It’s Tuesday, July 10th, 2012….and here’s The Gouge!

First up, as the WSJ reports….

Off the Tax Cliff He Goes *

President Obama wants lower rates for GE and J.P. Morgan than for small business.

* And he never even yelled “Geronimo”!

So the 2013 tax cliff is a big enough economic problem that President Obama now wants to postpone it for some taxpayers. But it isn’t so big that he’s willing to curb his desire to raise taxes on tens of thousands of job-creating businesses.

That’s the essence of Mr. Obama’s announcement Monday that he wants Congress to extend current tax rates for a year, but only for those making less than $200,000 a year. This is a political gambit designed to protect Democrats who are starting to feel queasy about opposing GOP plans to extend all of the Bush rates as the economy weakens again. The ploy could help Democrats if Republicans fall for it, but it won’t reduce the economic damage to the country.

By Mr. Obama’s economic logic, tax increases matter on middle-income earners but are irrelevant to everyone else. “By the way, these tax cuts for the wealthiest Americans are also the tax cuts that are least likely to promote growth,” as he put it Monday.

But Mr. Obama is demanding tax increases, not tax cuts, and large increases at that. If the Bush tax rates expire as scheduled on December 31, rates on the top two income brackets will jump to 39.6% from 35%, and 36% from 33%. Add the scheduled return of income phaseouts for exemptions and deductions, and the rates go up another two-percentage points—to at least 41% and 35%.

Mr. Obama claims this will merely return rates to what “we were paying under Bill Clinton,” but that’s not true either. It ignores his ObamaCare tax increase of 0.9% on top of the current 2.9% Medicare tax, plus a new 2.9% surcharge on investment income, including interest income.

That’s an additional 3.8% surcharge on investment income, and added to the Bush expirations would take the capital gains rate to 23.8% from 15% today, and the dividend tax rate to about 45% from 15%. In Mr. Obama’s economic world, tax cuts for middle-class “consumption” are good, but low rates to spur saving and investment are bad. This makes no sense because consumption is ultimately the product of saving and investment.

The President dismissed all of this as merely affecting 3% of small business owners. But that includes tens of thousands of the most productive, fastest-growing small businesses—those most likely to hire workers amid a national jobless rate of 8.2%.

Congress’s Joint Tax Committee—not a conservative outfit—estimates that in 2013 about 940,000 taxpayers will have enough business income to meet Mr. Obama’s tax increase threshold. And of the roughly $1.3 trillion in net business income, about 53% will get hit with the higher tax rates.

This is because millions of businesses report their income as sole proprietors and subchapter S corporations that file under the individual tax code. So Mr. Obama wants these businesses to pay higher tax rates than the giant likes of General Electric or J.P. Morgan. Does that qualify as “tax fairness“?

As for the impact on growth, even Keynesian theory holds that raising taxes should be avoided in a weak economy. That’s the argument that Mr. Obama used in late 2010 when he agreed with Republicans to extend the Bush rates through the end of 2012.

His assumption then was that the economy would be stronger now, but today we are in the third slow-growth patch in three years. Businesses are sitting on their wallets as they wait out the tax, regulatory and election uncertainty. Mr. Obama’s tax gambit will only increase that uncertainty and further retard investment and job creation.

We also know from experience that high earners are most able to move their money to avoid high tax rates. If they don’t have tax shelters at home, they can find opportunities abroad. Mr. Obama is running ads accusing Mitt Romney of sending jobs offshore, but the best way to send capital and jobs overseas is to raise U.S. tax rates to levels that aren’t competitive with the rest of the world.

Mr. Obama tacitly admits this when he talks about corporate tax reform, but raising tax rates merely increases the incentive for Congress to create more tax shelters. Mr. Obama promised Monday that if Republicans accept his proposal now, they can all come together on tax reform next year. But he knows that if tax rates rise, the Beltway’s revenue “scoring” conventions will make it that much harder to cut rates again as part of tax reform. In any event, he showed the value of his promises during his 2011 backroom budget charade with Speaker John Boehner.

