There are straw-man arguments, and then there are piles of straw.
Barack Obama’s characterization of conservatives’ attitude toward entrepreneurial success is among the latter.
Last Friday, Obama spoke on the subject of entrepreneurial success to swooning supporters in Roanoke, Virginia. This is what he had to say:
If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business — you didn’t build that. Somebody else made that happen.
Okay, so, what’s the point? Why the pressing need to humble successful Americans? What’s the public policy implication of determining who is really responsible for people’s successes? There must be a message in there somewhere.
Obama’s message is this: successful entrepreneurs don’t pay for anything. And more specifically, conservatives don’t want them to pay for anything.
Straw-man arguments at least sound like real arguments. They at least have two pseudo-legs on which to stand, however flimsy they may be. But this pile of straw makes Ray Bolger’s character in The Wizard of Oz look like the Incredible Hulk.
First, credit where credit is due: people do indeed rely on goods and services provided by others. Congratulations, Mr. President; you’ve completed your first economics lesson. That’s what an economy is — people doing things for each other in exchange for agreed compensation.
But Obama implies that the agreed compensation part doesn’t exist, at least when it comes to successful entrepreneurs. And he implies that conservatives want it that way. As shocking as it may sound to Obama and his supporters, successful people do pay for things. They pay the contractors who build their factories, they pay the engineers who design their machinery, and they even pay the people who make their lunch.
Tellingly, Obama doesn’t speak of the private individuals who have enabled successful people to thrive. To him, America’s ungrateful entrepreneurs’ only indebtedness is to the government. Does he think private entities are un- or under-compensated for their contributions? Who knows? He doesn’t seem to care about that. But by George, the rich won’t get away with not paying their share to the government. Not on his watch.
And that’s where the deception comes in. As part of his shtick, Obama proclaims that successful entrepreneurs would not have gotten where they are without all the roads, bridges, and teachers “somebody” paid for. True enough. But who’s the “somebody”? Do businesses and business owners not pay taxes? Are they not part of the “somebody”?
Obama’s choice of language is deliberate: it engenders the societal division and jealousy that are essential to his re-election. It’s politics of the worst sort — the “us versus them” sort. And all this is based on a false premise. The fact is that successful people do pay taxes in America. And they pay more than their fair share of them.
In our progressive tax system, the more money someone earns, the greater percentage of that income he or she pays in taxes (not just a greater amount, but a greater percentage). And if that income comes from corporate profits, it’s taxed twice: once at the corporate rate of 35% and once at the dividend or capital gains rate of 15%. And that’s just federal taxes.
Despite this, Obama leads his followers to believe that successful people have accumulated their wealth by taking advantage of others — and that conservatives want them exempted from the public responsibilities everyone else must meet. This is hogwash. But Obama’s cheering crowds in Roanoke and elsewhere believe it.
So far, the central strategy of Obama’s campaign has been to prey on an electorate that largely doesn’t understand our overly complicated tax code. He is convincing people that their economic woes are the result of others’ successes, and that others’ successes are the result of cheating the system. That is one of the most disingenuous and ruinous agendas a politician can promote, and so far, the Republicans are letting him do it.
If Mitt Romney is to win in November, he must take the initiative in defining himself and defining his conservative positions. If he does not, Barack Obama will surely do it for him.
Romney should take heed: piles of straw typically do not fare well in general elections.
Joseph Petros is an associate at the law firm of Warren and Young PLL in Ashtabula, Ohio. He is a graduate of the University of Notre Dame and the University of Notre Dame Law School, where he served as executive editor of the Notre Dame Journal of Law, Ethics & Public Policy.