Rich Lowry wrote a great commentary on Democrats who themselves become filthy rich using the same tax code that Mitt Romney uses, even while they demonize those that do. It is a laugh. I mean are we to believe that Barack Obama with all his book royalties, isn’t filthy rich? And that his tax accountants aren’t right now exploiting the same Congressionally-crafted tax loopholes as any other wealthy American would?

For that matter, I recall in 2004 two of the most brazen and wealthy Americans — John Edwards and John “Heinz Ketchup” Kerry — running on the Democrat ticket. Where was the outrage then?

Here’s Lowry:

Stephanie Cutter, an adviser to the Obama reelection campaign, wrote a scathing memo the other day about Mitt Romney’s experience at Bain Capital, subtitled “Profit at Any Cost.”

Cutter sounded like a sworn enemy of private equity. Except a few years ago, she was a spokeswoman for J.C. Flowers, a private-equity firm. Why do work for J.C. Flowers when there are so many other worthy ventures needing communications help that don’t make insane amounts of money and pay incredibly well?

Presumably Cutter wanted to be as well compensated as possible, by J.C. Flowers and the “several Fortune 500 companies” her communications firm served, according to her bio. This is utterly unremarkable but for the fact that she is part of an Obama team that argues there is something inherently wrong with income inequality. In his signature Osawatomie, Kan., speech, President Barack Obama asserted that rising inequality hampers those at the bottom. If that’s so, shouldn’t the people around him endeavor to keep from adding to the injustice by making too much money?

But none of them goes out and gets poor. Very few of them, it seems, even go out and get middle-class. They get rich. Many of them climb right into the 1 percent. Obama economic adviser Alan Krueger gave a speech recently lamenting the shrinking middle class, without mentioning that the reason for its diminishment is that so many people have risen all the way out of the middle. By Krueger’s (perverse) standard, major Obama officials have heedlessly contributed to the destruction of the American middle class by earning too much.

Consider only the chiefs of staff. President Obama’s new chief of staff, Jacob Lew, made $1.1 million in one year working for Citigroup. His prior chief of staff, William Daley, made $8.7 million in roughly one year working for JPMorgan Chase. His original chief of staff, Rahm Emanuel, made $16 million working for an investment firm. Judging by this record, President Obama only feels comfortable entrusting his affairs to men who have earned outrageous paydays.

The Obama 1 percenters abound. President Obama’s first national economic director, Larry Summers, earned $600,000 as president of Harvard, then went to a hedge fund where he made $5 million in one year, before joining the administration. His first budget director, Peter Orszag, left to make $2 million to $3 million a year at Citigroup. His current national-security adviser, Tom Donilon, got $7 million from his work at Fannie Mae from 2000 to 2003.

Certainly Obama’s top aides don’t have to make millions in finance, but they’d almost have to go out of their way not to get rich. In the aggregate, they are smart, highly educated, and hard-working. They tend to marry people with the same characteristics. They have relatively stable families. They have success — indeed, the 1 percent — written all over them. They probably would be scandalized to work at a private-sector job paying “only” $50,000, the median household income in the U.S.

In a report that has the tone of a revelation about it, the New York Times discovered that the 1 percent is a “varied group, one that includes podiatrists and actuaries, executives and entrepreneurs, the self-made and the silver spoon set.” By one estimate, the 1 percent starts at households making $380,000 a year. That means in 2005, Michelle Obama alone was almost making enough to hoist the Obama household into the dreaded 1 percent with her $316,962 job at the University of Chicago Hospital.

Is it too much to ask that one high-profile Obama official leave government and refuse to make more than $70,000 a year out of solidarity with the middle class and commitment to income equality? Of course it is. Just as the definition of a recession is when someone else loses a job, greed is when someone else makes a lot of money. For anyone hoping to get to the top, the collective message of current and former Obama officials should be clear: Do as they do, not as they say.

Here’s a great commentary by Jonah Goldberg (from his G-file e-letter) on the OWS movement:

As I mentioned in the Corner, I love this story about the fraying tensions among the Occupy Wall Street crowd.

