On Monday, the President made his case for extending the Bush-era tax policies for those making less than $250,000 per year. This policy position, which has been made by countless politicians and pundits over the last decade, was greeted with cheers and huzzahs by the left, and treated as though it is a new proposal that would save the country. One example of this is an editorial from the New York Times, which stretched the imagination when it came to rhetoric regarding the importance of the President’s proposal.
The editorial didn’t waste any time, stating the below in its first paragraph:
Citing well-documented facts, he pointed out that tax cuts at the top have failed to promote economic growth and have blown a hole in the federal budget.
A link in the editorial guides readers to the President’s speech, which shows where the Times is getting its laughable claim that the tax cuts for the wealthy “have blown a hole in the federal budget.” Here are a few brief snippets from the speech:
And what happened?…And in just a few years, we went from record surpluses under Bill Clinton to record deficits that we are now still struggling to pay off today.
…We need policies that grow and strengthen the middle class — policies that help create jobs, that make education and training more affordable, that encourage businesses to start up and create jobs right here in the United States.
So that’s why I believe it’s time to let the tax cuts for the wealthiest Americans — folks like myself — to expire. (Applause.) And, by the way, I might feel differently — because it’s not like I like to pay taxes — (laughter) — I might feel differently if we were still in surplus. But we’ve got this huge deficit, and everybody agrees that we need to do something about these deficits and these debts. So the money we’re spending on these tax cuts for the wealthy is a major driver of our deficit, a major contributor to our deficit, costing us a trillion dollars over the next decade.
Just these three paragraphs provide enough ammunition for a dozen blog posts, but in short:
- The tax cuts for the top two percent of taxpayers (those making over $250,000) prevented the federal government from receiving $850 billion in taxes over ten years. (Note: Liberals used to claim it was $700 billion, but the Joint Committee on Taxation has upped that estimate in the last six months or so.] That’s $85 billion a year for budgets that went from $1.7 trillion in 2001 to $3.8 trillion today. Not accounting for inflation, that’s more than a 200% growth in the budget – and the President wants to claim $85 billion per year, or about 2.5% of this year’s budget, was a major factor in that?
- The President fails to mention two things he has in the past when it comes to our national debt: that the policies of President Bush included over one trillion in new war and Medicare spending. In addition to TARP, support for policies that caused the housing bubble – which has devastated federal revenues for several years – and No Child Left Behind, Bush’s spending policies have caused far more damage to our fiscal situation than any of his tax policies benefiting upper-income earners. President Obama’s policies, of course, have made things even worse.
- The President’s language indicates he believes money earned in America belongs to the government first and its earner second. This is typical of the left’s thinking on taxes, but a dangerous line of thought for a free society.
- If Obama really wants job creation and lower costs for college students, as well as greater tax revenue, perhaps he would consider getting out of the way of energy resource utilization in this country and eliminating some burdensome regulations while also slashing government subsidies for college students. Millions of new jobs over a few years would be very helpful for both the many unemployed Americans as well as increasing government tax revenues via an expanded economic pie. Additionally, having college students graduate with less debt would help them get on their financial feet more quickly.
Moving on, the NY Times next tries a bit of fear-mongering:
Extending the tax cuts to those earning $1 million a year would cost the government $366 billion in lost revenue over 10 years, compared with extending the tax cuts only to those making less than $250,000 a year. That amount would have to be made up by cutting federal spending in critical areas like Medicare, Medicaid, education and food safety.
First and foremost, again, taxes belong to their legal earner. Let’s not let the Times get away with pretending otherwise. Second, ideologically speaking, education funding from the federal government is not a “critical area.” In fact, it should all be eliminated ASAP. Third, mathematically speaking, the above list ignores the hundreds of billions in fraud/waste/abuse/duplication in the federal government that better oversight could cut. It ignores areas where the defense budget could be trimmed. Social Security reform could be on the table, and elimination of a few tens of billions in federal subsidies to farmers and energy companies would be a welcome policy change.
But no – the Times focuses on scaring readers into thinking that without raising taxes on upper earners kids, grandparents and the poor will be facing economic devastation. Never mind that without reforming Medicare, Social Security and other social spending the nation will likely be in significant financial straits in the next two decades regardless of how many taxes are raised.
Finally, the editorial closes with a rhetorical flourish:
The strength of Mr. Obama’s argument is unlikely to sway Republicans. But he’s right on fairness and the facts, and will, we hope, prevail in this debate.
When it comes to talking about tax fairness, nobody has better speechwriters than the President or a better parrot of those speechwriters than the Times. When it comes to facts, Right Wing News’ John Hawkins has the best one-liner of them all. From his Twitter account the other day:
The people who aren’t paying any income tax at all right now are using gov’t services. Is 0 in income tax their “fair share” of the taxes?
John is exactly right, as I wrote recently:
While almost all Americans do pay some sort of federal taxes – from taxes on cigarettes to payroll taxes – John’s point is an excellent one: the 50% or so of taxpayers who don’t pay non-payroll income taxes benefit from federally-funded roads, education services, immigration control, the military and other federal services. Who, then, pays for these services? According to the Tax Foundation in an October 2011 report, “The top 5 percent earned 31.7 percent of the nation’s adjusted gross income, but paid approximately 58.7 percent of federal individual income taxes.” In short, most taxes for non-retirement social spending – the same social spending liberals are so keen on expanding – are being paid by those people liberals also say don’t pay enough in taxes – the top five percent, whose income was a relatively modest $154,643,000 in 2009, according to the Tax Foundation.
In June, the New York Times wrote an editorial about the debate over spending cuts and tax increases current law states will be enacted on January 1, 2013. I praised that editorial for its intellectual honesty. This latest editorial, unfortunately, goes back to the liberal tradition of being long on rhetoric and short on facts. This does a significant disservice to its readers. Let’s hope conservatives can make the case for real, lasting tax reform and much-needed spending cuts as we go into the final stretch of the 2012 election season, and overcome mere rhetoric with the power of the truth.