Since 2008 Obama has pursued a class warfare agenda, narrowing his focus over time from the Top 5% to the Top 2% to the Top 1%. This year Obama has narrowed his focus even further, singling out those millionaires and billionaires who pay a lower tax rate than their secretaries.
To the extent there is any truth to Obama’s “bosses versus secretaries” class warfare theme, it rests on the distinction between those who pay ordinary income tax rates on wages and other income, and those who pay the long term capital gains tax rate on investment income, which now stands at 15%. (Note, Obama’s claim is disputed.)
Warren Buffett and the so-called Patriotic Millionaires have joined in this crusade to eliminate the secretary gap, practically begging for higher taxes. It dovetails nicely with Obama’s campaign 2012 theme of the bosses versus the secretaries.
So who are we likely to nominate, at least if the National Review gets its way? The person for whom the Obama campaign theme was tailor made, a candidate who not only is tremendously wealthy based on investment banking, but whose income almost certainly comes entirely from investments and is taxed at the lower capital gains rate.
Romney’s stated refusal to release his tax returns highlights the problem, as this Business Insider columnist puts it:
Romney’s campaign team has clearly decided that the political risk of releasing the returns outweighs the potential problems of not doing so. No one knows for sure what the documents would say, but by the candidate’s own admission, the bulk of Romney’s retirement income from Bain has been from capital gains, which are subject to 15% tax rate.
That means that for the past 10 years, Romney has likely been paying a lower tax rate than most middle class voters. If this is the case, that information could be devastating to Romney’s presidential bid.
The recognition of Obama’s campaign theme may be why Romney tailored his proposed reduction in capital gains taxes to exclude those making over $250,000 per year, to the chagrin of many conservatives. Think how it would have looked if the candidate who lives at the capital gains rate proposed a cut which would accrue hugely to his benefit.
Nonetheless, even at the current rate, Romney benefits more so than anyone else in the race, and far more so than Obama.
Is Romney’s living off his investments and paying the lower capital gains rate justifiable on the merits? Absolutely. There are very good reasons why we have a lower rate for investment income; we want to encourage investment and capital formation.
But let’s talk pure electability, not what’s fair or right. The conservative media has spent the last month obsessing over Newt’s real and imagined electability problems and trying to turn Newt into a martian cartoon caricature, yet Romney’s electability problem is ignored.
If I were a Democrat and I expected to run against Mitt Romney, I would have designed precisely the “bosses versus secretaries” theme being pursued by the Obama campaign.
I guess you could say I don’t believe in coincidences. And we’re not even talking about it.
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Comments
Thank you, Professor, for finding the precise reason that Romney is going to lose the 2012 election. He was the one they were waiting for. All the Mitt cheerleaders and “go along with the Party nominee” crowd have managed to put us right back into 2008, minus Sarah Palin as VP nominee.
There won’t be any more Alaskan governors riding to the RNC’s rescue.
Romney will lose thanks to being exactly the nominee Obama could defeat, plus the MSM complicity, plus the Left’s various dirty tricks.
Now that the handwriting is on the wall, can’t we see the futility of putting energy into the Presidential race and concentrate on the many other races we actually have a chance of affecting?
I’m not ready to advocate executing operation counterweight just yet. I wouldn’t say that the handwriting is on the wall (but the finger IS floating there, ready to make its mark). There’s still time for Romney to crash and burn, and for one of the more Conservative candidates to rise or re-rise to the top. Let’s see what happens in the first few primary states yet before we fully jump to conclusions.
That being said, we ALREADY should be putting some effort into electing Conservatives to positions, recruiting for the next local and state-wide races.
Why do I feel like I’m watching a movie called “The Great Divider,” with music by “The Patriotic Top 1% Platters,” starring Mike Nifong as President Obama, Crystal Mangum as the Secretary, and the Duke Lacrosse Team as the Boss?
LukeHandCool (whose son is at lacrosse practice right now … evil little social-climbing snob)
Not sticking up for Romney at all, but at least his organization has modicum of competence to get on the frigging ballots.
Someone should ask Mitt for his college records. Then when he complies, ask Barry O for his. The problem with the Republicans is they are always playing defence. That’s why Newt gets in front a lot. Barry O has as much baggage as Newt, it’s just that noone brings it up. Where do you think they found those women who attacked Cain? Chicago. Follow the money to Chicago and start digging up the bodies.