Aside from the general schadenfreudtasticness of it all, I found this bit to contain some fascinating contradictions. Apparently some of the “facilitators” — you might call them the avant-garde of the avant-garde of the avant-garde of the lumpenproletariat — have started censoring and taxing the drummers.

To Shane Engelerdt, a 19-year-old from Jersey City and self-described former “head drummer,” this amounted to a Jacobinic betrayal. “They are becoming the government we’re trying to protest,” he said. “They didn’t even give the drummers a say. . . . Drumming is the heartbeat of this movement. Look around: This is dead, you need a pulse to keep something alive.”

The drummers claim that the finance working group even levied a percussion tax of sorts, taking up to half of the $150-300 a day that the drum circle was receiving in tips. “Now they have over $500,000 from all sorts of places,” said Engelerdt. “We’re like, what’s going on here? They’re like the banks we’re protesting.”

Wait a second. The leadership of OWS is imposing a 50 percent tax rate on the most successful and entrepreneurial protesters and they’re regulating their ability to satisfy the consumer (as it were)?

This Engelerdt guy’s grasp of political theory is a bit off, though. First he says that the organizers are becoming the sort of government they’re protesting. Except that has it exactly wrong. They’re becoming the sort of government they’re demanding!

He then goes on to say that the decision to confiscate so much of the drummers’ obscene profits makes the organizers like the banks. But the banks don’t tax anybody — that’s government’s job. In fact, if these guys had their way, the drummers should be taxed at a much higher rate, right? Why should the drummers make so much more than the guy running the seminar on how to make hemp-twine condoms or the lady teaching folks how to recycle everything from urine to toilet paper?

Beyond the Occupy Wall Street crowd playing the part of the “useful idiots” of organized socialist, national socialist (i.e., Nazi)  and communist parties, you’ve got a massive number of economically-ignorant, naive or at minimum mis-educated youths who seem unaware that they’re protesting the wrong street: Instead of occupying Wall Street they should be occupying K-street, or better yet, the Independence, First, and Constitution streets that surround the Capital building.

[Bloomberg] Federal employees whose compensation averages more than $126,000 and the nation’s greatest concentration of lawyers helped Washington edge out San Jose as the wealthiest U.S. metropolitan area, government data show.

The U.S. capital has swapped top spots with Silicon Valley, according to recent Census Bureau figures, with the typical household in the Washington metro area earning $84,523 last year. The national median income for 2010 was $50,046.

The figures demonstrate how the nation’s political and financial classes are prospering as the economy struggles with unemployment above 9 percent and thousands of Americans protest in the streets against income disparity, said Kevin Zeese, director of Prosperity Agenda, a Baltimore-based advocacy group trying to narrow the divide between rich and poor.

“There’s a gap that’s isolating Washington from the reality of the rest of the country,” Zeese said. “They just get more and more out of touch.”

Total compensation for federal workers, including health care and other benefits, last year averaged $126,369, compared with $122,697 in 2009, according to Bloomberg News calculations of Commerce Department data. There were 170,467 federal employees in the District of Columbia as of June.

That’s right. People working for the federal government make more money than those who actually produce things, be they in Silicon Valley, New York City, Atlanta or B.F. Idaho. And why is that? Well as Tina Korbe points out the Beltway “boasts one lawyer for every 12 city residents” — that’s a lot of “fat cats” to grease the palms of your slimy senator or representative in turn for tax dollars and fabricated “shovel ready” phantom jobs required to sort through phone-book sized regulatory bills.

The Bloomberg report continues:

Lobbyists play a prominent role in the Washington economy. In 2010 there were 12,964 registered lobbyists, with most working in or around the nation’s capital, according to figures compiled by the Center for Responsive Politics, a Washington- based research group that tracks political spending. Spending on lobbying efforts reached a record $3.51 billion last year, up from $3.49 billion in 2009.

Ironically, while President Barack Obama and Democrats have been expressing solidarity with this confused lot of Marxists, they’re well entrenched in the Lobby enterprise.

This week the Washington Post reported that “President Obama has still managed to raise far more money this year from the financial and banking sector than Mitt Romney or any other Republican presidential candidate, according to new fundraising data. … Obama has brought in more money from employees of banks, hedge funds and other financial service companies than all of the GOP candidates combined, according to a Washington Post analysis of contribution data.”

