Daily Archives: 27 July 2012

You Didn’t Build That

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Now President Obama has an ad out in which he tries to walk away from his earlier comments that business owners—especially small business owners—didn’t build their businesses, that they owed government for their success.

Now he’s insisting that what he was talking about was Big Government “investing” in education and training, roads and bridges, research and technology.  And more:

Somebody helped to create this unbelievable American system that we have that allowed you to thrive.

No.  Today’s successful schools are charter and other schools to which parents send their children by choice.  These schools are run by private businesses; they’re not government organs, as today’s public schools are.

Private enterprises built the roads and bridges; Big Government didn’t send in the Seabees or the Army Corps of Engineers to build our transportation network, or to maintain it, except in the direst of localized emergencies, like post-Katrina.  Even then, though, the government’s constructors have been adjuncts to the private construction companies.  It’s true that Big Government funded significant portions of those build-out and maintenance projects, but the Government’s “investment” was heavily inflated: the privately run construction companies were—and are—required to pay “prevailing” union wage rates; the companies are not allowed to bid competitively.

It was Xerox that built the Internet, for instance, not Government, as Obama claims, and Xerox built it so they could share internal data on internal computer networks more easily, not “so that all the companies could make money off the Internet.”

And that “unbelievable American system that we have?”  That’s our free market economy that private individuals, singly and in groups, built up since our inception as a nation.  Big Government had no role in that.  Little Government had the important role of staying out of the way of our private, free enterprise, only enforcing laws against cheating and the like.

As an aside, President Obama had a closing refrain in his “You Didn’t Build That” speech: Americans often work together to do things they can’t do, or do as efficiently, alone.  But who was he talking about in this “working together” of his?  Not Americans working together on their own initiative—forming companies or charitable organizations, for instance—oh, no.  Obama was talking about Big Government as the “together,” a Government that does things for us.  Not at all anything about Americans working together without government…help.

Fun Facts with Taxes

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Some of this is old hat, but it’s worth reviewing, and some of this is relatively new.  All courtesy of Ari Fleischer in a recent Wall Street Journal piece.

[T]he only group in America paying at least a “fair share” is the top 20%—people who make more than $74,000. For everyone else, the tax code is a bargain.

This figure shows the rest of that breakout—who earns and who pays:

Note that: 60% of the income-receiving population, those bottom 3 quintiles, are just that—receiving, while paying far less in taxes.

Additionally, the trend is toward greater concentration of tax payments into fewer earners—greater unfairness.  The CBO’s “The Distribution of Household Income and Federal Taxes, 2008 and 2009” report makes this plain.

In 1979, the top 20% made 44.9% of the nation’s income and paid 55.3% of all federal taxes.  By 2009, the top 20% had risen to 50.8% of the nation’s income while their share of federal taxes paid had risen further, to 67.9%.

That’s a 13% increase in income and a 23% increase in federal tax “share.”  Meanwhile,

In 1979, the bottom 20% paid 2.1% of the federal taxes.  In 2009, their share of taxes has shrunk to 0.3%.

In 1979, middle-income earners ($34,900 to $50,100) paid 13.6% of all federal taxes.  In 2009 they paid 9.4%.

Hmm….