Obama’s a Ho Ho Ho for the Alinsky way. The average million plus income pays 29% … the average “middle class” pays 15% or less. And middle class can earn their money on capital gains too, if they want to risk their capital. Obama’s Alinsky response to fact is to deny deny deny … repeat the lie lie lie.
And if capital is invested in a corporation, the corporation pays tax, then the capital owner gets to pay another 15% IF he has a profit. But the corporation is really just the same investor under a different tax status.
IF the capital owner has a loss on his investment that was spent providing jobs, he can (potentially) claim a loss, but government doesn’t give his money back (unless he is a bundler for Obama).
The “dirty” capitalist’s money is used to pay (taxed) workers … and only if he takes risk wisely does his venture return a profit. I suppose Obama thinks big government should get half of the profits of ALL investment. But if you add the various taxes that are extracted from a business … employee, fica, corporate, real estate, capital gains, etc. … I’d think it is already at 50%.
But Romney and Buffet style “trader/raider capitalists” are not exactly in the boss/secretary category. And it is the crony capitalist and crony socialist that is the real problem. But risking capital to build a company is the American Way … which FLOTUS was never proud of.
The “bosses v secretaries” theme is pretty smart. For Obama, women are the key. He has to win the white women vote to win the election because white males just won’t support him.
For whatever reason, women tend to vote on more emotional grounds. Women who work for male bosses may love this theme.
Anyone who was dumb enough to vote for Obama in the first place is certainly susceptible to more nonsense.
Here are some facts I wish at least the conservative punditry would make available, instead of using Progressive language:
1. Capital gains and compounding and ROI are the principle method by which the rich get richer. Assets are all important in life. And distinguishing them from expenses like cars, and boats is key; if you want to get rich, INVEST AND SAVE. It is the number one reason to alter SS; IT DOES DEPRIVES THE POOR OF AN ASSET. Especially that they can give to their children.
2. Changing the Cap gains rate will still not make Buffet’s income tax rate equal his secretary. Because he will still not pay FICA. So back to number 1 again. And if you are going to raise Cap gains rates, forget the billionaire outliers, because what you are doing is depriving the middle class of the number 1 way to get rich. You are punishing investment, which you already deprive the poor of altogether by taking 12-16% of his wages in a pyramid scheme. It makes no difference that SS is progressively taxed. IT MAKES NO NEST EGG!
3 If you want to increase taxes on a few hundred billionaires, tax their assets. DO NOT SCREW WITH CAPITAL GAINS. But be very careful with who you catch in the that net. As example, a millionaire is mathematically closer to a guy making $10,000 a year than he is to a billionaire. So even that language by the Progressives is misleading and stupid. A millionaire is just not that rich, especially when most of them are running a business out of that $1 million.
There is at least one argument to be made that Conservatives could take the class warfare talk off the table by making a billionaire tax of assets. Then ridicule it as childish and silly because it does not even poke a small hole in the deficit. You could confiscate ALL the billionaires money every year and it wouldn’t matter.
Mitt Romney…VAT Tax???
http://biggovernment.com/dmitchell/2011/12/24/since-romney-is-willing-to-consider-a-vat-should-libertarians-and-conservatives-be-willing-to-consider-him/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+BigGovernment+%28Big+Government%29
Now that you mention it, during this election campaign at a time of fiscal crisis, we are hearing little or nothing from the media and either party about a VAT.
How “odd”.
Is it just me, or is appealing to “secretaries” just a bit archaic? I work in a 400-person multi-national software company and there is not one person who performs the duties of an administrative assistant. We have project managers, operations managers, analysts, office managers (ie, facilities managers), billing managers, etc that all perform some support roles, but they support a whole department and are somewhat specialized. The status is higher too, which is probably why 75% of them are men. Outside of law firms and the executive floor of huge corporations the concept of a personal secretary is just something in books and movies to most people under 40. Obama could switch to the old reliable “factory owner vs factory worker” theme (now updated to the less catchy “CEO vs average employee”) but that hasn’t worked since Truman and is impersonal and hard to identify with. Maybe “Start-up option millionaire vs Starbucks barrista”? Modern and relatable, but doesn’t reek of class warfare – too easily translated to “kid who recently moved out of his parents’ basement thanks to mad computer skillz vs aspiring actress who’s just doing this while she gets auditions”. I think Obama 2012 needs to keep searching for that elusive slogan.