The Democrats are against lobbying and big banking… except when they’re for it.

WSJ:

After Congress created the Consumer Financial Protection Bureau as part of Dodd-Frank, President Obama said the government would prevent “hidden penalties and fees” and ensure “clear and concise information.” He promised banks that “unless your business model depends on cutting corners or bilking your customers, you’ve got nothing to fear from reform.”

Flash forward to today, and the full weight of Mr. Obama’s Washington is coming down on a bank for making perhaps the most transparent pricing change in the history of American finance. Is there any consumer who hasn’t heard that Bank of America will start charging a $5 monthly fee on debit cards? Could there be a simpler communication to allow consumers to consider other debit cards or other payment options?

For doing exactly what President Obama claimed that he wanted, the bank was rewarded by the President with an assault on national television. Mr. Obama told ABC television that the proposed fee “is exactly why we need this consumer finance protection bureau that we set up that is ready to go.”

When ABC host George Stephanopoulos asked if the fee could be stopped, Mr. Obama replied, “Well, you can stop it because it—if you—if you say to the banks, ‘You don’t have some inherent right just to, you know, get a certain amount of profit if your customers are being mistreated.’”

Mr. Durbin, incensed at the results of his plan to transfer wealth from banks to retailers, has been urging customers to close their accounts at Bank of America. Reasonable people can disagree about which politician is more economically irresponsible—the President who wants bureaucrats to dictate profit margins or the Senator who encourages a run on a bank.

Exactly. How did the Democrats expect the banking world to react to government price controls that cut their debit-card profits in half?

In any event, one should beware this new Consumer Financial Protection Bureau (CFPB) — because a group of un-elected, unaccountable bureaucrats are now with us forever. Their actions have already created unintended disincentives that diminish consumer purchasing power and create fewer customer choices. It starts with debit. But one day they’ll move on to credit-card, prepaid cards, and so on.

WSJ:

All of the details weren’t clear in media reports as we went to press, but it seems Mr. Reid’s surtax would raise tax rates on millionaires by five percentage points starting January 1, 2012, or less than four months from now. That’s a year earlier than the tax increases that Mr. Obama is proposing. So much for the President’s promise that “nobody is talking about raising taxes right now.”

How this would stimulate a sluggish economy even under Keynesian economic theory is a mystery, unless you believe like Democrats apparently do that tax rates don’t matter to economic growth.

We doubt that’s how millions of small business owners will feel if they start paying a top marginal rate on their income—which they report through the individual tax code as Subchapter S companies—of 40%. That would rise to nearly 46% in 2013 under Mr. Obama’s other tax proposals (including deduction phaseouts), plus another 3.8% under ObamaCare’s tax increases on investment and payroll income. So Uncle Harry would take nearly 50% of everything they make. Who wouldn’t want to run out and hire more workers with that incentive?

Paraphrasing President Obama, one job of the U.S. Treasury Department’s Consumer Financial Protection Bureau is to determine if a business is making ‘too much profit.’ Mr. Obama is correct in his assessment that nobody is entitled to “a certain amount of profit,” but where he runs frighteningly amok is taking that assessment to mean that government should be the decider, rather than the American consumer.

Mr. Obama’s statement is quite telling, and scary too: Recall the former Soviet Union leaders used to brag that they suffered no bankruptcies in the USSR — the reason being that one can never have a bankruptcy if there is no private property, or private ownership of business. The president told us in 2008 that his wish was to “fundamentally transform America.” Judging by his words below, he wasn’t kidding. And he wonders why so many Americans fear him, and think he’s a socialist or communist?

President Obama joined fellow Democrats in blasting a new fee on debit card users announced by Bank of America, arguing that banks do not have an “inherent right” to a certain amount of profits.

The bank has come under a hail of criticism after it announced it would begin charging debit card users $5 a month, blaming the move on policymakers who curbed the amount of fees they could collect from retailers.

“You don’t have some inherent right just to get a certain amount of profit if your customers are being mistreated,” he said in an interview with ABC News. “My hope is that you’re going to see a bunch of the banks saying to themselves, ‘You know what, this is not good business practices.’”

