President Obama has an op-ed in USA Today:
Before we stop funding clean energy research, we should ask oil companies and corporate jet owners to give up the tax breaks that other companies don't get. Before we ask college students to pay more, we should ask hedge fund managers to stop paying taxes at a lower rate than their secretaries. Before we ask seniors to pay more for Medicare, we should ask people like me to give up tax breaks they don't need and never asked for.
The number of questionable assumptions packed into these three sentences is really something.
1. "Before we stop funding clean energy research." The assumption seems to be that the federal government is the only source of funding for clean energy research. In fact there is plenty of private money investing in clean energy research, and it may be deployed more wisely than the government money. Microsoft founder Bill Gates said the other day, "You could have the government throw money at the most politically favored guy in the country to go build a battery factory. And there are billions of dollars that have been assigned to that waste."
2. "we should ask oil companies and corporate jet owners to give up the tax breaks that other companies don't get." So we can give the money to clean energy companies for research subsidies that other companies don't get? Mr. Obama manages to violate his own principle that everyone should be treated the same in a matter of a single sentence. In fact, as former Senator Sununu has pointed out, two of the largest oil company tax breaks Mr. Obama has targeted, the manufacturers tax credit and the foreign tax credit, are available to other companies. In fact, Mr. Obama is not trying to fit oil companies and corporate jets into some newly flat, fair, just, or simplified tax code; he's singling them out for special punitive treatment that other, more politically popular companies, like "clean energy" don't get.
3. "Before we ask college students to pay more." It's not the federal government that's been asking college students to pay more; it's college administrations, which have been raising tuition and fees at astronomical rates to pay for everything from fancier student centers and dorms and shuttle-buses to diversity counselors and other non-faculty professional staff to lighter teaching loads and higher salaries for professors and university presidents. Maybe if the students and parents instead of taxpayers were bearing more of the cost, there'd be more resistance to the tuition and fee increases, and they'd slow down.
4. "we should ask hedge fund managers to stop paying taxes at a lower rate than their secretaries." The income tax rates are progressive, so it's highly unlikely that many hedge fund managers are paying lower income tax rates than their secretaries. The two other tax rates that apply are capital gains and payroll. The secretary probably pays the exact same rate, or, depending on her pay, an even lower one, on her capital gains as the hedge fund manager pays on his — and real estate, venture capital, and oil-and-gas partners pay on theirs. As for the payroll tax, the Social Security payroll tax applies to a limited wage base, as it has since the program began. It applies to the first $106,800 of the fund manager's income and of the secretary's income. As he did with oil companies and corporate jet owners, President Obama is singling out an unpopular minority group, in this case hedge fund managers, and, rather than trying to equalize their treatment, he's trying to penalize them by figuring out new ways to tax their capital gains at some new higher rate.
5. "Before we ask seniors to pay more for Medicare." The Medicare providers are similar in some ways to the college administrations — in fact, in the case of the big academic medical centers, they are one and the same. They keep jacking up the prices in part because they know the government will be there to take the burden for paying off the consumer. Meanwhile, the surgeons and hospital executives are all being well compensated with dollars that come to a large degree from taxpayers. President Obama's alternative, in this sentence, to the problem of runaway health care costs isn't squeezing the providers or using technology to deliver care more efficiently or cracking down on waste, it's rather "asking seniors to pay more."
6. "we should ask people like me to give up tax breaks they don't need and never asked for." Got that? Asking seniors to pay more for Medicare is bad, but asking "people like me to give up tax breaks they don't need and never asked for" is good. What if the "people like me" are seniors? It's okay to raise taxes of rich people, but it's not okay to ask rich seniors to pay more for Medicare? What's the logic to that distinction? Or is it just a partisan battle between Medicare means-testers like Paul Ryan and raise-taxes-on-the-richers like Barack Obama? Did Barack Obama ask for Medicare? If "asked for" is the test, one can make the case that more people asked for the tax cuts than asked for Medicare, because the tax cuts were more recent, and more current voters participated in the elections in which they were at issue than the one in which establishing Medicare was the issue. Or give the taxpayers and Medicare recipients themselves the chance to choose between Medicare and tax cuts, dollar for dollar.