Unble once again to put a spotlight on any successful policy of his administration, President Obama today took to the negative. Rather than argue how his programs have helped all Americans the president took on the mantra of class envy to promote punitive legislation against the successful. I refer, of course, to his April 14 radio address and the eurosocialistic Buffett Rule.
The Buffett Rule (“BFR”), as you may recall, is the idea that if your income is $2 million or more then your tax rate should be at least 30% regardless, evidently, of what the law requires. There are twists and turns to this, as there are with all rules, but that’s the sum and substance of it.
The gravamen of the president’s argument is that the ‘rich” need to pay “their fair share”. I guess he forgets that the top 1% pay around 38% of all federal tax revenues and the top 5% account for 58% or so of the federal take. Facts and demagogy, however, don’t have mix very well.
The president and his comrades in the US Senate no longer recognize the origins or source of such income. If, for example, I am in top management of a major or successful company and I receive an annual salary of $2 million, then I am taxed at whatever the effective rate is for ordinary income. If, on the other hand, I have worked hard all my life and invested my after tax income (that is, money I’ve already paid a tax on) such that I sell off those investments from time to time at a profit, then that profit would be taxed at whatever the effective tax rate is on capital gains. (Keep in mind, I’ve already paid taxes on the money I invested, so I’m really being taxed twice.)
And that is what I counted on in making those investments, a lower tax rate. But as one can see, even at a lower rate, the 1% pay far more than their “fair share” in federal tax revenues.
The liberals would have you now pay taxes on your income as you earned it (fair enough), again should you profitably sell any investment purchased with that after tax income (a second time tax, arguable not fair) and yet again if your income crosses a certain threshold but your tax bill isn’t high enough (clearly not fair). This is clearly a punishment, a “taking” of property if you will, without due process.
What the BFR does is (1) specifically identify the people from whom property will be taken (those meeting a certain income threshold); (2) impose a punishment (excessive taxation thus requiring them to forfeit property to the state in excess of what is required); and (3) ignores the legal distinctions between types of income and the applicable rate thus denying, arguably, due process to the tax payer.
A classic definition of a Bill of Attainder. Something you don’t discuss much on a daily basis.
Under English law, bills of attainder were used somewhat ruthlessly when the Crown wanted someone out of his/her way. It usually involved a property reversion to the Crown or the Crown’s designee. They were, very generally speaking, laws that were passed specifically naming people and accusing them of wrongdoing. Conviction by legislation. No trial needed. And they were used against the colonists as well.
The Framers of the Constitution were so concerned about this device that bills of attainder were expressly forbidden in Article I, Section 9, Paragraph 3 of the Constitution. So strong was their fear that they also specifically forbade any state from passing such bills, one of the very few restrictions imposed on the states in the unamended Constitution.
Yet this is not the first time this has been tried by this administration and its Senate henchmen. The attempt to confiscate 90% of the money paid out as bonuses to AIG execs was considered by many as a bill of attainder even though the legislation failed to pass. Their crime was being bailed out by the US Treasury. Yet here we again, same song, different verse.
One cannot help but conclude that this administration has no respect at all for the Constitution of the United States. Or at least no basic understanding. Here’s a president (and a Senate) proclaiming that there is no precedent for the Supreme Court to overturn federal legislation. Tell that to Chief Justice John Marshall of Marbury v. Madison fame. Or insisting that there’s a constitutional basis for requiring private citizens to purchase a private commodity (health insurance).
Even with the BFR, they’re going about it unconstitutionally since they are attempting to introduce and pass a tax revenue measure in the US Senate when the Constitution is unequivocally clear that tax revenue measures must originate in the House of Representatives.
But here’s Comrade Reid rushing it to the Senate floor with no hearings or committee vote. He didn’t do it on his own; it had to orchestrated with the White House for no other purpose but to demagogue the issue and incite class envy and class warfare. They should all be ashamed of themselves for debasing the Constitution and the legislative process.
F.A.Hayek argued in The Constitution of Liberty that effective and respectable law ought to be general in nature, understandable, known and certain, and applied equally to all. The BFR is not general in nature, it is an aberration from the known and certain law, and it cannot be equally applied since it seeks to change the existing equally applied tax rules to apply them unequally.
If the real issue is tax code reform, then let’s reform the tax code. Gosh knows it needs it. But let’s not demagogue the issue to create class envy and warfare and divide our people.
Obama continues to debase and cheapen the majesty of the office he holds.
And he should be ashamed.