Modern Day Robinhood?
In a Knox College Commencement Address in June, 2005 Mr. Obama stated, “Our economic independence depended on individual initiative. It depended on a belief in the free market; but it has also depended on our sense of mutual regard for each other, the idea that everybody has a stake in the country, that we’re all in it together and everybody’s got a shot at opportunity.” I could not agree more with this Mr. Obama. This country was founded on ideals and policies that help our fellow Americans get their shot at opportunity. The belief that we all have a stake in the country and we should embrace a mutual regard for each other is at the core of the American culture.
Yet, I find the perspective of Mr. Obama of 2005 is very different from the position of President Obama in 2012. We, as a nation, are now being asked by President Obama to take sides. President Obama, portraying himself as a modern day Robinhood, wants to take from the rich and give to the poor. However, in doing so he is re-writing the tale of Robinhood. Robinhood is the tale of a time when the poor were paying all the bills and the rich were not giving back to society, the rich were feeding off the backs of the hardworking man. The situation in the times of Robinhood is in stark contrast to the realities of today:
Today, the top 1% of income earners paid 38% of all federal taxes in 2008, while the bottom 50% paid only 3 percent. Forty-nine percent of U.S. households paid no federal income taxes at all.
Understandably, I get confused when President Obama talks about fair. We all should be confused. In a 2008 interview on ABC News Charlie Gibson pointed out, “when the [capital gains tax] rate dropped, revenues from the tax increased; the government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down. So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?”
Obama replied his only reason was for purposes of fairness. But today’s budget deficit is unfair to all Americans; it puts us and all future generations at risk. This begs the question: Should the thrust of U.S. tax policy be to maximize revenue or should the thrust of policy be what President Obama has defined as fair? Do we want a competitive economic environment or do we want to live one generation away from the problem Greece is facing now? Eventually, the bill will have to be paid. And we are reaching the point where the options of how to handle the situation will be forced upon us (à la Greece) if we do not act in a responsible manner for all involved. Let us focus on fiscal responsibility, closing loopholes in the tax laws, reducing the federal budget deficit and implementing programs that re-tool our citizens. This focus will enable all of our society’s members, regardless of their financial situation to benefit from those who want to work hard, who want the opportunity to pursue the American Dream.
All comments and questions are welcomed.
Suzanne M. Antonelli, CFP®