Demagoguery

AP has done a little fact-checking on Mr. Obama's recent speeches touting his "Jobs bill". It turns out that Mr. Obama's dictionary apparently has a very expansive definition of "truth":

President Barack Obama makes it sound as if there are millionaires all over America paying taxes at lower rates than their secretaries. "Middle-class families shouldn't pay higher taxes than millionaires and billionaires," Obama said Monday. "That's pretty straightforward. It's hard to argue against that."

The data tell a different story. On average, the wealthiest people in America pay a lot more taxes than the middle class or the poor, according to private and government data. They pay at a higher rate, and as a group, they contribute a much larger share of the overall taxes collected by the federal government.

There may be individual millionaires who pay taxes at rates lower than middle-income workers. In 2009, 1,470 households filed tax returns with incomes above $1 million yet paid no federal income tax, according to the Internal Revenue Service. That, however, was less than 1 percent of the nearly 237,000 returns with incomes above $1 million.

This year, households making more than $1 million will pay an average of 29.1 percent of their income in federal taxes, including income taxes and payroll taxes, according to the Tax Policy Center, a Washington think tank.

Households making between $50,000 and $75,000 will pay 15 percent of their income in federal taxes.

Lower-income households will pay less. For example, households making between $40,000 and $50,000 will pay an average of 12.5 percent of their income in federal taxes. Households making between $20,000 and $30,000 will pay 5.7 percent.

Obama's claim hinges on the fact that, for high-income families and individuals, investment income is often taxed at a lower rate than wages. The top tax rate for dividends and capital gains is 15 percent. The top marginal tax rate for wages is 35 percent, though that is reserved for taxable income above $379,150.

In other words, if the president plans to squeeze significant revenue from the rich, who derive most of their income from investments, he'd have to raise the capital gains tax, but this would be very foolish. It would punish the very entrepreneurship, business investment, and job creation that he says he wants to encourage.

Either the president doesn't know any of the foregoing, in which case he has no business being in the Oval Office, or he knows it but is trying to mislead the American people into resenting the rich for not paying "their fair share", in which case ditto.