He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under the first President Bush. He is a graduate of Harvard College and Harvard Law School. He is author of The Obamacare Disaster, from the Heartland Institute, and President Obama's Tax Piracy, and his latest book: America's Ticking Bankruptcy Bomb: How the Looming Debt Crisis Threatens the American Dream-and How We Can Turn the Tide Before It's Too Late.
Latest posts by Peter Ferrara (see all)
- Tax Reform Would Modernize How U.S. Taxes Global Business Income - June 24, 2017
- Saving Money but Costing Lives - June 23, 2017
- A Principled Tax Reform Allows Expensing of all Business Costs - June 23, 2017
[First posted at Forbes.]
President Obama started his Democratic Convention nomination acceptance speech with one overriding truth: “But when all is said and done – when you pick up that ballot to vote – you will face the clearest choice of any time in a generation. It will be a choice between two different paths for America. A choice between two fundamentally different visions for the future.”
Truer words were never spoken. Because America is deciding in this election whether it wants to ditch the economic system that made us the richest, most prosperous nation in the history of the world, for the hope and change not for something better, but for something supposedly fairer, like socialism and communism is supposedly fairer than capitalism.
Churchill understood the choice perfectly. He said, “The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of socialism is the equal sharing of misery.”
Obama immediately then plunged into falsehood in his convention speech, saying right after the above, “Ours is a fight to restore the values that built the largest middle class and the strongest economy the world has known.” But that is not what Obama is fighting for. As the Bible says, “By their fruits ye shall know them.”
As noted in last week’s commentary, middle class incomes have fallen precipitously under President Obama, down from $54,983 in January, 2009, the month he entered office, to $50,964 by June, 2012, a decline of 7.3%, or $4,019 per family. Moreover, the decline in middle class incomes since the recession technically ended in June, 2009, has been nearly twice as great as the decline during the recession, which is unprecedented. As for the strongest economy the world has known, economic growth under Obamanomics, during the recovery, after the recession, has been mired at about half the historic U.S. average, only about one-fourth to one-third as much as during the typical recovery after a recession. What Obamanomics has delivered is the worst economic recovery from a recession since the Great Depression.
The rhetoric about the middle class is straight from self-professed radical extremist Saul Alinsky, and his book Rules for Radicals, preaching that left wing socialist economics would be socially accepted if it was advanced as a program for the middle class. Obama was actually an instructor in Alinsky’s social manipulation methods for the radical Left front group ACORN during his days as a street agitator (“community organizer”).
Obama then went on the attack in his convention speech, saying, “Now our friends at the Republican convention were more than happy to talk about everything they think is wrong with America, but they don’t have much to say about how they’d make it right. They want your vote, but they don’t want you to know their plan.”
That couldn’t be more wrong. Romney has detailed a very specific tax plan based on a 20% across the board cut in income tax rates for everyone, perfectly analogous to Reagan’s 25% across the board tax rate cut in 1981 that precipitated the greatest economic boom in world history, what Steve Forbes rightly called “an economic golden age.” Cuts in tax rates promote economic growth by enabling producers to keep a higher percentage of their production, expanding incentives for increased productive activity, such as savings, investment, starting businesses, expanding businesses, creating jobs, entrepreneurship, and work. Tax rate cuts are the only tax cuts that promote growth. Reigniting economic growth is the foundation for reducing the deficit.
Those tax rate cuts would directly benefit the middle class by cutting the rates that apply to middle class incomes and below. Romney also proposes extending the Bush tax cuts for the middle class. Romney would in addition repeal all the middle class tax increases in Obamacare, including the individual mandate. He would repeal as well the death tax, which trashes successful small businesses at the death of their owners, and the Alternative Minimum Tax, which threatens the middle class in high tax states.
The middle class would also benefit indirectly from the tax rate cuts for higher income taxpayers, due to the resulting increased jobs, and the higher wages and incomes that arise from increased demand for labor and from higher productivity due to increased capital investment.