Obama’s American Jobs Act – Lies and Falsehoods

Falsehood #1

Warren Buffet does not pay less taxes than his secretary like Obama keeps preaching. Here’s what people don’t understand and Obama is misleading those who believe him; Warren Buffet pays Capital Gains tax. His secretary pays Federal Income tax. They are two very different things because they earn their money in two very different ways.

A capital gains tax (CGT) is a tax charged on capital gains, the profit realized on the sale of a non-inventory asset that was purchased at a lower price. The most common capital gains are realized from the sale of stocks, bonds, precious metals and property. Warren Buffet makes the vast majority of his money by selling and buying stocks. He pays taxes on the profits, or the difference in what he paid for the stock and what sold it for. This is not considered income. It’s called a capital gain and is taxed at a rate of 15%. Everyone pays 15% on capital gains, no matter how much money you make, or have made.

Buffet’s secretary is not buying and selling stocks, nor is she being paid in stock options. She is being paid by her employer, Warren Buffet. Therefore, she pays a Federal Income Tax. The current tax code is setup such that there are several tax brackets. The more you make, the more you pay in taxes. My guess is she probably makes a six digit salary, therefore, she probably pays around 30%.

Right now, Warren Buffet pays a lower tax rate than his secretary – an outrage he has asked us to fix.

What people don’t know, is that Warren Buffet pays himself a salary of about $100,000 a year, which can be taxed as income, just like his secretary. If Warren Buffet wanted to pay more in taxes, he would simply pay himself in the form of a higher salary instead of his capital gains income. But of course he doesn’t do this because he knows he would have to pay more in taxes. He therefore pays himself money in such a way that he’s subjected to the capital gains tax instead of the Federal Income tax. Warren Buffet is deliberately circumventing having to pay higher taxes. It’s the same reason why Steve Jobs paid himself a salary of $1 a year, claiming he would also sacrifice for the good of his employees. But what they didn’t tell you is the Steve Jobs was paying himself millions of dollars in stock options because they are taxed at 15% and not 30% like a federal income (Source: Wikipedia).

Therefore, Obama is misleading the people when he says Warren Buffet pays less in taxes than his secretary. He’s paying less in Federal Income because he pays himself very little in the form of a salary and instead pays himself with profits by selling and buying stocks.

Falsehood #2

In Obama’s speech, he pounds home the desire to have more jobs created in America and not overseas. I find this ironic. The person Obama appointed as the head of his jobs committee is Jeffery Immelt, CEO of General Electric.

That’s why I’ve brought together a Jobs Council of leaders from different industries who are developing a wide range of new ideas to help companies grow and create jobs.

… just not in America.

This year, GE decided to ship its 115-year old X-ray business from Wisconsin to China (Source: Bloomberg). In addition, over the last decade, GE has moved a large portion of its light bulb production to China (source: Huffington Post). Employment within this division of GE has decreased by about 68%, in which a large chunk have migrated overseas to China. In Ohio alone, about 15 of GE’s light bulb factories have been shut down since 1980.

If Obama were truly interested in creating jobs in America, he wouldn’t have appointed the CEO of General Electric to the position, who is responsible for shipping so many American jobs overseas to China.

Falsehood #3

Obama wants you to think he doesn’t engage in class warfare, yet he is constantly pitting the rich against the poor by saying the rich aren’t paying their fair share in taxes. Here are just a few quotes from his most recent speech:

Should we keep tax breaks for millionaires and billionaires? Or should we put teachers back to work so our kids can graduate ready for college and good jobs?

… rich vs kids.

While most people in this country struggle to make ends meet, a few of the most affluent citizens and corporations enjoy tax breaks and loopholes that nobody else gets.

… rich vs poor.

Falsehood #4

Federal Government investments don’t work. Sometimes, the technology just isn’t profitable or cannot be manufactured efficiently. This is evident with the “green jobs” incentive.

If we provide the right incentives and support – and if we make sure our trading partners play by the rules – we can be the ones to build everything from fuel-efficient cars to advanced bio-fuels to semiconductors that are sold all over the world.

Just recently, Solyndra Inc, who manufactures and sells solar panels filed chapter 11 bankruptcy. This after they received $535 million dollars in government stimulus grants and loans (Los Angeles Times). Investing more money into these industries and technologies that are not profitable will not help the economy. It will only hurt it by increasing the federal debt and creating a huge burden on future generations who have to pay back the failed stimulus spending.

Worse yet, a lot of the stimulus money for “green” jobs has gone overseas (Liberty News). For example, the largest grant made under the “green energy stimulus” thus far, a $178 million payment on Dec. 29, went to Babcock & Brown, a bankrupt Australian company that built a Texas wind farm using turbines made by a Japanese company.

Bottom line; If the private sector could make a profit by making these “green” products, they would do it! But they can’t, so they don’t. The government cannot continuously and forever pick companies and technologies it wants to invest money in.

Falsehood #5

Obama has appointed numerous czars to oversee various aspects of Federal agencies. In addition, he has allowed some agencies to create and implement various regulations with no congressional oversight or approval. So when he says …

So far, we’ve identified over 500 reforms, which will save billions of dollars over the next few years. We should have no more regulation than the health, safety, and security of the American people require. Every rule should meet that common sense test.

… he’s misleading you. He’s not interested in getting government out of the way. That’s what would happen if regulations were removed. Instead, he believes government is the answer. This is why he is continually passing stimulus and reform acts that create more laws and government oversight. This is why the EPA is passing more and more regulations. This is why he enacted a drilling moratorium. This is why he passed legislation that now states all student loans are 100% Federally controlled (Business Insider).

Falsehood #6

As much as Obama would like you to believe this wasn’t a campaign infomercial, it was. Don’t let him fool you. Within his speech, he repeats 17 times that congress should just pass the bill.

That was a really poor display of leadership. Just “pass it” because I say so. What’s funny is, Harry Reid has allowed Congress a one week break before getting to this jobs bill and when they return, the bill won’t even be their top priority. He says there are other more important bills they need to work on. This tells you only one thing; this bill Obama wrote is so toxic, not even Harry Reid will touch it.

So again, it looks like Obama was doing nothing more than trying to sell the People a bad bill. A bill so bad, not even Harry Reid will put it up for a vote. A bill so bad, Harry Reid is treating it as if it’s a political hand grenade.

Leave a Comment