President Obama’s reelection campaign is apparently going to center on the theme of fairness. Many political observers point out that this is nothing more than divisive class warfare, the politics of envy, the demonization of the successful. Certainly, it is a 180-degree turn away from his 2008 campaign stance as a uniter, the “post-racial President,” and his now-hollow first-run claims that, “We’re not the red states of America or the blue states of America…we’re the United States of America!”

However, Obama’s campaign strategy is understandable, even logical given his circumstance. Under normal conditions, an incumbent President runs on his record of accomplishment. To wit: The economy has tangibly improved under this hypothetical President’s watch. Some important foreign affairs matters, critical to the actual national security and trade interests of the Unites States (not mere window dressing), have been resolved successfully. The national mood has improved and the public’s confidence in Government—perhaps because a series of central domestic concerns regarding education or health care or the Judiciary or entitlement reform/solvency have been favorably concluded — is on the rise. The all-important “right track/wrong track” measure is pointing solidly in the correct direction.

These are the marks of most presidents with solid reelection prospects. As President Reagan said in 1980, running against the hapless, inept Jimmy Carter, “Are you better off today than you were four years ago?”

With gasoline at a then all-time high, the country in recession, interest rates in the 17-21% range for consumer loans and mortgages, the Iran hostage situation, and our military suffering from under-funding, inadequate training, outdated equipment, and poor morale, the answer was a resounding, “No.” Reagan wrested the presidency away from Carter in the most crushing rebuke of a sitting president in modern times.

Unfortunately for President Obama, there are none of the usual accomplishment benchmarks in place for a successful second-term campaign:

The economy has rendered its unarguable verdict on his socialism/community organizer/Government-as-answer approach to economic recovery. The verdict—more than three years in—is, ”Sorry. Not working.” Remember, the economy that Reagan “inherited” from Carter was worse by every relevant measure than what Obama took over from President Bush. By this point in Reagan’s first term, the economy was absolutely booming and job creation was extremely strong. You are free, of course, to look at historical facts with whatever revisionist eyes you so choose. Regardless, it’s pointless to argue whether a 10-0 shutout loss in baseball is better or worse than a 3rd-round knockout in boxing.

Similarly, the nation has a decidedly negative take on many central, defining aspects of Obama’s presidency:
– Public opinion runs very strongly against his over-reaching universal, Government-run healthcare initiative.
– The majority of the electorate rejects Obama’s wasteful pandering to his Green lobby at the expense of the pursuit of US energy production.
– The country recoiled as Obama went on his international “apology tour,” where he bowed to foreign leaders and seemed only too eager to trumpet America’s past mistakes and errors while seeming almost ashamed at the leading role for good and peace we’ve taken over the last hundred years or so.
– Further, the public doesn’t appreciate key Obama appointee Attorney General Eric Holder’s arbitrary, politically correct, responsibility-avoiding involvement in numerous issues such as illegal immigration and Fast and Furious. Holder’s behavior reinforces the feeling of favoritism the Obama administration shows towards its supporters and retribution against its political enemies. The public feels this is not an impartial Federal Government looking out for us all, but rather a taskmaster randomly dolling out the rewards and punishments as it sees fit.

There are dozens of other examples. So with all this as a backdrop, President Obama is shorn of the usual attributes on which to base his reelection campaign. He therefore has cast aside the normal strategy and approach of touting his record and instead sought to identify those who are most dependent on his Government largess and mobilize that voting bloc by highlighting how they would “suffer” if the taxpayer-funded Government handout procession were to diminish even a little from the historically-unprecedented levels he has established.

He shrouds this tack with virtuous, principled-sounding phrases like “Pay their fair share,” “Everyone should play by the same rules,” and introduces a bill called the Buffet Rule—a minimum 30% tax on anyone earning over a million dollars, so “Warren Buffet’s secretary doesn’t pay a higher percentage in taxes than a billionaire.”

As any first-year, peach-fuzz accounting freshman can tell you, the capital gains taxes levied on corporations and individuals like Buffet are taxes on investment profits—investment profits that come from corporations or individuals after they’ve already paid their income tax on either their salary or the ‘regular’ company operating profits. In other words, capital gains taxes are double taxes—taxes on profits made by investments from money that has already been taxed.

I think it’s safe to assume that President Obama knows this. It’s also safe to say that the 1%/Occupy crowd does not know this and that group is a key Obama voting constituency. The 1%/Occupiers include every major Democratic/minority/Green/anti-war voting bloc there is, and the ever-sympathetic liberal MSM is only too happy to oblige and not set the record straight.

But what of the strategy to simply tax the rich? Why won’t that work, as policy? Aside from the inescapable factual/mathematical conclusion that no amount of taxation will eliminate—or even meaningfully close—our budget deficit crisis, what the President does not seem to understand is the concept of elasticity. He seems to regard the “rich” and the “corporations” as static, immoveable, ever-constant objects, whose income is permanent and there to be taxed to whatever degree the Government wishes. He and his advisors apparently think the “rich’s” income is inelastic—i.e., not subject to change in changing circumstances.

It’s not.

It’s very elastic. That income will shift and move and disappear the more the Government tries to go after it. Corporations will shift more and more of their profit-producing operations to locales beyond the reach of U.S. income tax laws. Wealthy individuals will find more and more tax havens and loopholes to avoid payment. Many individuals and/or companies will simply retire or close up shop, weary of the chase, and then that fat, juicy taxable income—so tantalizingly close—evaporates into nothingness.

This is the folly of punitive taxation, when done primarily for vote-glomming reasons of appearing to be “fair.” It reduces the net tax take and hurts the economy. Because what is the economy that everyone purports to be so concerned about actually comprised of? What’s it made of?

It’s made of one thing and one thing only: The economy is made up of businesses. Businesses. As in places where people work and get paid for producing something—goods, services, whatever— of value. It makes no sense to try to grow an economy by being anti-business. It just can’t be done.

And we’re living through the proof.

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