President Barack Obama is continuing in the legacy of Woodrow Wilson tonight in making a spectacle of the State of the Union: all style, no substance.
If news reports are accurate, tonight we hear more of the same. Again, Obama will bring back the so-called Buffett Rule, arguing that secretaries shouldn’t pay a higher tax rate than their bosses. He will leave out the reason for this apparent disparity: that the secretary’s salary is taxed at a different rate than the CEO’s or owner’s capital gains tax.
To drive the point home, the Obamas have also invited Warren Buffett’s secretary, Debbie Bosanek, and to make matters still more political, the Obamas have invited Steve Jobs’ widow. The now-deceased Jobs once warned Obama that if his administration continued to demonize business, he faced a one-term presidency. Obama apparently plans to use the reports in The New York Times and elsewhere to argue that iPhones ought to be built in America, not China. To continue his entreaty to Silicon Valley, Obama will make a mention of Mark Krieger, the founder of Instagram. Again, left out of his analysis is this: Perhaps if President Obama called for relaxing Sarbanes-Oxley rules, there would be even more of these companies, but it is doubtful that the jobs of the future will come from photography apps on phones.
As the guest list makes clear, which includes a woman allegedly saved from cancer by Obamacare (which hasn’t gone into effect yet), a student who took on $35,000 in college loans, and Mark Kelly, the husband of Gabrielle Giffords, among others. This isn’t a speech to the nation; this is a pep rally.
The State of the Union speech is now a media event and therefore the actual content of the speech plummets. The third president, Thomas Jefferson, discontinued the practice of delivering the address in person. It was, he argued, too kingly and unfit for a republic where the president was but the first among equals. Jefferson and every president until Woodrow Wilson delivered the address to a clerk who read it. Woodrow Wilson from whom Barack Obama draws much inspiration reinstated the practice, to much criticism.
The anti-Wilson, Calvin Coolidge, reinstated Jeffersonian practice, but became the first president to broadcast the speech via radio. It allowed him to connect directly with the American people.
Coolidge, who gave us the Roaring Twenties, has one of the most progressive tax policies around. By the time, he left 98% of Americans paid no income taxes at all. In 1920, those earning $100,000 or more paid 29.9% of the tax revenues. In 1929, that figure rose to 62.5%.
The lesson for Obama is clear. Grow the economy first and then talk about taxes. If we’re successful, we won’t have to increase taxes, but then the point of increasing taxes isn’t really to increase taxes, is it?