The good news Monday is that Republicans in Congress and Mr. Romney seemed disinclined to take this class-war bait. Perhaps they realize that if they agree to raise some taxes but not others, they’ll dispirit their own base and hurt the economy. They can also put Senate Democrats on the spot by forcing them to choose between extending rates for everyone and accepting Mr. Obama’s tax increase. Republicans can win this debate by stressing growth over fairness and jobs over income redistribution.

Since we’re on the subject of the Dimocratic myth of “fairness”, consider the following facts supplied by Mark Perry’s latest installment of Carpe Diem at AEI.org:

Top 400 taxpayers paid almost as much in federal income taxes in 2009 as the entire bottom 50%

We hear all the time that the “rich don’t pay their fair share of taxes” (you’ll find more than 100,000 Google search results for that phrase).  Here’s an analysis using recent IRS data that suggests otherwise.

1. In 2009 (most recent year available), the top 400 taxpayers based on Adjusted Gross Income earned $81 billion as a group, and paid $16.1 billion in federal income taxes at an average tax rate of almost 20% (see chart above).

2. In 2009, the bottom 50% of taxpayers, a group totaling 69 million, earned collectively more than $1 trillion and paid $19.5 billion in federal income taxes at average tax rate of less than 2% (see chart above).

Bottom Line: A small group of 400 of America’s most successful earners in 2009, about the number of residents living in a typical apartment building in Washington, D.C., paid almost as much in federal income taxes as the entire bottom half of America’s 138 million tax filers, which is a population equivalent to the combined number of residents living in America’s 29 least populated states, plus the District of Columbia.  What makes this disparity possible is the fact that an estimated 47% of individual income tax returns filed in 2009 had a zero or negative tax liability.

When you have only 400 Americans paying almost as much in federal income taxes as the entire bottom 50% of American filing income tax returns, I think we can dismiss any notion of the rich not paying their fair share of taxes.  In fact, maybe the IRS should publish the names and addresses of the Top 400 (or provide a forwarding service to protect anonymity), so that we can all send them “Thank You” letters to express our gratitude for shouldering such a disproportionate share of our collective tax burden.

Like Potter Stewart’s standards for pornography, Dimocrats will not….because they cannot….define what constitutes “fairness”.  They just know it when they see it….but only after they’ve reduced America to a perpetual state of dependence and achieved Idi Amin-like office-for-life.

In a related item, it’s worth noting The Obamao’s claim his proposed tax hikes won’t hurt small businesses is so spurious even the MSM can see through the deception….

….which is indeed saying something.

Next up, in the “You Can Tell A Lot About An Attorney General By The People He Helps” segment, another black eye for….er,….black mark against….uh,….another impropriety involving Eric Holder hits the headlines:

Denise Rich gives up U.S. citizenship, will save millions in U.S. taxes

Denise Rich, songwriter, socialite and the former wife of a pardoned billionaire, has given up her U.S. citizenship, and will reportedly thus save millions in U.S. taxes as well. Rich appeared under her maiden name, Denise Eisenberg, in a quarterly listing of Americans who renounced their U.S. citizenship, Reuters reports.

Facebook co-founder Eduardo Saverin made headlines when gave up his U.S. passport and became a citizen of Singapore, just before the social networks’s May I.P.O.

Rich wrote songs for Aretha Franklin and Jessica Simpson, but she’s best known as the ex-wife of Marc Rich, who fled the country in 1983 after being indicted for tax evasion, racketeering and trading oil with Iran. President Clinton pardoned Rich, a big Democratic donor, on his last day in office in 2001. A House of Representatives committee concluded that Denise Rich helped bring about her ex-husband’s pardon through donations to the Clinton library and campaign.

Two thoughts occur to us: first, any question had Ms. Rich been associated with any prior Republican Administration this story would be used against Mitt Romney?  Second, with all her money, wouldn’t you think she do something about those Prada-sized bags under her eyes?!?

