hail ceasar obammus!

Here’s what Ceasar Obammus had to say about Warren Buffett in his campaign speech which was mislabeled as a State Of The Union Address.

"Right now, Warren Buffett pays a lower tax rate than his secretary … Tax reform should follow the Buffett rule: If you make more than $1 million a year, you should not pay less than 30 percent in taxes … Now, you can call this class warfare all you want. But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense."
Here we have a benefit flowing to Obama from our government education system. We have government educated voters in this country who couldn’t tell you the difference between a profit and a profit margin if their refundable tax credits depended on it. In fact, they don’t understand the difference between a standard tax credit and a refundable tax credit – but that’s another story.

Let’s be blunt (not difficult for me). The statement that “Warren Buffet pays a lower tax rate than his secretary” is an intentional, premeditated lie. This statement was aimed at government educated idiots predisposed by three years of Obama class warfare rhetoric to hate the wealthy. Here are two absolute and profound truths for you to digest: Warren Buffet pays EXACTLY the same tax rate as his secretary pays on the same taxable earned income. Warren Buffet’s secretary pays EXACTLY the same tax rate on her capital gains as does Warren Buffet. Look closely at Obama’s statement. He says that Buffet pays a lower TAX rate than his secretary, not a lower INCOME TAX rate. The point is that Buffet is paying an entirely different tax in Obama’s scenario. He’s paying capital gains taxes, she’s paying income taxes. The capital gains tax rate is fixed at 15% .. for both Buffet AND his secretary. The income tax rate ranges from 15% to 35%, and both Buffet and his secretary will pay the same rate on the same level of taxable earned income.

So now we have Obama saying that the rich – those with income of over one million a year –should pay no less than 30% in taxes. Here we have Obama calling for a 30% capital gains tax rate. This would be devastating for our economy. If you want to talk about chasing wealth overseas – a 30% capital gains tax rate would do it.

Then we have the Democrat’s "Buffett rule." Evil millionaires should not pay lower effective tax rates than middle-class people. That’s the theory anyway. The fact is that millionaires DO NOT pay a lower effective tax rate than the middle class. According to the Tax Foundation the average effective tax rate of American taxpayers is 11%. Millionaires pay about 25%. Yes .. Romney pays less. That would be because Romney has essentially been running for president for about seven years right now, and not working to earn an income. His income comes from investments, and that income is paid at the capital gains tax rate of 15%. The Democrats are sure to demonize Romney because he isn’t paying income taxes on capital gains income. Well –income tax rates are for earned income. Romney is paying exactly what he is SUPPOSED to pay, capital gains taxes. How does this compare to what others are paying? Romney is paying a higher effective tax rate than 97% of the American taxpayers.

Maybe I should spend a minute on “effective tax rates.” What’s that? The effective tax rate is the amount of tax an individual or firm pays when all other government tax offsets or payments are applied, divided by total income. Example: Your total income is $1,000,000. You have various tax deductions equaling $250,000. Part of your income is capital gains taxed at 15%, and part of your income is earned income taxed at 35%. Your total tax liability – capital gains taxes and income taxes -- is $180,000. Your effective tax rate is 24%.

Are these effective tax rates “fair”? I don’t know, why don’t you be the judge? Here’s a little fact to consider from the Cato Institute:

But the Congressional Budget Office shows that Buffett Rule is already in effect. The highest earners pay more than double the amount of taxes as a share of their income than middle income earners. The top 1 percent of earners currently pays 29.5 percent of their income in all federal taxes while middle income families pay 14.3 percent.

But that’s not all. Take a look at this and explain to me how Barack Obama can still claim that the rich aren’t paying their fair share:

Upper-income taxpayers have paid a growing share of the federal tax burden over the last 25 years.

A 2008 study by the Organization for Economic Cooperation and Development, for example, found that the highest-earning 10% of the U.S. population paid the largest share among 24 countries examined, even after adjusting for their relatively higher incomes. “Taxation is most progressively distributed in the United States,” the OECD study concluded.

Meanwhile, the percentage of U.S. households paying no federal income tax has been climbing, and reached 51% for 2009, according to a new analysis by the Joint Committee on Taxation.

Barack Obama is pushing this Buffett crap for one reason and one reason only: To pander to the mindless ignoramuses who don’t know any better and are driven by some primeval quest for revenge … Those rich people shouldn’t be able to keep all of that money that they probably got illegally or because they inherited it! I want the government to take it away from them and give it to me because I, as an entitlement-mooching American, by God deserve it.

