What a day that will be
When my Jesus I will see
When I look upon His face
The One who saved me by His Grace
When He takes my by the hand
And leads ME through the promised land
What a day, glorious day, that will be!
That is the first verse of one of the greatest songs ever written. Today, a special day for me, the reality of the precious message of that blessed assurance was reborn at a funeral. A dear, sweet man from my church passed away this week and I was asked to sing for that funeral. That is pretty normal for me now but today was, well, special.
Special came in sitting in back of the auditorium and watching family and friends join at the casket to embrace, share, laugh, cry, feel the loss of a husband, a father, a grand father, a great grand father and as much as anything, a great friend to so many including me. As I watched the unfolding of the viewing from fifty feet away before the service began, I sat with the eldest son, as I am in my family, and engaged him in giving me one word of description of his dad. That word, "tough!" I asked if his dad ever talked to him about his Navy time at Normandy as a pilot of a landing ship that ferried troops from ships off shore into the cauldron of death on the beaches; beaches I have walked and explored and studied and the American Military Cemetery that resides on Omaha beach. His answer, "no, he never did." I can say the same about my father as well, tough and never spoke of WWII.
Now two years ago, I sang at the funeral of my wonderful father-in-law that gave me his baby girl now almost forty-one years ago that came ashore at Normandy. He was a gentle, sweet man but rarely spoke of his WWII days once in combat. But today a reality hit me ... my father-in-law and my friend were both at Normandy and my friend could well have transported my father-in-law to the beaches from the hell the Germans established. That reality left me spellbound and humbled. For the freedom we take so much for granted was granted by men like my friend, my father-in-law, my father and millions more with now a thousand each day leaving this world to a final destination. This destination today was certain where eternity will be for my friend; it will be Heaven.
Just yesterday another Marine was buried in a small town just south of here killed in Afghanistan last week and you might remember my words of the Army Four Star General Starry that died a few weeks ago. Each served, served gloriously and allows me and each of us to do what we take for granted; enjoy the luxury of freedom! So through the tears and the hugs and the stories and the gentle touches this day, a widow is saddened, a family is longing for their patriarch but there is a silver lining to this ... seek to be ready to go for it can come in a moment!
Today, find a veteran and thank him or her, give them a hand salute and a hand shake, tell them you appreciate what they did. I still love to see my two grandsons when then see me render the hand salute and hand shake to an old veteran come to attention and salute with their Poppy! Maybe that will be the greatest legacy I will leave them when my time comes. If so, PRICELESS! Today as the funeral ended a lady I did not know walked up to me, shook my hand, thanked for me the songs and hugged me thanking me for my service to my country; our country. I was humbled into my own tears of thanks and reflection of so many friends killed in Vietnam. Tears are, by the way, a language god does understand!
The president's "Plan for Economic Growth and Deficit Reduction" mainly hinges on persuading Congress to trade $447 billion in temporary payroll tax cuts and spending increases—the "jobs plan"—for permanent income-tax increases of $150 billion a year. Mr. Obama also calls on the 12-member congressional super committee to undertake "comprehensive tax reform," which he defines in peculiar fashion as trading lower deductions for higher rates.
According to the Sept. 19 White House fact sheet, "The President calls on [the super committee] to undertake comprehensive tax reform, and lays out five principles for it to follow: 1) lower tax rates; 2) cut wasteful loopholes and tax breaks; 3) reduce the deficit by $1.5 trillion; 4) boost job creation and growth; and 5) comport with the "Buffett Rule" that people making more than $1 million a year should not pay a smaller share of their income in taxes than middle-class families pay."
But the administration's tax plan violates these principles. It raises rather than lowers tax rates, shrinks tax deductions to pay for more spending, makes no believable contribution to economic growth, has nothing specific to say about the Buffett Rule, and allocates a third of the proposed $1.5 trillion tax increase over the next decade to such miscellany as the temporary payroll tax break, more subsidies for state and local government jobs, and prolonged unemployment benefits.
