Obama refuses to set upper limit on tax rate

James Pethokoukis of the American Enterprise Institute noticed a very revealing moment in President Obama’s Thursday interview with CNBC’s Steve Liesman:

STEVE LIESMAN: Mr. President, I just want to pivot back one more time to domestic issues.  You’ve said a bunch of times that getting the wealthy to pay a little bit more, and you’ve succeeded in raising that top tax rate to 39% or rolling back the tax cuts. Is there a limit there?  Is there a limit to how much you believe the government should take from an individual in terms of a top tax rate?

PRESIDENT OBAMA: You know, I don’t have a particular number in mind, but if you look at our history we are still well below what, you know, the marginal tax rates were under Dwight Eisenhower or, you know, all the way up even through Ronald Reagan.  Tax rates are still lower on average for most folks.  And what that means is that we probably can make some more headway in closing loopholes that folks take advantage of. As opposed to necessarily raising marginal rates.

So Obama wants higher rates and closing of loopholes. Pethokoukis comments:

The president’s answer certainly suggests, at least to me, that he believes the US is nowhere close to the danger zone. If so, he is merely in sync with top left-leaning economists —  such as Peter DiamondThomas Piketty,Emmanuel Saez —  who argue for top rates in the 70% to 80% range, if not higher. Oh, and at the same time the high-tax crowd would close tax loopholes and increase tax enforcement to limit avoidance.

When the total government take exceeds 50%, then it has become the “senior partner” the dominant force and beneficiary of your own labor. That is my breaking point. At that moment, I start valuing leisure over income. Even to the point of materially damaging my standard of living. Maybe I am an outlier, but I doubt it.

Trustafarians, lottery winners, and a few other examples aside, most people who earn high incomes bust their asses for a sustained period of time to get there. They take risks, they live at the edge of poverty in order to invest their time and resources in growing a business, and they defer all sorts of normal pleasures to pursue their vision.

If the government takes the lion’s share of the fruits of this effort, there is simply no point in doing this anymore. I will seek other pleasures, ones that require less money and benefit from more leisure.

One other point to consider, as Democrats work to make our border nonexistent: immigration works two ways. If we turn the screws on the productive classes in this country, many of them will leave for greener pastures,. I can assure you that many countries would welcome an influx of high tech entrepreneurs, anxious for all the money and other benefits that spin off of a hardworking, intelligent and creative elite.

Pethokoukis warns that Obama’s tell needs to be understood in the context of the raging deficits that sooner or later will come due. Confiscatory taxation is the goal of these people. They hate achievers.

James Pethokoukis of the American Enterprise Institute noticed a very revealing moment in President Obama’s Thursday interview with CNBC’s Steve Liesman:

STEVE LIESMAN: Mr. President, I just want to pivot back one more time to domestic issues.  You’ve said a bunch of times that getting the wealthy to pay a little bit more, and you’ve succeeded in raising that top tax rate to 39% or rolling back the tax cuts. Is there a limit there?  Is there a limit to how much you believe the government should take from an individual in terms of a top tax rate?

PRESIDENT OBAMA: You know, I don’t have a particular number in mind, but if you look at our history we are still well below what, you know, the marginal tax rates were under Dwight Eisenhower or, you know, all the way up even through Ronald Reagan.  Tax rates are still lower on average for most folks.  And what that means is that we probably can make some more headway in closing loopholes that folks take advantage of. As opposed to necessarily raising marginal rates.

So Obama wants higher rates and closing of loopholes. Pethokoukis comments:

The president’s answer certainly suggests, at least to me, that he believes the US is nowhere close to the danger zone. If so, he is merely in sync with top left-leaning economists —  such as Peter DiamondThomas Piketty,Emmanuel Saez —  who argue for top rates in the 70% to 80% range, if not higher. Oh, and at the same time the high-tax crowd would close tax loopholes and increase tax enforcement to limit avoidance.

When the total government take exceeds 50%, then it has become the “senior partner” the dominant force and beneficiary of your own labor. That is my breaking point. At that moment, I start valuing leisure over income. Even to the point of materially damaging my standard of living. Maybe I am an outlier, but I doubt it.

Trustafarians, lottery winners, and a few other examples aside, most people who earn high incomes bust their asses for a sustained period of time to get there. They take risks, they live at the edge of poverty in order to invest their time and resources in growing a business, and they defer all sorts of normal pleasures to pursue their vision.

If the government takes the lion’s share of the fruits of this effort, there is simply no point in doing this anymore. I will seek other pleasures, ones that require less money and benefit from more leisure.

One other point to consider, as Democrats work to make our border nonexistent: immigration works two ways. If we turn the screws on the productive classes in this country, many of them will leave for greener pastures,. I can assure you that many countries would welcome an influx of high tech entrepreneurs, anxious for all the money and other benefits that spin off of a hardworking, intelligent and creative elite.

Pethokoukis warns that Obama’s tell needs to be understood in the context of the raging deficits that sooner or later will come due. Confiscatory taxation is the goal of these people. They hate achievers.

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