Obama's "Buffet Rule" farce - it wouldn't pay for ONE DAY of the deficits Obama has been running!

WASHINGTON – Here we go again.

At the beginning of his presidency, Barack Obama argued that the
country’s spiraling debt was largely the result of exploding
health care costs. That was true. He then said the cure for these
exploding costs would be his health care reform. That was not true.

It was obvious at the time that it could never be true. If
government gives health insurance to 33 million uninsured, that
costs. Costs a lot. There’s no free lunch.

Now we know. The Congressional Budget Office’s latest estimate
is that Obamacare will add $1.76 trillion in federal expenditures
through 2022. And, as one of the Medicare trustees has just made
clear, if you don’t double count the $575 billion set aside for
the Medicare trust fund, Obamacare adds to the already crushing
national debt.

Three years later, we are back to smoke and mirrors. This time
it’s not health care but the Buffett Rule, which would impose a
minimum 30 percent effective tax rate on millionaires. Here is how
Obama introduced it last September:

“Warren Buffett’s secretary shouldn’t pay a (higher) tax
rate than Warren Buffett. ... And that basic principle of fairness,
if applied to our tax code, could raise enough money” to
“stabilize our debt and deficits for the next decade. ... This is
not politics; this is math.”

OK. Let’s do the math. The Joint Committee on Taxation
estimates this new tax would yield between $4 billion and $5 billion
a year. If we collect the Buffett tax for the next 250 years –
a span longer than the life of this republic – it would not cover
the Obama deficit for 2011 alone.

As an approach to our mountain of debt, the Buffett Rule is a
farce. And yet Obama repeated the ridiculous claim again this week.
“It will help us close our deficit.” Does he really think we’re
that stupid?

Hence the fallback: The Buffett Rule is a first step in tax
reform. On the contrary. It’s a substitute for tax reform, an
evasion of tax reform. In three years, Obama hasn’t touched tax
(or, for that matter, entitlement) reform, and clearly has no
intention to. The Buffett Rule is nothing but a form of
redistributionism that has vanishingly little to do with debt
reduction and everything to do with re-election.

As such, it’s clever. It deftly channels the sentiment
underlying Occupy Wall Street (original version, before its
slovenly, whiny, aggressive weirdness made it politically toxic). It
perfectly pits the 99 percent against the 1 percent. Indeed, it is
OWS translated into legislation, something the actual occupiers
never had the wit to come up with.

Clever politics, but in terms of economics, it’s worse than
useless. It’s counterproductive. The reason Buffett and Mitt
Romney pay roughly 15 percent in taxes is that their income is
principally capital gains. The Buffett Rule is, in fact, a disguised
tax hike on capital gains. But Obama prefers to present it as just
an alternative minimum tax because 50 years of economic history show
that raising the capital gains tax backfires: It reduces federal
revenues, while lowering the tax raises revenues.

No matter. Obama had famously said in 2008 that even if that’s
the case, he’d still raise the capital gains tax – for the sake
of fairness.

For Obama, fairness is the supreme social value. And fairness is
what he is running on – although he is not prepared to come clean
on its price. Or even acknowledge that there is a price. Instead,
Obama throws in a free economic lunch for all. “This is not just
about fairness,” he insisted on Wednesday. “This is also about
growth.”

Growth? The United States has the highest corporate tax rate in
the industrialized world. Now, in the middle of a historically weak
recovery, Obama wants to raise our capital gains tax to the
fourth-highest. No better way to discourage investment – and the
jobs and growth that come with it.

Three years ago, Obama promised universal health care that saves
money. Today, he offers a capital gains tax hike that spurs economic
growth. This is free-lunch egalitarianism.

The Buffett Rule redistributes deck chairs on the Titanic,
ostensibly to make more available for those in steerage. Nice idea,
but the iceberg cometh. The enterprise is an exercise in
misdirection – a distraction not just from Obama’s dismal record
on growth and unemployment but, more importantly, from his
dereliction of duty in failing to this day to address the utterly
predictable and devastating debt crisis ahead.