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hfojvt's Journal
Posted by hfojvt in General Discussion
Fri Dec 17th 2010, 06:52 PM
About three weeks ago, President Obama announced a two year freeze in the pay of Federal Workers. When he did so, he said

"The hard truth is that getting this deficit under control is going to require some broad sacrifice," Obama said. "And that sacrifice must be shared by the employees of the federal government."

http://money.cnn.com/2010/11/29/news/econo...


As some may remember here, I supported Obama on this. First, because Federal workers make more than other workers. Second, because many Federal Workers will still get automatic step increases. Third, and most importantly, this made for a good frame to insist on sacrifices from rich people in the form of higher taxes. Obama could have said it again "getting this deficit under control is going to require some broad sacrifices."

Republicans, of course, insist that the rich should never ever have to sacrifice anything, so they fought to keep taxes from going up on rich people. Instead of fighting them, Obama worked out a deal that bore a strange resemblance to an unconditional surrender. Then he started promoting his 'deal'.

One of the things given up in his deal was the estate tax. I think Obama and Democrats were already giving up lots of ground on the estate tax, but here's the dollar figures for what was sacrificed.

"KLEIN: So how much does this cost? With a $1 million exemption and a 55 percent rate—in other words, what will happen if we do nothing—the estate tax would raise about $700 billion over the next 10 years. The Lincoln-Kyl version would raise less than $300 billion. And the compromise most Democrats have coalesced around—which was the 2009 level, with a $3.5 million exemption and a 45 percent rate—would've brought in a bit less than $400 billion." via the Daily Howler http://www.dailyhowler.com/dh121610.shtml

That looks like $40 billion a year. So Obama asks working people, albeit highly paid working people, to sacrifice to reduce the deficit, and that saves $30 billion over 5 years. Then a few weeks later, he works out a tax deal to keep people with million dollar estates from having to pay more taxes on them. And that costs $200 billion over 5 years.

Workers sacrifice = $30 billion
millionaires non-sacrifice = $200 billion

"getting this deficit under control is going to require some broad sacrifice"

Yet Obama has now ensured that dead rich people will not be asked to sacrifice. Nor will people getting millions of dollars that they have not worked for. Instead that sacrifice will be made by much poorer people who are working for their money.

Then, not only does Obama not fight against the upper class, he seemingly has the nerve to lie to us about it.

By now, we have all seen this chart.

http://www.whitehouse.gov/issues/taxes/fra...

A chart that not only hides the portion of the payroll tax holiday that goes to people in the top 5%, but also seems to understate the cost of the estate tax cuts. Klein says $80 billion for two years and the White House says $23 billion? Which one is wrong?

My bet is that they are both right, but that one is being dishonest. Because Obama and Democrats were ALREADY willing to give up $57 billion in estate taxes, the deal only adds $23 billion to the total. So the Obama Whitehouse chose to sweep $57 billion under the rug, in order to convince the uninformed that his deal was better than it really is.

That is speculation on my part, but I would note that the difference between the $400 billion and $300 billion in Klein's quote is approximately $20 billion over two years.

I still think the country would be better off if we had a President who fought for the bottom 95% and who was honest with us, even if that meant that all the tax cuts would expire.

Yes, this is all water under the damn, but I still think he deserves to get called on it.
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