Obama's Going To "Soak The Rich"

Obama's Going To "Soak The Rich"

So why are rich people pouring money into his campaign? According to OpenSecrets.org, Obama has raised $340 million for his campaign. A breakdown by donor amount for individual contributors shows that the bulk of that money was in the category was $1000 and up--and a very large chunk was contributions of $2300 and up.

The $2300 and up group contributed a total of $68,735,311, from 26,194 contributors--or an average of $2624 each. In the $4600 and up group, the average contribution is $4702.

Pretty obviously, someone who gives this kind of money to a political campaign is pretty well off. I notice a number of the $5000 contributions are from people that list their occupation as "homemaker." I believe the correct term is "independently wealthy."--like Warren Buffett, the billionaire who gave $4600 to the Obama campaign. And cheapskate billionaire George Soros, who only gave $2100 to the Obama campaign.

So with all the rhetoric from Obama about raising taxes, why are rich people funding his campaign? For the same reason that billionaires and the independently wealthy have, at least throughout my lifetime, heavily funded "soak the rich" leftists: the "rich" people that they are going to soak aren't rich at all. (And this isn't new. When I was reading about socialist communes in Los Angeles in the 1900-1920 era, it was not surprising to find that millionaires funded these political activities. Similarly, the Bolsheviks raised at least some of their money in Czarist Russia by marrying into the aristocracy. Lenin, for example, was part of the minor aristocracy.)

Raising income taxes has only a limited impact on the wealthy people that fund the Democratic Party. If you have $5 million in net assets, income taxes are purely voluntary. If you buy municipal bonds of your state of residence, the interest on them is exempt from federal and state income tax. Right now, interest rates are down, and if you were buying munis, you probably would only get about a 4% return. If you are one of the poor Democratic fat cats, your $5 million will only return you $200,000 a year in tax-free income--why, you might have to wash your own dishes with that little money. (And of course, if you are a more average Democratic fat cat, with $100 million in net assets, you have to live on a miserable $4 million a year in tax-free interest.)

So what does raising income taxes on families that make $100,000 a year do? It prevents people that are not yet rich from becoming so. And that's why Democrats talk about how the rich people get away with so much--but never propose taxing assets--only income. Because if they talked about taxing assets, most of their campaign contribution base would dry up. These are people that like to talk about helping the poor, but most of them don't believe it enough to give away their excess wealth, and have to live on a miserable $200,000 a year. It is so much easier to fund people like Obama who make sure that the rest of us won't get to that point.

This is one of the reasons that this country lurches back and forth between left and right. Republicans generally push for cutting income taxes, which allows some people to become obscenely rich. Once enough wealth accumulates that there are people who no longer have to work for a living, because they are obscenely rich, many of them shut off the opportunity for others to get that well off, by electing Democrats.