And in Tales From the Darkside, another story you won’t be getting from the MSM:

Mob of Black Teens Attack Whites in Columbus After Fireworks

During the 2012 Red, White & Boom celebration in Columbus, Ohio, there were dozens of police officers at the fireworks. Most of these officers were clumped in bunches near the Scioto River and simply watched the fireworks along with the hundreds of thousands of spectators. After the show ended and people started walking back to their cars, things turned violent. A gang of approximately 30 black youths (both male and female) started walking and running down Broad Street and randomly assaulted white people — old people, children, women.

Resident Michael Meeks first became aware of the violence in front of a church at the corner of Third and Broad streets. One block east of there, a man crossed the street through the traffic holding his crying son. They clearly had been assaulted. “When others asked if they were OK,” Meeks explained in a letter to the editor to the Columbus Dispatch, “he said, ‘No, we’re not OK; we got separated from my wife and daughter, and they’re still over there.'”

Meeks continued:

“Finally, two Columbus officers were seen slowly walking toward the scene of this violence. At this point, the black youths crossed the street to the opposite side of the officers and started randomly attacking more white people on the north side of Broad Street. I know; I was assaulted by five different youths.

“At this time, the police meandered to our side of the street. Some of us went to the officers and said, ‘Do something, innocent people are getting assaulted right here on Broad Street.’ One officer replied, ‘We don’t have enough officers.’ After seeing the dozens of officers near the riverfront, I went home feeling this officer’s answer was a poor one…

“Broad and Third streets are at the heart of Downtown. Thousands of people were walking down these two streets after the fireworks to get back to their cars. Yet, there were no, or embarrassingly few, police officers anywhere to be seen on these streets. “The police officers remained clustered near the waterfront, yet no one had the vision to spread them out along the exit venues of the event to protect the citizens.”

Gee….rioting mobs of blacks assaulting innocent (White or Asian) victims; police stand by and do nothing.  Where have we heard THAT before?!?

On the Lighter Side….

And in News of the Bizarre, another Motown hit….of a sort:

Woman killed after off-duty Detroit officer’s gun goes off

Detroit Police Chief Ralph Godbee offered his department’s condolences and promised a thorough investigation after a woman was fatally wounded when an off-duty officer’s weapon fired during a party. Godbee says 24-year-old Adaisha Miller was shot while dancing with the officer at an outdoor social gathering about 12:30 a.m. Saturday. The bullet punctured Miller’s lung and hit her heart, and she died at a hospital.

Police Sgt. Eren Stephens said earlier Monday that Miller “embraced the officer from behind, causing the holstered weapon to accidentally discharge.” “There is no indication whatsoever that the officer placed his hand on his weapon at all,” said Godbee during a press conference Monday afternoon. He added that the officer had his weapon secured in a department-issued holster around his waist.

The officer will remain on administrative duties, Godbee added, while authorities investigate the shooting and report their findings to the Wayne County prosecutor. Godbee says officers are not required to carry weapons while off-duty.

Miller’s mother says her daughter would have turned 25 on Monday. “He’s at a private party with relatives, why do you need a gun?” said Yolanda McNair. “Instead of telling her happy birthday, I’ve got to plan her funeral.”

While our heart goes out to Ms. Miller’s family, this one’s a puzzler.  An off-duty cop dancing with a holstered semi-auto, a round in the chamber and the weapon’s pointing….up?!?  We’ve more than a passing familiarity with a variety of firearms, and are having a hard time imagining the circumstances where a pistol secured in a waist holster could be “accidentally” pointed up and fired.  Or perhaps this is Detroit’s version of the Magic Bullet?

Any way you look at it, we’re of the strong opinion there’s more to this story than we’re being told.

Which brings us to today’s finale and the “All The News That Fits Our Preconceived Worldview” segment in which James Taranto relates a recent epiphany experienced by the New York Times:

It’s All Over but the Shooting

From a New York Times report on Libya’s election:

Perhaps perversely, the abundance of arms left over from the fight against Colonel Qaddafi may have helped defend the vote as well. In some places, neighbors brought their own Kalashnikovs to protect polling places.

“Perhaps perversely,” law-abiding people with guns deter violence? Normal Americans would regard that as obvious….

Which is why such a story would come as a shock to both the staff and readership of the Times!

Magoo