Obama Bamboozles Taxpayers

Here it is. Being stupid, or simply looking stupid. That's a core element of hoodwinkery.

Obama Tricks Voters as Enron Hoodwinked Public: Amity Shlaes

By Amity Shlaes - Sep 21, 2010


The debate concerning the top tax rate for wealthier Americans is so difficult in part because most people only pretend to know the actual figure.

Sure, we all know Republicans want to keep the top rate at its current level while Democrats prefer to let the George W. Bush-era rate cuts expire. And some of us may even know that the tax code’s current 35 percent figure would rise to 39.6 percent if President Barack Obama gets his way.

Beyond that, we get hazy. And no wonder: other sections of the tax code combine with the statutory rate in mysterious ways, creating a different effective top marginal rate. These include, for example, phaseouts known as Pease and PEP, under which itemized deductions and personal exemptions fade. If you really want to capture the top taxpayer’s situation, you have to add state taxes into the mix. So what’s the exact top rate? Nobody knows. Or, maybe, nobody wants to know.

I asked the biggest, baddest tax mind I know, former Congressional Budget Office director Douglas Holtz-Eakin, to tell what he thinks the top tax is. Even Holtz-Eakin approximated, texting back a formula that might serve as the theme song for tax year 2011: “39.6 + 2 (phaseout of pep and pease) + 3.8 (Medicare net investment income tax) = 45.4. Add in state-level taxes and 50 is easy to reach.”

Holtz-Eakin is a genius. If he’s approximating, it’s because he can’t bear to feel the pain of the precise reality.

Illusion of Fairness

So how did we get here? Politicians love progressive rate structures. First, they appear to be fair. We’ve all heard President Obama invoking fairness in defense of the 39.6 rate he seeks. A second, greater advantage of progressive rates is their complexity. The staircase concept of rates rising on successive income tranches is hard enough. Add in all the traps and breaks and taxpayers become truly confused and give up protesting.

What’s at work here is the same phenomenon that caused otherwise sentient members of Enron’s audit committee to go along with executives Andrew Fastow and Jeff Skilling: fear of looking stupid. Given a choice between seeming like dummies or paying more money than they think they should, people often choose the latter.

For the first quarter century or so of its existence, lawmakers didn’t dare impose the income tax on the average earner. Only when World War II broke out did this class tax become a mass tax. And then two extra tricks were necessary for the transition. First, many taxpayers were hardly in a position to resist a shift in the code since they were already government captives: draftees. Second, withholding was introduced. Soldiers never knew how much they were taxed because part of their income never even made it into their pockets.

Selling the Structure

After the war, the feds found new ways to justify and complicate our tax system. They marketed progressivity as a necessity for the nation’s general welfare. The very name itself helped. Many people don’t want to oppose political progressives, so they go along with the idea of a progressive tax structure. Even those who reject progressive politics may not want to be caught opposing something that sounds like progress. The progressivity brand was so successful that government was able to keep the top rate at more than 70 percent for decades.

But did postwar Americans really endorse, or even understand, that progressive principle? This was less clear. Two skeptics were Harry Kalven and Walter Blum of the University of Chicago. They set out to make the case for progressivity but found the argument so weak they titled their 1953 book “The Uneasy Case for Progressive Taxation.”

Taxing Experiment

In the 1990s, scholars designed an experiment to see whether people understood the difference between progressive structures, under which rates go up as people earn more, and proportional ones, under which higher earners pay taxes at the same rate as lower earners.

Michael Roberts, Cassie Bradley and Peggy Hite asked college students abstract questions: “Are progressive tax rates more or less fair than flat tax rates?” By a margin of almost 4 to 1, students said they preferred a progressive rate system for society. Next the researchers gave the same students concrete examples of a paired set of two earners with different salaries and possible tax bills for those earners, asking which tax amount the earners should pay. By a margin of 4 to 1, the same students picked tax amounts for the higher earner that corresponded to a flat rate, or even a regressive, system. Remarkably, these subjects were accounting students who had already studied these various systems.

