Obama Declares War

by Gerri Willis


It was a big question in last night's State of the Union Address. And President Obama was pretty clear about who he thinks is getting the raw end of the deal.

"We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by,” he said. “Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules."

The President is vowing to use the power of government to close the gap between the super rich and the middle class.

He is demanding millionaires pay at least 30% tax rates, tapping into perceived public anger at low rates paid by the rich including Republican candidate Mitt Romney.

But here's where the lines between reality and rhetoric are completely blurred.

The truth is even the richest among us - the Romneys, the Buffetts - don't just pay a 15% rate.

According to Americans for Tax Reform, capital gains and dividends actually face a tax rate of closer to 45% because the money used to make these investments were already taxed usually at the 35% mark.

But this math seems to be getting into the weeds so let's simplify it.

The wealthy in this country, you know the bad guys, are already paying their fair share.

It really is that simple!

According to the I.R.S, not some right-wing radical think tank, the top 10% of earners in America pay nearly 70% of the Federal Income tax.

This big piece of the pie - with just 10% of American workers in it - pays 70%!

Breaking it down even further, the top 5% pays well over half the income taxes:

Again the balance is way off, and get this: the top 1%, the people getting hammered by protesters on Wall Street and others on the left, these big bad one percenters pay more than 38% of all Federal Income tax.

You tell me if that seems fair!

And if we're talking fairness here, it's not just about how much is paid in taxes. It's also about where the money goes and who gets what in return.

That again - to me - is not fair!

The tax foundation did an in-depth accounting study of Washington's "redistribution of wealth." Here's what they found.

The bottom 60% of families - those earning less than $85,000 a year - pay about $17,000 a year in taxes. But the benefits they receive from the government - everything from national defense to welfare - tops $20,000 a year!

And look at the lowest income Americans - those making less than $11,000 a year.

Their share of the taxes are about $1,700, but they get $17,000 worth of benefits!

In other words, they get more than $10 in benefits for every dollar they paid in taxes of any kind!

Even middle-class families get $1.15 for for every dollar paid.

Let's look at the flip side: the top 40%.

A family earning between $86,000 - $110,000 a year - comes out about even... 98 cents on the dollar.

But the wealthiest - those earning more than $712,000 - received only 43 cents on the dollar!

Mr. President, maybe it's time we stop worrying about what's fair, and start worrying about what works.

Nobody - left, right or center - thinks our current tax code is working.

It's time we take away the loopholes, the lobbyists, the long-wording, and switch to a flat tax.

Everyone cuts a check to the I.R.S. Everyone pays the same rate.

Because, let's be honest, 15% of $39 billion dollars is a heck of a lot more money than Warren Buffett's secretary pays.

What Obama Can't Take Credit for in SOTU

by Gerri Willis

President Obama tonight in his State of the Union is expected to announce a new era of American energy. He’ll claim credit for the jump in oil production and try to commandeer authorship of the natural gas boom as well.

But the facts tell a different story.

Once you look at the record, you realize the energy boom happened in spite of the Obama administration, not because of it.

Production in the Gulf of Mexico, for example, is down 35% from projections made by the Energy Information Administration just a little over a year ago.

Take a look at this chart...

By the way, the E.I.A is the federal government, not an industry trade group.

Why did production take a nosedive?

Obama shut down oil production in the wake of the BP oil spill for 137 days.

In fact, the moratorium wasn't lifted until drillers challenged it in court.

In other words, Obama turned that tap off and may have never turned it back on until a judge forced the issue.

The impacts of this lost production are pretty extreme – 90,000 jobs gone after 11 oil rigs were moved out of the region.

Here's where those rigs went (oh and in case your forgot, we gave Brazil a big fat loan to develop offshore oil reserves).

Losing those rigs is a $21 billion loss in capital investments for the region. And the impact on government isn't inconsequential. The government lost $5 billion in tax receipts after those rigs stopped production.

So it’s all the more impressive. We are making such huge inroads on energy independence.

You can attribute much of this to the fact technological advancements in fracking are boosting production, loosening natural gas and oil throughout the Midwest and the West.

Now according to the E.I.A: the U.S. has more than 2,500 trillion cubic feet of potential natural gas resources.

At the 2010 rate of consumption, that's enough to supply over 100 years of use.

But 69% of this production relies on hydraulic fracking to bring the energy to the surface.

Whether fracking will continue though is anybody's guess because eight federal agencies are investigating the technique (one, by the way, that has been around since the 1940s).

Oil industry advocates say production could soar even higher if the 85% of coastline was opened up to production.

But the gains already are impressive. Already, the U.S. is importing just 22% of its energy needs.

And that number is expected to decline to 13% by 2035.

That makes us much less dependent on foreign oil -- a good thing that presidents have been calling for four decades. We are closer now than ever before.

But has Obama led that new era of energy?

I’d say the facts point to no way. No how.

It’s a story as old as politics.

How the White House Website Is Tricking You

by Gerri Willis

Time for the State of the Union again - the long-winded to-do list offered by the President in January to a joint session of Congress. And that got me thinking about last year's State of the Union.

What did the President promise - what did he actually succeed at making happen? It's time for a report card -- the President's report card.

First things first: One of Obama's big themes last year was national unity - his speech came in the wake of the assassination attempt on Congresswoman Gabrielle Giffords in Arizona.

Obama pleaded for Americans to come together in the wake of the tragedy. But, in the end, the rhetoric just got worse.

Giffords, by the way, just announced she will resign her congressional seat to continue her recovery.

Other initiatives that the President promised to pursue that have failed to see the light of day: replacing no child left behind with a better education law, making a tuition tax credit permanent, rewriting immigration laws, eliminating tax subsidies to oil companies, reforming the tax system. Much of this list got caught up in the debate over the budget and spending.

Now the President's list of accomplishments is shorter -- and the goals less ambitious:a free trade deal with South Korea, killing an ObamaCare reporting requirement for small businesses, creating a website to show taxpayers where their tax dollars go.

It's a laudable goal to create a website to help people understand how their tax dollars are used -- but it's not quite what I'd call a stretch goal.

According to Scott Hodge of the Tax Foundation, the website is a good attempt at educating people but it does not reflect reality. Here's what he had to say:

1)If you select one of their examples, say a family earning $50,000 with one child, it shows them with an income tax liability of $260. While that is probably accurate, that family is getting far more in government services and benefits than $260 - probably ten times as much. See the chart below on how much people get in government spending for every dollar of taxes they pay. On the flip side, if I put the amount of taxes that I pay into the calculator, it will show how my $18,000 was spent. However, at my income level I probably got less than $18,000 worth of benefits or services from government. The calculator does not reflect that.

2)The deficit. The government is borrowing .40 cents of every dollar it spends. Meaning, everyone in America is getting 40% more government than they are paying for. So if I pay $1,000 in taxes, I'm actually getting $1,400 worth of government. The calculator doesn't reflect that.

Bottom line, Lots of people are getting more government than they are paying for and some are getting a lot less than they are paying for (it's called redistribution). And we are all getting more than we're paying for thanks to the money that is being borrowed from our kids because of the deficit.

Here's another reality: 2010 was a year of modest goals and modest attainment for the president.

But then frankly, there are a lot of initiatives here that I am glad the President didn't get done. Barack Obama's idea of tax reform, for example, probably doesn't match my own.


On Twitter