We’re four days from the automatic kick-in of a series of tax increases and spending cuts that our overly dramatic media and political culture have insisted on calling “the fiscal cliff”, the most ominous sounding approach to New Year’s since Y2K. Whether a deal between the White House and House Republicans can be reached now, or whether it happens sometime in January, most political observers believe it will happen. And at that point, President Obama is going to have come to grips with what he surely already knows, and it’s that his rhetoric about dealing with the deficit—and his financing his ambitious agenda—solely by asking millionaires to pay “a little bit more”, as his campaign ads soothingly promised, was always hollow to the core.
Martin Sullivan, the chief analyst at the non-partisan Tax Analysts points out where the real money is, and it’s through employer-financed health insurance, the most way most Americans get their coverage. Health insurance benefits are not counted as part of an employee’s income, and thereby exceed other popular deductions, such as mortgage interest and charitable giving.
You will note that the biggest beneficiary of all these deductions are the middle-class and upper middle-class. Yes, a wealthy person can write them off too—but the biggest financial break is seen by the vast middle class expanse of American life that would be strapped if their health insurance benefits had to be counted as taxable income or their mortgage-interest taken away. And the poor would be hit hardest of all if charitable giving decreased as a result of a closing of that particular tax deduction.
Whenever you attempt to say that taxing the rich is ineffectual, the Left shoots out the word “trickle-down economics”, a phrase they use in such a knee-jerk fashion that I doubt they’ve ever given it much thought. It falls in the same category with conservatives who talk about the top income tax rate going to 39 percent as marking the advent of national socialism.
Asking the rich to pay “their fair share” sounds real nice on the campaign trail, especially when you never define the terms “rich” and “fair share”.Everyone thinks they’re paying their fair share and very few people think of themselves as rich, so you can get away with saying something, because no one thinks you’re actually talking about them.
The closest we’ve gotten to an actual definition was that rich is $250,000 and 39 percent is a fair share. And now the numbers tell us that gets us nowhere where we need to be—and keep in mind that Obama’s definition of “where we need to be” revenue-wise is much higher, given his promises for increased spending on education, job training, etc.
It’s time for the president of the United States to step up to the plate and act like a leader, in the same way Speaker Boehner did when he risked his position as head of his own party with his own efforts to get a deal. Obama should either come up with a real plan to finance his proposals and reduce the deficit or just find some way of admitting that it was all a con to get re-elected. This whole taxing the rich a little bit more might have made some people feel good, but it adds up to next to nothing.