Podcast
Ray Hanania
Ray HananiaUpdated 24 Apr 2014
Froma Harrop
Froma HarropUpdated 24 Apr 2014
R. Emmett Tyrrell
R. Emmett Tyrrell Jr.Updated 24 Apr 2014

16 Feb 2013 Obama's No-Growth State of the Union

24 Dec 2009 The Yield Curve Is Signaling Bigger Growth

11 Sep 2010 Bashing Bush and Boehner Won't Work