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Health & Fitness

The State of the Union

North Potomac native Dan Grossberg breaks down Obama's State of the Union and expresses his disgust.

The State of the Union address has taken on a familiar form.  It goes back to the earliest days of the republic but as an adult I've gotten tuned into this recipe where the President takes 45 minutes - 30 if we're lucky, 60 or more if we aren't - to subtly run down the list of departments and describe their achievements and project a vision for each.  Education, Commerce, Defense, Justice, etc.  The president sequences his remarks on each department based either on priority or some calculation of what will generate the most drama.

But listening to Barack Obama tonight, seriously, is making me ill.  While he is sticking to the formula, every section of his speech tonight has ended with a recommendation to Congress to "pass this legislation…."  or, "send me a bill to sign and I will sign it."  His vision of perfecting the nation will come through more legislation… more having the government involved in fixing things for us.  Not only does this signal that he just doesn't understand that our problem today is that Washington is weighing down our lives, it hurts me personally because I DON'T NEED ANYMORE HELP FROM WASHINGTON!

Why doesn’t he end a section with, "I have ordered the National Labor Relations Board to focus on violations of labor contracts and stop meddling in the affairs of private companies." or  "The Department of Energy will review all of its programs and discontinue those that no longer meet their purpose or where their purposes are obsolete."

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And what's all this about "fairness?" 

We have laws ensuring equal rights starting with the 14th Amendment and a host of laws and regulations that are designed to prevent or rectify cases where people are denied fair treatment in public affairs.  Fairness does not mean people are entitled to equal outcomes from life.  As my father used to say, "Fair means everyone gets 24 hours a day to do with whatever they like."  Do you really want the government telling us - and enforcing with laws - what they think is fair?

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I can't write a whole article about all the topics avoided (Obama's legislative successes - stimulus spending and Obamacare); embellished ( the role of federal programs in retaining employers and jobs in Wisconsin and North Carolina); and straight out foolishness ( "I'm a Democrat; but I believe what Republican, Abraham Lincoln, believed: the government should do for people only  what they cannot do better for themselves and no more. ")  But I must highlight a significant falsehood at the core of Obama's drive for "fairness" which, if you ask me, really is a not-so-veiled call for class warfare.

At nearly 60 minutes into the address, Obama presented his concern that Warren Buffett's taxes are lower than his secretary's.  (She was notably in the audience for dramatic effect.)  He proposed that the tax code should be more fair.  "We don't begrudge financial success in this country.  We admire it."  And then the president went on to tell us how taxes on the rich would solve our trillion dollar budget gap.  He neglected to mention the following:

  • Buffett pays tens or hundreds of millions of dollars in taxes.  His secretary pays taxes like the rest of us - the wealthy pay lower rates on capital gains for good reason and they pay a lot more actual dollars.
  • The wealthiest 1% of taxpayers are ALREADY paying 18% of total income taxes and 35% of all taxes collected by the federal government.
  • 47% of Americans pay nothing at all in income taxes
  • The 15% capital gains rate - paid primarily by the wealthy - is applied to earnings from invested capital, not direct wages earned.
  • Returns on invested capital are generally from corporate profits AFTER being taxed at 35%.  This means a private enterprise together with its owners must create profit of $2.25 and pay $1.00 to the federal government in order to return $1.25 to the owners.
  • Capital invested by individuals is generally AFTER being earned and taxed at 39%.  This means that an individual (at top tax rates) needs to earn $1.64 before choosing to invest $1.00.
  • Finally, and most important, without a globally competitive tax rate on profits, capital would be invested elsewhere and jobs will follow.

It seems to me that improving the "fairness" of our tax system would mean reducing the burden of our federal spending on the wealthy and increasing the number of people who pay something… anything… into the system.  Since that isn't going to happen, I recommend we stop with the politically charged "fairness" arguments and improve our tax code in a way that encourages economic growth.  When the economy grows, everyone wins and almost everyone agrees that reducing the burden of government on the economy is the best way to grow the economy, opportunity and prosperity for everyone.  Taking from one group and giving to another is most assuredly not the best way to improve conditions.

Buy into the leadership ability of a man who would deliver this disingenuous speech at your own peril.  It is said we have the leaders we deserve and we have Obama because WE DO NOT DEMAND MORE.   Sadly, the choices the GOP appear to be offering aren't stellar and I have no wisdom to offer on the horses in that race.  What I know is this: when you hire a chief executive, it is better to hire someone with experience working as an executive.  When you want to hire someone to change a system, it is best not to hire someone who was shaped by the system.

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