The point isn’t that taxpayers are stupid. Rather, they are stupefied and conflicted. On a gut level, they may not necessarily agree with the basic principle of modern taxation. “Overall, our results indicate the existence of a norm for proportionality…” concluded Roberts, Bradley and Hite. Lawmakers may want to drag the country into a new higher tax era. But they shouldn’t console themselves that there’s consensus for such a change, when there may not be.

Joe Biden declares Obama Victory in Iraq

It has been observed that when politicians sense the crowd is moving in a certain direction, they rush to the front of the stampede and then claim they are leading the charge. So it seems to be with the latest on Iraq. We are winning. The Iraqis are winning. They are embracing democracy and capitalism. They are embracing heretofore unknown freedom. In other words, it appears the goals of the Bush Administration are in sight. That development, as astonishing as it has been for Democrats, has spurred Biden to credit Obama for the history-making success.

Biden's Diversion Strategy Joe's 'gaffes' have a political logic.

It's easy to pile on Joe Biden. Vice presidents, after all, acquire reputations in Washington they never really shake. Dick Cheney was Darth Vader, and now Joe Biden is the embarrassing uncle you try to keep away from the microphone.

Neither is entirely fair. Still, when Mr. Biden claims success for a victory won by a surge he and Barack Obama opposed, you wonder what he's up to. When this same genius is then dispatched to counter Mr. Cheney on the weekend talk shows, you wonder what the administration is up to.

Start with Mr. Biden's first whopper: telling CNN's Larry King last week that "one of the great achievements of this administration" may well be a democratic Iraq. "You're going to see a stable government in Iraq that is actually moving toward a representative government. . . . I've been impressed how they have been deciding to use the political process rather than guns to settle their differences."

Now, many have jumped on Mr. Biden for claiming this as an Obama achievement. Perhaps more striking, however, is that the same Iraqi government that so impresses him today is something he once declared impossible.

That was back during a Democratic presidential debate in 2007, when Mr. Biden told ABC's George Stephanopoulos it was a "fundamental strategic mistake" to believe "there is any possibility in the lifetime of anyone here of having the Iraqis get together, have a unity government in Baghdad that pulls the country together. That will not happen, George."

Now it has not only happened, but it has happened, like all good things in our world, because of Barack Obama.

On substance, it's a line of argument that is hard to make. It's even harder when your attorney general and your national security adviser are out there admitting major policy goofs. And it's harder still when you send a Biden to do a Cheney's job.

That's what happened this weekend, when the White House deployed the sitting vice president to the talk-show circuit after learning that the former vice president would be appearing on ABC's "This Week." In many ways, it was a rerun of a clash back in May, when the White House hastily added a security-and-values speech in an effort to pre-empt a speech Mr. Cheney was delivering the same day.

My former colleagues in the Bush administration cannot understand why any White House would allow a former vice president to define the debate. One explanation is Mr. Cheney's low approval ratings, which may lead the president's advisers to conclude that they can use him as a foil. The danger is that such matchups by their nature diminish a White House while elevating the challenger.

In this case, the debate also plays to Mr. Cheney's strength.

Americans might not buy everything he says. But Mr. Cheney has a clear and consistent view about how to deal with men who want to kill us. Of late, events have helped make the Obama view a little less coherent.

Look at how Mr. Biden danced around the questions about a civilian trial for Khalid Sheikh Mohammed, the admitted mastermind of the 9/11 attacks. On "Meet the Press" and "Face the Nation," Mr. Biden said the president would soon make a decision on what to do—never mind that in November Americans had been led to believe we had a decision when Attorney General Eric Holder announced that KSM and four other operatives would be "brought to New York to answer for their alleged crimes in a courthouse just blocks from where the twin towers once stood."

