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Liars figure as the 2012 campaign begins

April 18, 2011
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The old saw, figures don’t lie but liars figure, proves true again. As Obama begins his campaign with a predictable onslaught against the rich, the Associate Press releases an article to support him. It has the provocative headline, Super rich see federal taxes drop dramatically. Then actually read the article.

The average income on those [top 400 taxpayer] returns in 2007, the latest year for IRS data, was nearly $345 million. Their average federal income tax rate was 17 percent, down from 26 percent in 1992.

A couple of things to note here. First, the writer confuses the reader with the tax table rate (26 percent) with the actual after-deductions and exclusions tax rate (17 percent). That difference between the advertised rate and final rate is true for all taxpayers. The really pernicious thing, however, is not that there are lots of incentives and exemptions built into the system, but that those incentives influence behavior–as they’re meant to do. The mortgage deduction, for example, encourages people to buy bigger houses than they could otherwise afford. We saw what a disaster that turned out to be. By the way: when politicians and government officials like them, they’re “incentives;” when they don’t, they’re “loopholes.”

Second, notice the writer goes all the way back to 1992 to make his comparison. Why is something almost 20 years old “news?” It is not: it is analysis–or would be, if it weren’t simply pushing a point of view. The point of view is that people aren’t paying enough in taxes.

There are so many breaks that 45 percent of U.S. households will pay no federal income tax for 2010, according to estimates by the Tax Policy Center, a Washington think tank.

I agree in part with this: every citizen who benefits from government and who votes ought to pay something. Voting, owning property, and paying taxes were all intertwined in the original Constitution. No more. The result is the open space fiasco in Boulder last fall, where non-taxpaying students from CU voted to burden taxpayers to buy open space.

The Republicans are for tax simplification, he reports:

House Republicans want to eliminate breaks to pay for lower overall rates, reducing the top tax rate from 35 percent to 25 percent.

I fully agree with that position because it will make filing easier, reduce errors and fraud, remove economic incentives, and increase freedom. Actually, I’d like to see a flat tax of 14%. Notice the subtle point of view: “to pay for.” All your money is the government’s and if they give you a break, somebody has to pay for it. Obama has a better idea:

…Obama said last week he wants to do away with tax breaks to lower the rates and to reduce government borrowing.

That’s a very interesting sentence. Does it mean, as it seems to, that “he wants to do away with tax breaks in order to lower the rates” or is it simply “to do away with tax breaks.” Unfortunately, it is the latter. Here’s the clue, in the concluding sentence:

In all, the tax code is filled with a total of $1.1 trillion in credits, deductions and exemptions, an average of about $8,000 per taxpayer….

And here’s the agenda: Americans are underpaying the government by $1.1 trillion. You, my friend, need to pay Big Brother an average of $8,000 more per person, $16,000 per couple per year. Obama and the left truly believe that we don’t have a spending problem, we have a revenue problem. If you don’t believe that, look at how Ritter and the Democrats “closed loopholes” with the Dirty Dozen bills last year.

That’s the agenda, that’s what Obama is running on in 2012. In short, “We’ve given you this wonderful healthcare entitlement and you’re not doing enough to pay for it.”

If the American people buy into that, we are indeed fools and deserve to become tax slaves.

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