Obama is all politics all the time
He doesn’t really care about the economy. He cares about winning.
Closing tax loopholes for the wealthy gets us just about the SAME amount as raising taxes.
the Tax Policy Center report that capping all itemized deductions at $50,000 a year for each tax filer under current policy would yield $749 billion in extra revenue from 2013-2022.
Reducing the annual deduction cap to $25,000 would raise an additional $1.286 trillion over 10 years. Lower the cap still further to $17,000, as Mitt Romney once suggested during the campaign, and the revenue increase soars to $1.747 trillion by 2022. Our preference is that Republicans hold out to use this revenue to finance a reduction in tax rates as part of a larger tax reform, but similar math applies in any case.
Under this plan, the rich would be paying a higher tax rate.
The Joint Tax Committee’s budget score of Mr. Obama’s proposal to raise taxes on capital gains, dividends, and income above $200,000 while reinstating the PEP and Pease deduction phase-outs yields merely $823 billion over 10 years.
That’s barely more than the $749 billion from capping deductions at $50,000 a year. And at an annual average of $82 billion a year in revenue, it’s merely 7.5% of last year’s $1.1 trillion federal budget deficit.
So why one and not the other? Because Obama wants to be able to tell his progressive friends he raised taxes on the rich. Because he knows that for the Republicans to accept higher tax rates would mean a major revolt by their supports. So when they refuse, Obama will blame the Republicans when we go over the cliff.
By taking an absolutist line, he’s basically gambling that Republicans will be more reasonable than he is and will blink. But if they don’t blink and we go over the cliff, from his point of view so what? Mr. Obama then has an excuse to blame Republicans if there’s another recession. Meanwhile, he pockets the higher tax rates that take effect on January 1 anyway, and he can then negotiate a budget deal next year without having to make any tax concessions.
How does the market feel about this? It’s been tanking since Obama was re-elected , and fell 185 points after his remarks yesterday.
What is most galling about all of this is that Obama is lying about his “balanced” approach to the budget. Read and memorize. Meat:
But once you begin to dig into the numbers, the plan doesn’t look balanced at all. As the bipartisan Committee for a Responsible Federal Budget noted back then:
“The Administration claims that the plan would save about $4.4 trillion in total (including interest savings, war savings, and the costs of the jobs proposals). However … counting the war savings is counting a policy that is already in place and is thus a gimmick to be avoided. Taking out the war savings and savings from the discretionary cuts in the Budget Control Act leads to total savings of less than $2 trillion.”
Of the supposed savings, then, $1.6 trillion comes from tax hikes and $577 billion comes from spending cuts, not counting saved interest. So 73% of the savings comes from taxes, 27% from spending cuts. That’s $3 of tax hikes for every $1 of spending cuts.
But all this current bullshit is simply more of the same that we’ve seen for the last four years. Obama’s Persuasion Army ran a permanent campaign during his first term. It was a “wall-to-wall” propaganda, absent ideas.
It was conventional wisdom in September and October that other than subsidies for student loans, infrastructure and alternative-energy jobs, Barack Obama was running a largely idea-free campaign, with the press and voters left to guess at a second-term agenda.
For the Obama campaign, the future was irrelevant. What mattered was the “product” of the president’s first term. It’s clear why Barack Obama was willing to turn former Wall Street Democrats and contributors like J.P. Morgan CEO Jamie Dimon into furious critics of the president with his seemingly compulsive scapegoating of bankers, millionaires and “the wealthiest.” Or why at the last minute of the 2011 deficit negotiations he demanded a tax increase that wrecked any possible deal and would have blown up the GOP. Once past ObamaCare, the president spent his first term creating these wedge issues and wedge people for his re-election.
And what Obama is doing now is more of the same. Propaganda with an aim “to win.”
I’m not sure.