The Independent Voice of Southern Methodist University Since 1915

The Daily Campus

The Daily Campus

The Independent Voice of Southern Methodist University Since 1915

The Daily Campus

The Independent Voice of Southern Methodist University Since 1915

The Daily Campus

SMU students gather around a bucket of markers to write an encouraging note to put in “Welcome to the Shelter” kits at event in mid-April on SMU’s campus.
Dallas homeless recovery center, The Bridge, is a home
Morgan Shiver, Contributor • June 20, 2024
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Obama’s unrealistic budget

Instead of campaigning on his record as president, Barack Obama is trying to make this election about income inequality and fairness. The American system, according to the president, allows only a privileged few to succeed, and the only way to fix this is to raise taxes on the rich and increase government spending.

The President’s State of the Union speech and his recently released 2013 budget have made it readily apparent that this idea is the centerpiece of his campaign. One of the main provisions of the president’s new budget is the so-called “Buffet-rule” for millionaires, making it so that high-earners always have to pay a rate of at least 30 percent on their income, even if their income comes from capital gains.

Even with this new revenue, the White House projects that the deficit will still be over $500 billion in 2016, even though one of Obama’s campaign promises was to halve the deficit by the end of his first term. He has failed at that spectacularly, producing four years of more than $1 trillion deficits. In truth, it is unlikely that the deficit in 2016 will be as low the White House projects, because in calculating tax revenues, the budget assumes a booming economy.

Unfortunately, the president seems unaware that doubling the tax rate on investment income, which is what the “Buffet-rule” does, will impede capital investment and reduce economic growth, leading to lower tax revenues and thus higher deficits.

He also doesn’t seem to understand that the new tax laws will adversely affect small businesses, which employ the vast majority of Americans. Small businesses and their owners file taxes as individuals, meaning that any profit is counted and taxed as their income. The president’s plan raises the income taxes of anyone making more than $250,000 a year. This category includes millions of small businesses, and coupled with the uncertainty surrounding Obamacare and other regulations, these tax increases will prevent them from hiring more workers.

The president’s budget is a joke and has zero chance of being passed. It is, however, his political wish list and a preview to what his priorities will be in his second term. Last summer, it seemed unlikely that Obama would get a second term, however, now it appears as if his Republican opponents are doing everything in their power to ensure that he does.

They are not running on their plan for America, they are running only on how bad Obama’s plans are. This is not enough. The Republicans have to have an alternative to Obama’s vision, especially because the president is likeable and able to make a compelling speech about “fairness.”

The Republican candidate cannot get caught up in the fairness argument. They will lose if they do. Democrats will always be better than Republicans at giving stuff to people.

Instead, the Republicans need to run a campaign on the message of growth. Tax reform, entitlement reform and the repeal of Obamacare, amongst other regulations, will unleash a tidal wave of cash that corporations have on hand, yet are currently reluctant to spend. Poll after poll has shown that small business owners are not hiring because of uncertainty regarding taxes, regulation and health care. Removing these uncertainties will create an environment much more suitable for entrepreneurs and small-business hiring.

Americans will accept fairness as the most important goal of government, if they are not offered an alternative. But, if they are given a choice between fairness and growth they will choose growth. This is because, at their core, Americans know that it is not government’s role to ensure that everyone succeeds. Europe tried, and it is now paying the price, and many European countries are now implementing conservative reforms.

Making the rich less rich is not the way to help the poor. An agenda that emphasizes growth-targeted policies will make everyone better off. This is a lesson America learned in the 1980s, and if the Republican nominee can make it the main point of his campaign, he will inspire people and have a better chance of winning.

Andrew is a sophomore majoring in finance, French and markets and culture. 

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