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Déjà vu all over again: Obama to ask for tax hikes in SOTU

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It’s worth remembering what candidate Obama said about the impact of cap gains taxes in 2008.

There you go again.

In what comes as a shock to only non-sentient Americans, President Obama is reportedly set to announce his desire to “stick it” to those evil 1%’ers in tomorrow’s State of the Union address.

Who would’ve guessed?

According to Fox News, the President plans to offer the following package of “reforms” to the Byzantine US tax code:

The president's address -- his first to a Republican-led Congress -- will call for $320 billion in tax increases over 10 years. Aside from funding new tax credits including a tax credit for working families and expanding the child care tax credit, the White House says that money would go to funding measures to make college more affordable and accessible, including the president’s recently announced plan to make community college free for many students.   

The centerpiece of the president's tax proposal is an increase in the capital gains and dividends rate on couples making more than $500,000 per year to 28 percent, the same level as under President Ronald Reagan. The top capital gains rate has already been raised from 15 percent to 23.8 percent during Obama's presidency.

So once again, the President is resorting to the “soak the rich” strategy to fund new spending – this when the country is still running half a trillion dollar deficits and the national debt has ballooned to over $18 trillion in the past six years. 

Gosh, that’s a fresh new growth-oriented approach.

Now, I have no objections to the tax credits he’s proposing.  Credits for working families and child care make some sense, and might very well help the middle class.  However, the idea of hiking capital gains taxes (again) is just mind-numbingly ridiculous. 

But don’t take my word for it.  Here’s what I wrote back in 2011 about candidate Obama’s recognition that raising capital gains taxes isn’t actually about raising revenue, but about “fairness:”

No, what’s more important in our eyes is the President’s consuming and consistent obsession with “getting” the rich through higher, arguably punitive, taxation. It has been a theme of both candidate Obama and President Obama from day one, and it very well might be the single most non-negotiable element of his worldview. 

This obsession is a staple of his rhetoric, and his politics. Perhaps the most telling bit of language from our President was uttered when was still candidate Obama, during a 2008 debate:

ABC’s CHARLIE GIBSON: All right. You have, however, said you would favor an increase in the capital gains tax. As a matter of fact, you said on CNBC, and I quote, “I certainly would not go above what existed under Bill Clinton,” which was 28 percent. It’s now 15 percent. That’s almost a doubling, if you went to 28 percent. But actually, Bill Clinton, in 1997, signed legislation that dropped the capital gains tax to 20

OBAMA: Right.

GIBSON: And George Bush has taken it down to 15 percent.

OBAMA: Right.

GIBSON: And in each instance, when the rate dropped, revenues from the tax increased; the government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down. So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?

OBAMA: Well, Charlie, what I’ve said is that I would look at raising the capital gains tax for purposes of fairness. 

You really have to let that one sink in for a bit. (I’ve been thinking about it since it was uttered, and I still can’t get my mind around it.) It might be the most illuminating comment Barack Obama has ever given voice to - at least publicly, since the infamous “bitter clinger” comment was made in a private setting. What does it say about Obama’s worldview that he candidly admits that he would punish the investment activity that leads to economic growth and job creation, while correspondingly reducing tax revenues available for government programs, in order to promote “fairness” – a notion that appears to consist entirely of sticking it to the “fat cats” via higher tax rates?

Call me crazy, but I always thought the purpose of taxation was to raise sufficient revenues for the provision of government services. When did it become a tool to punish a select group of American citizens – a group that has done nothing wrong other than be successful (and employ lots of folks)? 

It really can’t be any clearer.  Obviously, President Obama remains stuck in a class-warrior, reality-be-damned mindset that values some arbitrary notion of “fairness” – itself a dubious concept - above actual fiscal and economic reality. 

The good news is that the GOP-led Congress will have none of it.  It’s just depressing that after all this time, the President doesn’t seem to have learned anything.  It’s clear he never will.

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Angus DuBois
Angus DuBois
Angus DuBois is the nom de plume of an entrepreneur of 20 years who, in cowardly fashion, prefers to keep his/her business identity a secret. Comments can be forwarded to angus@nexxuspublishing.com.

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