Obama’s Misplaced Faith in Fairness Only Reinforces Inequity

Fairness is a crucial part of President Obama’s worldview. The notion has also had an enormous impact on his policy choices.

Take for instance, some of the speeches he has given while on the campaign trail and as President:

  • “Those kinds of progressive tax steps, while closing loopholes and rolling back the Bush tax cuts to the top 1 percent, simply restores some fairness and a sense that we’re all in this together.”
  • “We talk about welfare and we talk about poverty, but what people really want is fairness. They want people paying their fair share of taxes. They want that money allocated fairly.” 2007 Democratic Primary Debate at Howard University Jun 28, 2007
  • “These steps are all paid for, and designed to restore balance and fairness to the American economy after years of Bush Administration policies that tilted the playing field in favor of the wealthy and the well-connected.” Speech in Flint, MI, in Change We Can Believe In, p.244 Jun 15, 2008

These policy positions can be summed up by an off-the-cuff remark that President Obama made to Joe the Plumber,

It’s not that I want to punish your success; I just want to make sure that everybody who is behind you that they’ve got a chance to success, too. I think when you spread the wealth around, it’s good for everybody.

In making such statements President Obama seems to be ignoring a fundamental question – does penalizing the wealthy really lead to a fairer system? During the Presidential debates Charlie Gibson questioned him about his plan to raises taxes on capital gains from 15 percent to 28 percent. Gibson pointed out that in each instance in which the rate was lowered the governmental revenues from the tax actually increased. This didn’t matter to Obama. His response remained the same,

“Well, Charlie, what I’ve said is that I would look at raising the capital gains tax for purposes of fairness.”

That hard and fast rules leaves no room for variables. Fairness, apparently, outweighs all. Increased tax revenues? Doesn’t matter. Less government debt? Meh. More investment being pumped into the economy? No consequence.

The problem with this dogmatic view is that it overlooks how certain tax policies actually take away from fairness. Wealth in America is not a zero sum game. The upper tier of taxpayers can grow their riches while the middle class simultaneously makes income gains. In fact, that is the way it should be. What is a zero sum game is money. When the government takes a dollar away from private sector investors, through tax increases or government debt, that is a dollar they can’t invest in entrepreneurs or capital improvements.

Less capital investment and fewer entrepreneurs sets off a chain of events that inevitably lead to less profits, fewer jobs, and a relatively depressed economy. The people that we were trying to be “fair” to are the ones left out in the cold. Unfortunately, this traps us in a downward spiral. To ensure fairness to the less well off, i.e., the people who suffer from the reduced amount of jobs, the President passes programs such as healthcare reform, extensions of unemployment benefits, and other social programs that must be paid for out of taxes. The higher taxes must be paid for primarily out of the pockets of the wealthy, thus restarting the cycle of reduced investment and entrepreneurship that got us into this mess in the first place.

The fairness Obama should be talking about, but isn’t, is equality of opportunity, not equality of results. This doesn’t require any game rigging, redistribution, or penalizing of those who succeeded. When you do these things, even in the name of fairness, you’ll be left disappointed by the unfair results.

by Brandon Greife, Political Director of the College Republican National Committee