Nearly all of Mr. Obama's
The Treasury Department's more candid explanation of these same proposals in the 2011 budget estimated that raising the top two tax rates would bring in only an extra $36.4 billion a year from 2011 to 2020, which adds up to little more than $400 billion from 2012 to 2021. The administration's 2011 proposal to raise the tax rate on capital gains and dividends to 20% from 15% on upper incomes was estimated to raise an even punier $10.5 billion a year. But the 3.8% surtax in ObamaCare already raised those tax rates to 18.8% to finance health-insurance subsidies, leaving no meaningful revenue from that source.
In other words, most of that large, $866 billion 10-year tax hike comes from phasing out personal exemptions and deductions. These are not "tax breaks that small businesses and middle-class families don't get," as the president claimed on Monday in his Rose Garden remarks. The phase-outs apply to the same exemptions and deductions enjoyed by those earning less than $250,000, including deductions for mortgage interest, charitable contributions, and state income taxes.
Mr. Obama's second biggest tax increase, supposedly worth $410 billion over 10 years according to the fact sheet, comes from further reducing "the value of itemized deductions and other tax preferences to 28% for those with high income." The phasing out itemized deductions for upper-income taxpayers would shrink those deductions by as much as 80%, so this additional cap would limit any remaining deductions to 28 cents on the dollar. The combination would be severe. Ask any charity.
As for corporate taxes, Mr. Obama said in the Rose Garden that "We can lower the corporate rate if we get rid of all these special deals." But his plan does not include a lower corporate rate. Instead it earmarks the revenue from eliminating any loopholes and "special deals" to pay for the $447 billion jobs bill.
This brings us to the president's puzzling remarks about "the Buffett Plan," which has no clear connection to anything in his own plan. Mr. Obama has said that anyone who thinks "somebody who's making $50 million a year in the financial markets [i.e., Warren Buffett] should be paying 15 percent on their taxes, when a teacher making $50,000 a year is paying more than that" should "have to defend that unfairness. . . . They ought to have to answer for it."
Editorial board member Steve Moore on why some Democrats are opposing Obama's deficit plan.
Warren Buffett's large capital gains (mostly unrealized) and token $100,000 salary are by no means typical. IRS statistics show those earning more than $1 million paid 28.9% in federal income taxes in 2009, compared with 24.6% for those earning from $200,000 to $500,000 and 11.6% for those earning from $50,000 to $75,000.
However, if Mr. Obama is seriously suggesting that marginal tax rates should be the same for the working teacher's salary as for the retired teacher's capital gain, then he may be flirting with a rerun of George McGovern's 1972 presidential campaign theme that, "Money made by money should be taxed at the same rate as money made by men."
Unlike Mr. McGovern, though, Mr. Obama has not yet proposed a capital gains or dividend tax higher than 20%. If the rhetorical Buffett Rule has any meaning at all, it appears to be nothing more than a presidential hint to the congressional super committee that he would like them to propose (as he has not) that incomes above $1 million face a 28% tax on capital gains and dividends.
The trouble is that such a Buffett Rule would quite certainly reduce rather than enlarge federal revenue. That's because we know from experience that a 28% tax on selling stock or property greatly reduces the amount offered for sale. Wealthy people then sit on more unrealized capital gains rather than subjecting themselves to a stiff tax penalty on selling those assets. The 28% tax on long-term capital gains brought in only $36.9 billion a year from 1987 to 1997, according to the Treasury Department, while the 15% tax brought in $96.8 billion a year from 2004 to 2007.
Putting aside the seemingly empty threat of a Buffett Plan tax on capital gains, the president's new-old plan to raise income taxes on families and small businesses earning more than $250,000—to pay for temporary tax gimmicks and extra spending—is just stale wine in a new bottle.
Any plan that would impose permanently higher tax rates on income to pay for temporarily lower tax rates on payrolls is no stimulus or jobs plan under any sort of economics. Neither is a tax-financed extension of unemployment benefits. It's a tax-and-spend plan, and a bad one.
Mr. Reynolds, a senior fellow with the Cato Institute, is the author of "Income and Wealth" (Greenwood, Press 2006).
