Buffett Tax, Health Care Are Examples Of Clever Politics From The Right

At the beginning of his presidency, Barack Obama argued that the country's spiraling debt was largely the result of exploding health- care costs. That was true. He then said the cure would be his healthcare reform. That was not true. If government gives health insurance to 33 million uninsured, that costs. Costs a lot. Now we know. The Congressional Budget Of-fice's latest estimate is that Obamacare will add $1.76 trillion in federal expenditures through 2022.

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Three years later, we are back to smoke and mirrors. This time it's the Buffett Rule, which would impose a minimum 30 percent effective tax rate on millionaires. Here is how Obama introduced it last September

"Warren Buffett's secretary shouldn't pay a [higher] tax rate than Warren Buffett.. And that basic principle of fairness, if applied to our tax code, could raise enough money" to "stabilize our debt and deficits for the next decade.. This is not politics; this is math."

Let's do the math. The Joint Committee on Taxation estimates this new tax would yield between $4 billion and $5 billion a year. If we collect the Buffett tax for the next 250 years, it would not cover the Obama deficit for 2011 alone.

The Buffett Rule is a farce. And yet Obama repeated the ridiculous claim again. "It will help us close our deficit." Does he really think we're that stupid?

The Buffett Rule is a substitute for tax reform, an evasion of tax reform. In three years, Obama hasn't touched tax reform, and has no intention to. The Buffett Rule is nothing but a form of redistributionism that has little to do with debt reduction.

As such, it's clever. It deftly channels the sentiment underlying Occupy Wall Street. It perfectly pits the 99 percent against the 1 percent.

Clever politics, but it's worse than useless. It's counterproductive. The reason Buffett and Mitt Romney pay roughly 15 percent in taxes is that their income is principally capital gains. The Buffett Rule is a disguised tax hike on capital gains. But Obama prefers to present it as just an alternative minimum tax because 50 years of economic history show that raising the capital gains tax backfires.

No matter. Obama had famously said in 2008 that even if that's the case, he'd still raise the capital gains tax -for the sake of fairness.

For Obama, fairness is the supreme social value. And fairness is what he is running on. Obama throws in a free economic lunch for all. "This is not just about fairness," he insisted on Wednesday. "This is also about growth."

Growth? The United States has the highest corporate tax rate in the industrialized world. Now, in the middle of a historically weak recovery, Obama wants to raise our capital gains tax.