Plainly, Mr. Biden's interlocutors did not find his answers persuasive. They were, however, probably the best the vice president could do at a time when the administration is publicly walking back Mr. Holder's decision. In an interview in yesterday's New York Times, Mr. Holder set up the U-turn: "I think that I make the final call," he said, "but if the president is not happy with that final call, he has the ability to reverse it."

Ditto for Mr. Biden's efforts to reassure Americans about the handling of Umar Farouk Abdulmutallab, the Nigerian caught trying to blow up a Northwest flight. Again, he was playing a weak hand.

The same day Mr. Biden's interviews appeared, National Security Adviser James Jones told "Fox News Sunday" the president had not been well served by the Abdulmutallab case, admitting that the High-Value Detainee Interrogation Group should have been operational. He promised to "learn from our experiences."

So go ahead and chuckle over Mr. Biden's "gaffes," if you think he was on television to win an argument. But if you think his assignment was to use a Sunday-show duel to deflect attention from the Obama administration's two big backtrackings on terror, you might want to give Joe a little more credit.

Obama -- Even Muslim Nuts have Nuke Rights

Obama, speaking of democracy, is quoted as saying "there is a danger when the United States, or any country, thinks that we can simply impose these values on another country with a different history and a different culture."

Someone needs to remind him that we imposed -- in the most violent and punitive way -- on Japan and Germany with stunning success.

Meanwhile, in his usual conciliatory and appeasing manner, he said Iran has as much time as it wants before admitting it wants nuclear power for bombs rather than electricity production.

How about this: We send inspectors to Iran today to see for ourselves? Is there any reason to believe the Iranian leadership when Ahmadinejad has already threatened to destroy Israel with the nuclear weapons he says Iran is not planning to build?

Based on the following article, Obama is becoming a great ally to muslim terrorists


Obama says Iran's energy concerns legitimate

Tuesday, June 2, 2009 9:24 AM

LONDON -- President Barack Obama suggested that Iran may have some right to nuclear energy _ provided it proves by the end of the year that its aspirations are peaceful.

In a BBC interview broadcast Tuesday, he also restated plans to pursue direct diplomacy with Tehran to encourage it set aside any ambitions for nuclear weapons it might harbor.

Iran has insisted its nuclear program is aimed at generating electricity. But the U.S. and other Western governments accuse Tehran of seeking atomic weapons.

"What I do believe is that Iran has legitimate energy concerns, legitimate aspirations," Obama said, adding that the international community also "has a very real interest" in preventing a nuclear arms race.

The president has indicated a willingness to seek deeper international sanctions against Tehran if it does not respond positively to U.S. attempts to open negotiations on its nuclear program. Obama has said Tehran has until the end of the year to show it wants to engage with Washington.

"Although I don't want to put artificial time tables on that process, we do want to make sure that, by the end of this year, we've actually seen a serious process move forward. And I think that we can measure whether or not the Iranians are serious," Obama said.

Obama's interview offered a preview of a speech he is to deliver in Egypt this week, saying he hoped the address would warm relations between Americans and Muslims abroad.

"What we want to do is open a dialogue," Obama told the BBC. "You know, there are misapprehensions about the West, on the part of the Muslim world. And, obviously, there are some big misapprehensions about the Muslim world when it comes to those of us in the West."

Obama leaves in the evening on a trip to Egypt and Saudi Arabia aimed at reaching out to the world's 1.5 billion Muslims. He is due to make his speech in Cairo on Thursday.

Obama sounded an optimistic note about making progress toward resolving the Israeli-Palestinian conflict, although he offered no new ideas for how he might try to secure a freeze on new building of Israeli settlements. The United States has called for a freeze, but Israeli leaders have rejected that.

Asked what he would say during his visit about human rights abuses, including the detention of political prisoners in Egypt, Obama indicated no stern lecture would be forthcoming.

He said he hoped to deliver the message that democratic values are principles that "they can embrace and affirm."

Obama added that there is a danger "when the United States, or any country, thinks that we can simply impose these values on another country with a different history and a different culture."