[img_assist|nid=44797|title=3-2=6|desc=|link=none|align=left|width=140|height=175]The reviews are coming in on President Obama's response to Rep. Paul Ryan's mystical budget, and from the right, it's all bad. I heard an up-state guy calling in the other day to a Wisconsin Public Radio talk show, and his analysis was frighteningly typical of the bad math and reasoning used by wingnuts to justify their animus. His argument, which I paraphrase for brevity, came down to this:
Obama wants to tax rich people to reduce the deficit, but that only will bring in $800 billion over the next decade, which is only $80 billion a year, which may make people feel good but which is mere chump change that won't fix anything. After all, rich people only pay a fraction of all the income taxes paid in America, so they obviously can't contribute that much to help out.
Taking his cue from additional Republican talking points, the caller went on to say Obama should be cutting spending, overlooking the fact that many progresssives remain upset that the president has committed to cutting several dollars in spending for every dollar in new tax revenue he proposes.
Of course, the caller's not-atypical conservative "analysis" is wrong on many levels and in so many ways, even if you only consider the purely mathematical and logical perspective. For instance, notice how the guy compares ten years' worth of deficits to one year's worth of tax hikes and, based on that, says the hikes won't do any good. Oh, really?
As for the reason behind his comment that the wealthy pay such a paltry share of the nation's taxes and so "can't" help out? It's because their effective tax rates -- thanks to a slew of clever deductions, credits and write-offs, not to mention hidden income that isn't taxed at all -- are currently lower than rates on the middle class, which cannot make use of such dodges. Billionaire financier Warren Buffett has pointed out his secretary pays a higher proportion of her salary in taxes than do he and his rich buddies. [See chart below.] Even in the aggregate, the unadjusted tax rate on the wealthiest people in America, in terms of earned income, is only 35 percent, far below the rates they were assessed in the Eisenhower administration and well below rates they paid in the Clinton era, both very prosperous years in this country, but not as prosperous -- at least for the wealthy -- as we are seeing now.
So, yes, it's come to this: Conservatives say we simply can't raise taxes on the rich to help solve the deficit because they aren't taxed enough now to matter.
[img_assist|nid=44798|title=The trend|desc=|link=none|align=right|width=235|height=276]Meanwhile, it totally escapes the conservative mindset that cutting a trillion dollars of spending on social programs that aid low- and middle-income Americans, while giving rich people and corporations another trillion in tax cuts, is upward redistribution of wealth, not "balancing the budget." Indeed, Ryan's plan itself stipulates that deficits wouldn't disappear before 2030, and that's assuming preposterous (i.e., historically nonexistent) rates of job growth, and additional health care savings, after whacking Medicare and Medicaid, that remain unspecified.
The caller to WPR did get one thing right, although inadvertently. He argued that Obama's proposed tax hikes on the wealthy (which really are just an expiration of Bush-era tax cuts) would not resolve the deficit. Not by themselves, true, but only because while Obama in his speech this week referred to a trillion dollars of additional federal debt called for in Ryan's plan, the actual additional debt under that plan would, according to the nonpartisan Tax Policy Center, be $2.9 trillion.
The wingnut arguments against raising taxes on the wealthy may be steeped in bad math and illogic, but those arguments weak as they are remain the best they've got. They have an worldview, Obama challenges it, and they retreat to defensive positions in their ideological rigidty and the disinformation that arises out of their political opportunism. This conservative Maginot Line of fortifications against reality will eventually be overrun. The only issue is whether the US economy will be overrun beforehand.