Is Obama’s class warfare rhetoric working? There’s a recent study which shows that in 2009, when Obama took office, Americans thought that there was little or no class conflict between the rich and the poor. Now, in 2012, the polls show “strong to very strong” conflict between these two groups. So .. .the answer is a resounding YES. Three years of Obama class warfare rhetoric is having its desired effect.

At a time when people are vulnerable, they’ve lost jobs, they’ve lost houses, they are paying more for gas and for healthcare, it’s easy to get caught up in the idea of having the government plunder on your behalf. All you have to do is show up to the polls and vote for Democrats and your job is basically done. Too bad there comes a point where the producers can only handle so much plunder, their investments begin to dwindle, they hire less people, they retire early and all of the sudden, there are no more pockets to pillage. Then what?

Sim0n wrote:

Here’s what Ceasar Obammus had to say about Warren Buffett in his campaign speech which was mislabeled as a State Of The Union Address.

Caesar Obmmus? Interesting considering the entire basis of Christianity is founded on the premise that in his attempt to ensure that all the poor folks were properly taxed that Caesar ruled that all should travel to their place of birth to fulfill a census and thus be properly taxed therein. I am not entirely sure that your analogy fits since is it not the position of the Republicans and your statement within this post that President Obama only wants rich people to pay taxes and as such the Caesar comparison seems rather misplaced?

Regardless your position is only partially correct in that you indeed point out that Buffet's secretary does not incur a 15% tax rate for the majority of her earnings since she assumes an employment status of 'no risk' (mind you tell that to anyone who really works for a living that they face no risk in their day to day employment) while her employer via his investments realizes the 15% tax due to the potential risk. I can see that as a valid position except that as a whole it is not reflective of the abuses that Buffet was referencing and in turn the whole Private Capital context since it is what seems to be the current pivot point in the discussion.

Most importantly there is risk and then there is assigned tax risk and the two are not the same. I have made stock purchases on preferred offerings where in theory I was 'buying a stock' and thus facing a risk and yet that offering was guaranteed as part of a take over bid. Now granted the last one involved me purchasing $2.5 million worth of stock where the guarantee was only a realized $2.7 million but that is fairly good return for 8 days of COM. In fairness should that $200,000 be considered as 'risk' capital? The purveyor guaranteed both my investment and in fact the ROR so where was the risk? That is the inherent problem in that the tax system does not reflect the reality of the investments as in turn much of the time the so called 'risk takers' are not in fact taking any more risk than Buffet's secretary.

Let us consider one of the most obvious examples of this behaviour specifically Mitt Romney at Bain Capital. Now I have nothing against Private Equity/Capital firms as they are the catfish of the economy. They do what they do and to suggest that they are 'job creators' is the ramblings of someone who needs to re-learn grade 10 math. PE firms, especially Bain, are capital heavy so they essentially perform a hostile take over on companies that are not remotely dead nor for that manner in danger but rather are in decline. As a whole they companies have non liquid assets that far exceed their paper cost, (during the late 80's during the crash when Ford went down to $19 a share I bought as much as I could simply because if anyone was paying attention they would have realized that Ford's real estate holdings were valued at $30 (+/- 1.88) let alone the company itself), and this is what companies like Bain do. Now they also do some incredibly unethical stuff like "Black Knight stock buy backs" which in essence can only be described as 'pre-planned insider trading' but the US can hardly handle the system as it is let alone the premeditated illegal efforts, however as a whole they do not in fact assume much if any risk and that is the crux of this entire tax discussion.

Along the way we have allowed the Republicans to re modulate "Venture Capitalist" as "Private Equity Capitalists" and the two could not be further apart. The former is the basis of what made America great and the latter is what diminishes potential. Had companies like Bain realized the value of Apples real estate in the 1988-1992 period the world's current leader in terms of value would simply not exist. Capitalism at work?

However the most flagrant error in your position is that people like Romney and other tax evaders themselves are not taxed properly for they face no risk. Romney never invested 'his money' and yet he received a 15% tax rate for essentially being Bain's (Buffet's) secretary. At no point did he face a risk in terms of payment for his time at work since Bain was paid whether the investment went good or bad and in fact due to the structure of further bankrupting companies, (and thus making the general public and taxpayer pick up extra costs), he not only made money on failure but charged it to the public at large.

Now I can accept that possibly those who invested in Bain took upon a risk although that is rather debatable but people like Romney took no risk and yet enjoyed a tax rate for being a secretary while posing as a Buffet.

The US deficit will not be fixed by over taxing the rich but this absurd idea that this select group of companies and individuals who are currently hoarding $9 trillion in reserves needs to be 'further defended' so they will spend is a child wish.

And remember, as George Bush never learned, that an unfunded tax cut is merely a deferred tax for future generations.

C.