President Obama Highlights Flaws In Republican Tax Proposals

This afternoon, President Barack Obama addressed the GOP House Issues Conference in Baltimore.  After his introductory remarks, he took several questions from Republican lawmakers, including Rep. Mike Pence.  Pence asked the president if he would consider across-the-board tax cuts, as President John F. Kennedy had done.

In his response, Obama noted that while he would look at more proposals to cut taxes, the idea of across-the-board tax cuts was far too simplistic and that he would have to consider current tax formulations in determining how best to proceed.  It should be pointed out that when President Kennedy was in office, the highest tax rate was cut from 91% to 77%.  In comparison, the current top rate is 35%.

Here is the transcript from the Washington Post:

Pence: Mr. President, would -- will you consider supporting across-the-board tax relief, as President Kennedy did?

Obama: Here's what I'm going to do, Mike: What I'm going to do is I'm going to take a look at what you guys are proposing.  And the reason -- the reason I say this, you know, before you say OK, I think it is -- I think is important to note, you know, what you may consider across-the-board tax cuts could be, for example, greater tax cuts for people who are making a billion dollars. I may not agree to a tax cut for Warren Buffett. You may be calling for a (sic) across-the-board tax cut for the banking industry right now. I may not agree to that.

His reference to Warren Buffet, one of the wealthiest people in the world, makes a lot of sense.  In October, Buffet appeared before Senate Democrats and asked them to increase taxes on the very rich.  Buffet has made much of his fortune in trading securities, and because of how capital gains taxes are formulated, the multibillionaire pays roughly 16.5% on his income to taxes while his employees at Berkshire Hathaway who make between $33,000 and $85,000 pay 25%.

The president's response was noteworthy for another reason.  He pointed out to Pence that Republicans simultaneously demand tax cuts and a balanced budget, an equation that simply does not make sense and is nearly impossible to actualize. 

Obama: And -- this is the last point I'll make -- if you're calling for just across-the-board tax cuts and then, on the other hand, saying that we're somehow going to balance our budget, I'm going to want to take a look at your math and see how that -- how that works. Because the issue of deficit and debt is another area where there has been a tendency for some inconsistent statements.