President Obama's State Of The Union Speech - More Bad Math, More Deception

It is pretty obvious from the President's actions leading up to the state of the union speech, and his assertions within the speech, that rather than run on his record in office, which is a disaster in so many ways,he would rather devolve into class warfare, rich vs. poor, as a campaign strategy. Many personally find this brand of Chicago politics despicable, but given his failure in office, it may be the only way he can get reelected, set one group of Americans after another.

If the President and his supporters would do some simple math, it would become very clear that his numbers and strategy of taxing the rich will do nothing to solve the major economic and other issues facing this country. It is difficult to detemrine if the President is lying, ignorant, or just plan bad at math.

The following analyses try to decide whether it is lying, ignorant, or bad math skills that the President is guilty of. All of the following numbers and simple math calculations are based on official U.S. Federal government data from the official IRS website. The data is not from the Republicans, Fox News, Tea Party, social conservatives, neo conservatives, etc.

Let's start with the country's 2009 IRS tax data (2009 is the latest year this data is available for) and look at the following information:

- Those tax filers who earn between $200k and $500k a year pay Federal incomes taxes at a 19.5% rate.

- Those that earn between $500k and $1 million pay at a 24.2% rate.

- Those that earn between $1 million and $2 million pay at 25.5% rate.

- Those that earn between $2 million and $5 million at a 25.6% rate.

- Those that earn between $5 million and $10 million pay at a 25.2% rate.

- Those that earn over $10 million pay at a 22.4% rate.

- Those that earn less than $200k a year pay no more than 11.8% with the vast majority pay Fedral income taxes at a single digit rate.

What becomes very obvious is that as a tax filer makes more money/has higher income, the percentage of that income that is taken by the IRS grows substantially. By the time a tax payer gets to $200,000 in adjusted gross income on the IRS tables, that payer is paying almost 20% of their income to the Federal government. As Americans make more than $200,000, the percentage paid to the Feds continues to go up, on average, so that most people making over $500,000 are paying about 25% of their income to the Federal government.

By using Warren Buffet and his secretary as props in his politics, Obama tries to infer that all Americans making a lot of money in this country pay less as a percentage of their income than middle class and poorer Americans. As thed abvoe data shows, on average, this is ignorance, lying, or bad math skills. While there may be a few cases where rich Americans pay a low percentage in taxes, they are definitely exceptions, as the graph shows. To imply otherwise, is nothing more than deception.

In fact, about 58% of American tax filers pay less than 5% of their adjusted gross income in Federal income taxes. And about 90% pay less than 10% of their income in Federal income taxes. Thus, it is hard to believe the President when he portrays Buffet and his secretary as the rule rather than the exception when so many Americans pay so little in Federal income taxes.

But let's dive further into the IRS facts and you decide if the rich get such a free deal at the expense of the poor in this country:

Only .17% of tax filers in 2009 had adjusted gross income over a million dollars. Thus, it is hard to believe that taxing these few people more would alleviate the country's ills when there are so few of them (only about 237,000 out of 140,000,000 tax filers).

These .17% of earners account for 9.5% of the IRS adjusted gross income totals but pay 20.5% of all Federal income taxes listed on the 2009 IRS tables.

The Federal income tax rate of these earners in total is about 24.4%, compared to the 90% of filers who pay less than 10%.

If we redefine rich as those Americans with adjusted gross incomes of more than $200,000, we find that these earners account for only 2.8% of all American tax returns.

They also account for only 17.1% of the country's income but pay 50.2% of the country's Federal income taxes.

Thus, it is very obvious that Obama's tax the rich/fairness approach to politics is totally out of touch with reality. The vast number of people in this country that make a lot of money, also pay a lot of that money in Federal income taxes on both an absolute basis and a percentage basis. Warren Buffet and his secretary are misleading props, the IRS tax tables are the real thing.

But let's get a little crazy with the math. Let's assume that Obama was able to tax those earning over a million dollars at 100%, i.e. he could confiscate all of their earnings and redistribute the money to everyone else. That would result in all non-millionaire earners getting about $3,917. But he could only do that for a year or so since who would bother going to work and earning over a million dollars if Obama was just going to seize all of it?

If that happened, within a year or so every non-millionaire earner would have to pay additional Federal income taxes of $5,283 a year since those non-millionaire earners would now have to cover the taxes that used to be paid by millionaire taxes. Not a good deal.

Let's idle back the math. Rather than confiscating 100% of the millionaire earners income, let's assume Obama only confiscated 10% more of it. Thus, every non-millionaire earner would receive $392 a year if that 10% was equally distributed or about $1.80 a day. Hardly worth the effort.

The problem with this approach to taxing the rich class warfare is that it does not solve the major problem facing the country: the Federal government is spending and wasting far more money than taxing the rich can ever cover. The Federal deficit in 2011 was about $1.6 TRILLION.

If Obama confiscated all of the millionaire earnings, assuming that 2009 tax profiles were similar to 2011 tax profiles, the Federal government would have increased their revenue by about $549 billion. In other words, taking all of the earnings of Americans making more than a millions dollars a year in adjusted gross earnings would have covered only about a third of the spending deficit that Obama's administration runs up in one year.

Thus, taking less than 100% of millionaires' earning would cover even less than Obama's outrageous deficit spending. We have a spending issue and waste issue with the Federal government in this country, we do not have an under taxation problem.

Reputable sources estimate the Federal government bureaucracy loses over $500 billion a year to incompetence, fraud, and criminal activity in the Social Security, Medicare, Medicaid, unemployment benefits, food stamps, and tax evasion programs and areas of responsibility. Fixing these problems would go a lot further to solving the country's financial and other problems than raising taxes on .17% of the country's income earners.

But that would require the President to actually do some real work, to get into the detail's of governing, to do things that are impactful for the good of the country rather than trivial for the good of his political career. Governing should be more than ignorance, lying, and bad math skills which serve no real purpose other than class warfare for political gain.