As such, it’s clever. It deftly channels the sentiment underlying Occupy Wall Street (the original version, before its slovenly, whiny, aggressive weirdness made it politically toxic). It perfectly pits the 99 percent against the 1 percent. Indeed, it is OWS translated into legislation, something the actual occupiers never had the wit to come up with.
Clever politics, but in terms of economics, 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, in fact, 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: It reduces federal revenues, while lowering the tax raises revenues.
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 — although he is not prepared to come clean on its price. Or even acknowledge that there is a price. Instead, 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 to the fourth highest. No better way to discourage investment — and the jobs and growth that come with it.
Three years ago, Obama promised universal health care that saves money. Today, he offers a capital-gains tax hike that spurs economic growth. This is free-lunch egalitarianism.
The Buffett Rule redistributes deck chairs on the Titanic, ostensibly to make more available for those in steerage. Nice idea, but the iceberg cometh. The enterprise is an exercise in misdirection — a distraction not just from Obama’s dismal record on growth and unemployment but, more importantly, from his dereliction of duty in failing to this day to address the utterly predictable and devastating debt crisis ahead.
— Charles Krauthammer is a nationally syndicated columnist. © 2012 the Washington Post Writers Group.