Friday, February 03, 2012

Pres BO's problem is that "the do nothing Congress" includes a Senate Dem majority that does not want to vote for any of his proposals

What do all of these have in common?

Immigration reform?  The Dream Act?  "the jobs speech" and the latest "class warfare-ism" known as The Buffet tax?

The answer is that Pres BO got standing ovations from his party when he spoke to the Congress.  However, the proposals can't get out of Dem Senate controlled by his party.  

In all fairness to the Senate Dems, Pres BO has not followed his speeches with proposals.  He just gives speeches and more speeches!  It is difficult to "vote" on speeches. 

The Buffet tax proposal is another good example of something that sounds great but means very little.  Don't expect the Senate Dems to put this nonsense to a vote anytime soon.

The Buffet Tax is the "scam" that Mr Buffet pays a lower tax rate than his secretary.  As we mentioned in a previous post, this is "apples and oranges" because the secretary earns current wages and Mr Buffet is living off investments that were already taxed as wages before.

This is a scam, a fraud and everything synonymous with scam and fraud!  It sounds good to some people because it appeals to "class envy" and "economic ignorance", a couple of items that will make up the bulk of Pres Obama's reelection campaign.   In other words, this is not going to be a campaign about Pres BO's record.  It will be about scaring everyone that the Republicans are evil!

Professor Samuelson nailed it today when he shot down the Buffet Rule in  his weekly column:

"It’s also a myth that all the ultra-rich enjoy low tax rates. 

In 2007, the richest 1 percent of taxpayers paid an average tax rate of 29.5 percent and provided 28.1 percent of federal revenues, reports the CBO

On their wages and salaries, many of the ultra-rich pay the top income tax rate of 35 percent plus a Medicare tax of 1.45 percent. 

Who are these people? How did they get so rich? 

In a study, economists Jon Bakija, Bradley Heim and Adam Cole break down the top 1 percent as follows: executives in nonfinancial companies, 30 percent; doctors, 14 percent; professionals in finance (banks, hedge funds, pension funds), 13 percent; lawyers, 8 percent; computer experts and engineers, 4 percent; sales workers, 4 percent; sports, entertainment and media stars, 2 percent. The rest include farmers, management consultants, real estate developers and scientists. 

Most of these people probably got rich the old-fashioned way. 

They worked hard, started businesses (about one in eight is an entrepreneur or manager in a closely held company) or showed great talent."

Here is the bottom line:  The Senate Dems understand what Professor Samuelson is writing about.  They may give Pres BO standing ovations but know somewhere deep inside that they don't have the votes to pass these proposals.  They instinctively know that this is "raw class-warfare politics", or the kind of populist policies that divide the country but do not create jobs or wealth.

We repeat: Pres BO gets standing ovations but the Senate Dem majority does not seem interested in "voting up and down" on any of the items from the speech.  

I guess that's what happens to a president who is not serious about governing or tackling our huge problems.  He just likes to give speeches rather than governing!

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