The Tale of the “Tapes”
We live in a redistributive society. Since the Sixteenth Amendment passed in 1913, the United States Internal Revenue Service has held that those making more income pay an increasingly higher level in federal income taxes. This is the definition of a progressive system.
This past week a tape of a young Barack Obama reinforced the president’s belief that those who earn more should be subject to increasingly punitive taxation to benefit those who don’t. This is not new ground for the president as nearly every stump speech includes taxing “millionaires and billionaires.” But what is different is the fact that this tape uses the term “redistribution.”
This has sent his political foes into “gotcha” moments and supporters scrambling to defend the president.
At the tail end of the 1998 Loyola University of Chicago speech, then Illinois Senator Obama criticized the inefficiencies of government and stressed that we need to find better ways to “pool resources” to better facilitate redistribution.
Left wing ideologues have written off this speech as either old news or taken out of context. It is neither. It is still Barack Obama speaking, using the same language that he uses today on the campaign trail.
In fact Mr. Obama remains steadfast in his defense of the idea by demanding adherence to the principle of giving everybody a fair shot. This is his way of defining social justice and redistribution. In his 1998 address Mr. Obama ends with “…how do we structure government systems that pool resources and hence facilitate some redistribution, because I actually believe in redistribution, at least at a certain level to make sure that everybody's got a shot.”
If fairness is what the president desires, we should look back at the initial income tax rates instituted by the federal government. They differ greatly from the rates that followed, including todays.
In 1913, there were seven different tax rates. The lowest margin of taxation was 1%. This was for those making between $0 and $453,292. This surely covered nearly everyone in the country in 1913. The remaining six tax brackets ranged from 2% to 7% set aside for near millionaires and millionaires.
The United States progressive income tax code is in its one-hundredth year of existence. It has become the monster that cannot be tamed. It is simply a way for unscrupulous politicians to reward constituents and donors with hidden tax breaks while relying on the top earners to cover for their misdeeds. Tax breaks to anyone or any institution simply grows the government by creating a never ending reliance on fiscal reciprocity.
More recently – over the last few decades – the tax base has gone from everyone paying some level of income tax to little more than 50%. Granted the nearly 50% that don’t pay federal income tax may include retirees on fixed incomes or those who are living on capital gains distributions, but largely they are those on the government dole.
Former Massachusetts Gov. Mitt Romney, who referenced these numbers during the primary season at a private fundraiser, has been hounded by the mainstream media as being uncaring to the less fortunate when in reality he is being attacked for telling the inconvenient truth.
More and more Americans are falling out of the taxpaying group and into the recipient group.
While the country is awaiting the certain elimination of the Bush era tax cuts if President Obama is re-elected, there are billions of dollars sitting idle as investors await the outcome of the election. They are hesitant to invest, knowing that if President Obama is re-elected taxes will go up and confidence in the economy will go down. Those who are looking to start or expand their business will be hit with increasing levels of punitive taxation.
Our economy can’t sustain another tax hike in the middle of the worst recession since the Great Depression. We can’t afford the “Spread the Wealth” philosophy espoused in the last presidential election.
No matter who ends up winning the presidential election on November 6, the country needs a common sense approach to taxation that creates wealth and doesn’t distribute it.