Thursday, April 17, 2008

Obama Acknowledges Supply-Side Economics

The Dems have now had nearly two dozen joint press conferences, AKA debates, during this election cycle. The Dodd's, Kucinich's, Biden's, Richardson's and a couple dozen other has-beens and never-wasses have gone away and it's down to the deadly duo. I have watched exactly none of these affairs. In the Internet age why would I? There must be a couple dozen folks that blog at The Corner watching, and I trust them to point me to anything interesting. There seldom is anything interesting, frankly.

But this morning Jonah Goldberg pointed out that Obama made an amazing comment when questioned about his promise to dramatically raise the tax rate on capital gains. According to Mr. Goldberg, BXO acknowledged the point embedded in ABC's question: revenues go up when the capital gains rate is cut. That, my dear reader(s), is supply-side economics. The Laffer Curve elegantly describes this effect that most liberals pooh-pooh. Or is that poo-poo? Either way, the D's ignore the facts, rely on static scoring, and say, "Raise taxes and you get more revenue, lower taxes and you get less." It's so very wrong, but it fits their demagoguery so they stick to it. But wait, Obama didn't actually leave the reservation and come over to the supply-side. Instead he said it didn't matter-- the cap gains tax needs to be doubled because it's FAIR. Fair? He advocates raising taxes on the millions of Americans who own stock, even though it decreases government revenue, because it's fair? Sheer lunacy. Could Jonah have misheard this amazing exchange? Doubtful, but I had to check further.

At the must-read American Thinker I found verification. Marc Sheppard has the goods on what Obama said in his article "The Inanity of Obamanomics."

BXO replied, "Well, Charlie, what I've said is that I would look at raising the capital gains tax for purposes of fairness. We saw an article today which showed that the top 50 hedge fund managers made $29 billion last year -- $29 billion for 50 individuals. And part of what has happened is that those who are able to work the stock market and amass huge fortunes on capital gains are paying a lower tax rate than their secretaries. That's not fair."

As I pointed out a few weeks back when Obama did his interview on CNBC and spouted this idiocy, he gets that whole "the secretary pays more" malarkey from multi-billionaire liberal Warren Buffett. It is, of course, a bald-faced lie. Unless Warren pays his secretary a wage that puts her in the highest tax bracket, he pays the federal government a higher rate on his wages than she does on hers. On capital gains they pay the same. We all do. Warren always peddles this whopper to the handmaiden media. Many of them probably know it's horse hockey, but young Senator Obama is so unknowing he falls for it every time.

Now here's the really sick part of this-- while Buffett can absorb a dramatic increase in the cap gains rate millions of others will go bust. (BTW, Buffett generally owns/ invests in old, legacy companies, not start-ups-- it is actually to his advantage to stymie new competitors to his businesses.) Among the poor, beaten-down, bitter survivors of Obama's tax increase drastic adjustments will be made: assistants will be fired so their pay can be sent off to Washington as tax money, purchases will be postponed, accounts will be closed, health care insurance payments will be eliminated, and in some cases we'll (er, I mean they'll) move our (er, I mean their) operations offshore.

Raising the capital gains tax 66-100% or so is just some exercise in an abstract area to Obama. Allow me to put it in terms his money-grubbing wife, Michelle, can understand. How about we raise the tax rate on book royalties 100% effective with the 2007 tax year. After all, is it fair that the Senator can make millions writing about his own life while tens of millions of Americans lead lives nobody will pay to read about? Get it now?