April 19 2013
Billionaire investor Warren Buffett has his secretary—and Barack Obama has…me. Like countless other U.S. taxpayers, I was interested but not at all surprised to learn, when I paid my annual visit to Mr. Block, that my effective tax rate for 2012 was higher than Mr. Obama’s enviable effective rate of 18 percent. I wonder if Mr. Buffett’s secretary—who, as the president never tires of reminding us, pays at a higher rate than her mogul boss—can recommend a good support group?
Honestly, I didn’t expect President Fair Share to kick in more than his legal requirement. You’d probably have to be even more enamored of big government than President Obama to randomly send insatiable Uncle Sam more than the federal government is “asking” from you.
But the irony is delicious—the guy who travels the land demanding higher taxes for others is paying a lower rate than I, a salaried employee at a nonprofit and sometime freelance writer, am paying. When Mitt Romney’s 2011 tax returns—he paid an effective rate of 14 percent—were released in 2012, the Obama campaign went into overdrive with moral indignation. So those four percentage points separating the high-minded president and his money grubbing challenger gave Mr. Obama moral preening rights?
If so, then a lot of us are entitled to moral preening rights. We have every right to ridicule Mr. Obama, who has no concept of what onerous taxes mean for average folks, and who, adding insult to injury, gobbles up our earnings to spend in ways we believe are harmful to the country. Note to other Average Folks: Don’t believe him when he says he’s only going to raise taxes on “the rich.”
If you tell me what you think about taxes, I can probably tell you all sorts of things about your values. Do you think a poor kid is more likely to benefit from the Head Start program or Sunday school? How you feel about taxes is the dividing line today in the United States.
Most journalists are fans of big government and taxes, so it was not surprising that the Washington Post’s Wonkblog on April 15 featured a little piece on how Americans really don’t mind our current level of taxation. “Your taxes are going towards insurance and defense, not ‘waste and fraud,’” Wonkblog informed us.
Okay, so who’s paying for the waste and fraud? Somebody had to write the checks for Vice President Joe Biden’s $585,000 Paris hotel bill last February. (Couldn’t he have stayed at the embassy?) But what the Wonkblog means is that what we spend on waste and fraud, ever how large, is a drop in the bucket when you think about the “good” side of what we buy:
The truth is that the federal government, as seen through the budget, is a massive insurance conglomerate with a large standing army. Social Security, Medicare and Medicaid make up almost half of federal spending. Defense is a bit less than as fifth. That’s not to say we’re spending the right amount on those programs. It’s just to sat your money isn’t going to “waste and fraud,” or to a bloated foreign aid budget. It’s going to big, visible and broadly popular programs. That’s why deficit reduction is so hard.
My insurance conglomerate with a large standing army, ‘tis of thee I sing? If you share my political perspective, this is a reason to feel unhappy about the taxes you paid this week. Not exactly what the Founders had in mind when they risked “evil report and loss of fortune” to create this great nation either. And I’m willing to bet that those “popular” programs are chock-a-block with waste, fraud, and abuse.
Wonkblog goes on to make a claim that most of us judge that we pay the right amount of taxes. This is a based on polling data. But I want to know how many of the happy “taxpayers” who actually pay no federal income taxes were included in this polling sample. Nearly half the people in the U.S. don’t pay federal income taxes. It makes a difference on the happiness scale.
Frankly, it’s a kick in the gut to have to send in as much money as I am required to do. I don’t want to give you TMI (too much information), but let’s just say that I am a renter and my bill for Mr. Block to compute my tax bill was more than a third of a month’s rent. A flat tax would save me this expense. And then there is the paperwork for companies: I write two book reviews for a publication, for example, and, at the end of the year, it must mail me a tax document.
Of course, I also don’t expect President Obama to understand any of this. His annual salary is $400,000 a year, with such nice perks as a rather nice house near his office and a lavish pension plan (it comes to about $200,000 a year), with office expenses and a library paid for by us the rest of his life. He doesn’t have to worry about saving for the future—we’ve provided for him, and he’d be fine, even without book and speaking fees. Raise your hand if you think the Obamas will fly commercial when they leave office.
Let’s face it: The president talks a good game, but he is like a lot of rich men: he has no idea what we’re up against. So that’s why I am baking cookies for my support group. “Hi, I’m Charlotte, and I paid a higher effective tax rate than Barack Obama.”