Leadership is like good advertising – tough to describe but you know it when you see it. However, examples of leadership usually include a few common characteristics like courage, sacrifice, inspiration, and boldness. We would hope the politicians running the country would display some type of leadership in these troubled times to give us at least a slim sliver of hope that they know what they are doing. However, that rarely happens and, unfortunately, with the filing of his taxes, President Obama missed a golden opportunity to act in a leadership mode for once.
But first, a little background. The President seems to have this obsession with revoking the so-called Bush tax cuts for those American families earning over $250,000 a year, claiming that they make too much money and they should pay more in taxes to help reduce the deficit. There are a number of troubling problems with his stance:
1) First, no one in any position of power in this country should say an American makes “too much” money if that American worked for it in a hard and honest way. This is the land of opportunity, if you can earn more than the average worker by being smarter or working harder, some politician should not be the arbiter of telling you that you make too much.
2) Second, the President never says that these increased taxes will be directly set aside to pay down the debt and the deficit. The increased taxes will likely just go to the government and the political class that operates it, which will undoubtedly spend it it on wasteful projects. He would have had a lot more credibility if he set up a virtual lock box for the increased taxes, forcing those increased revenues directly into a Treasury account whose sole purpose is to immediately pay down the debt. Giving it to the political class is no better than flushing it away.
3) Third, even if you raised taxes on those earning over $250,000 in 2011, it would hardly make a dent in the deficit. This year’s deficit and the wasteful spending that goes into it will be about $1.5 TRILLION. If those American families earning more than $250,000 in 2011 were taxed at the pre-Bush tax cut level, which is only a few percentage points higher, only about $70 billion would be generated in tax revenue. Thus, if the President got his way, this year’s deficit would be reduced by less than 5%, assuming that the politicians in Washington did not spend it.
Which brings us to his 2010 tax returns, the details of which come from an April 18, 2011 Associated Press article:
- The President reported income of $1.73 million in 2010, down from $5.5 million in 2009.
- He paid $453,770 in Federal income taxes, about 25% of his income.
- He made more than $245,075 in charitable donations, about 14.25 of his income, quite a healthy level of charity.
- His family had a $49,945 home mortgage interest deduction for their home in Chicago, indicating that they are not house poor by any stretch of the imagination.
- Not only are they not house poor, for four years they have no utility bills, no car insurance payments, no homeowners insurance bills, and no food bills. They are living the good life for sure.
However, the President missed a golden opportunity at leadership: what if he had overpaid his taxes to the tune of the pre-Bush tax cuts levels? Now that would have been bold and inspiring, he would have been walking the walk of his obsession, paying more in taxes since he obviously earns more than $250,000. He could have gone to the country and said: “Look, I am doing my part, paying more than I have to pay, paying more to the level of what I told the country they need to do.”
But, alas, likely many other blown leadership opportunities, the President blew this one also. If my math is right the President and his family would have paid another $65,000 or so in Federal income taxes if he had operated from a position of leadership. And the U.S. Treasury would have accepted his gift of extra taxes and would have directed it to paying down the national debt. According to the Treasury’s website, they have had a program for many years that allows Americans to contribute more than they legally owe to pay down the national debt.
An interesting side note is the assertion that the President has made more than once that the rich in this country “want” to pay more in taxes. He never provides a source for this data and conclusion, just asserts it as if it is a fact. Thus, his creditability takes another hit in this area if you look at the Treasury program cited above. In 2010, Americans intentionally overpaid their Federal income taxes, to help pay down the debt, by about $2.8 million. This comes out to less than $.01 per American.
I find it hard to believe that rich Americans are dying to pay more in taxes, like the President claims, when less than $3 million a year is ponied up for that purpose. Heck, if only the President had paid to the pre Bush tax cut levels, he himself would have increased the annual size of this pot of money by more than 2%. Thus, one must conclude that even if the rich “want” to pay more in taxes, they certainly have not backed up that “want” with real money and neither has the President.
He filed his taxes just like every other American: not courageously, not with great sacrifice, not inspirationally, and not boldly. A missed opportunity at real leadership. But that should not surprise us. There are very few instances in the past two plus years where he has acted any differently than how he acted on his taxes this year. Not one time where he stood up and faced down the hard choices that would make the country better, more unified, and got it moving in a positive direction. It is just his same old style, typical politics time after time.
Unfortunately, given these trying times, being timid, selfish, not inspirational, and leading from the rear is not what we need today. We will know leadership when we see it and everywhere on our political class horizon we are coming up empty.