So President Obama is about to come out for another “millionaires tax,” one White House insiders are calling “the Buffett tax.” The sad thing is, even if he could get it, it would just be another jobs-killer.
With many economists worried that we’re heading toward a double-dip recession, our fearless leader is still playing politics.
The new tax would presumably go to pay for some of the government spending he still says will spur the economy, despite the evidence of his first three years in office.
Aspects of the new plan remain scant, but what we do know isn’t good. It’s supposed to be a tax on income, so instead of making the tax system less convoluted (as Obama’s own bipartisan deficit commission proposed), he’s looking to make it more complicated with a new tax bracket.
Thing is, taxing income won’t get squat from the president’s favorite limousine liberal, Warren Buffett — the guy who supposedly inspired Obama’s plan. Buffett doesn’t collect most of his money as the normal income that the tax would hit. (His salary is just $100,000 a year.)
Sure, Buffett has a strong record when it comes to picking winners in the stock market through his investment company, Berkshire Hathaway — although he’s also building a strong record in the area of economic hypocrisy lately.
He is, after all, the same guy who defended the feckless rating agencies over their disastrous mortgage-backed-securities ratings that did so much to lay the ground for the 2008 financial collapse. (He also held a major position in one of them.)
He recently defended the sleazy trading by one of his now former fund managers who purchased shares of a company just before Buffett agreed to buy the company for Berkshire — then recanted his support after regulators launched an inquiry into the deal.
Now, Buffett says millionaires like himself need to pay more taxes to pay for the president’s economic fixes.
OK, forget the hypocrisy that Buffett at 81 has already made his many billions so he couldn’t really care less how much he’s taxed. Forget, too, that since he makes most of his income through investments, this tax apparently won’t affect him or his Wall Street buddies much at all.
And forget that the plan appears to be nothing more than a class-warfare gimmick to bolster the president’s low approval ratings.
And that even a tax increase on millionaires has zero chance of passing the GOP-controlled Congress — because it couldn’t pass the old Democratic Congress.
The bigger issue is this: A “soak the rich” plan makes no sense in under current economic conditions. Soaking the only people left with disposable income to spend and keep working-class Americans working is one of the dumber things you can do at a time when you need the rich to spend more, not less.
In the real world, millionaires react the same way everyone else does when they have less disposable income: They cut back.
And “millionaires” often own the same small businesses that the president vows he wants to help to expand so they can hire more workers.
How does hitting small-businesses owners –whose profits often get taxed at personal-income rates — with even more taxes incentivize them to hire more workers?
Don’t expect Obama & Co. to supply the answer as they begin touting their “Buffett Tax” today.
Charles Gasparino is a Fox Business Network senior correspondent.