“This is exactly why we need this [CFPB - Treasury Deparment's Consumer Financial Protection Bureau],” the president said. “We need somebody whose sole job it is to prevent stuff like this.”

Prevent stuff like what? Making a profit? Wouldn’t merchants (the banks’ customers) best determine if they’re being gouged or not rather than an unelected and unaccountable group of bureaucrats in the U.S. Treasury department? Wouldn’t consumers best decide, rather than some government bureau, if they would prefer credit cards or prepaid cards?

As Jonah Goldberg pointed out recently, here’s how government grows: It (1) either creates a real problem or invents a mythical one, then (2) proposes and enacts a “solution” to that problem. (3) Repeat steps 1 & 2.

So in this case the Democrat Congress, under the Durbin Amendment, invented the problem — that the economy was harmed by debit card fees that were too high for merchants — then enacted the solution, the Durbin Amendment, which by government fiat cut in half banks’ debit profitability, telling them that they could only charge 24 cents per debit transaction (from 44 cents).

This “solution” to an imaginary “problem” was typical liberally-activist government arrogance stemming from a belief that its “experts” could devise better economic engineering than that of 300 million consumers acting collectively.

It also smacks of hypocrisy in the form of propping up one kind of crony corporatism (bowing to the retail lobby) even as they demonize another (banking).

Here’s how the Democrat’s “solution” will affect you: less consumer choices — not just Bank of America, but the rest, like Wells Fargo, CitiGroup, Regions, and Morgan Chase, for starters, are now eliminating free checking and charging annual fees for debit-card holders, as well as eliminating many points programs.

According to CNN, “Your debit card may soon be denied for purchases greater than $100 — or even as little as $50.”

Hey, but thank heavens the government is “protecting us.”

Even worse, Mr. Obama must hate poor people. Without free checking, many poor Americans will be forced into costly high-percentage paycheck-cashers and money lenders. (Hello Amscot!)

Worst of all, the Durbin Amendment is a jobs killer: According to Portfolio.com, “the majority of startups and entrepreneurs often use their personal accounts as the initial run of funding. They count on the perks they can collect as ways to reward their staffs, especially when they can’t always afford the high-flying salaries of the past.”

Sorry, small business!

This is especially true for the smaller banks and credit unions that cannot absorb the financial loss:

The most noticeable change will likely be the closure of bank branches, reversing a decade-long growth. Branches today serve as customer-recruitment centers, as customers, once enrolled, do much of their banking electronically, by ATM or online. By making many new customers unprofitable, however, the Durbin amendment eliminates the incentive to compete by offering more branches.

Citing the negative impact of the Durbin amendment and other regulations on customer profitability, Texas-based IBC bank recently announced its decision to close 55 supermarket-based branches, eliminating 500 jobs, rather than increasing banking fees. Other banks will inevitably follow suit.

Conceived of as a narrow special-interest giveaway to large retailers, the Durbin amendment will have long-term consequences for the consumer banking system. Wealthier consumers will be able to avoid the pinch of higher banking fees by increasing their use of credit cards. Many low-income consumers will not. Banking will become less innovative and consumer-friendly.

No word yet from President Obama if large chain retailers will next be investigated by the CFPB for earning “a certain amount of profit.”

Yesterday I wrote a post on the number of ways President Obama’s proposed “Buffet tax” — which is based on the faulty and context-lacking premise that Warren Buffet’s secretary suffers a higher tax bracket than Mr. Buffet — was nothing more than a bait-and-switch gambit designed to invoke class warfare at a time when his approval rating is at an all-time low.

Well, as more time passes we find evidence that some of his typical defenders, fellow Democrats and mainstream media outlets, are also calling him out on the ridiculous notion. Ridiculous because while one can contend there may be extreme examples where this scenario occurs, it is hardly evidence upon which to base a tax code change.

[WSJ] Even New York’s Chuck Schumer, of all unlikely partisans, has objections—notably to Mr. Obama’s plan to allow the Bush tax cuts to expire on taxpayers earning more than $200,000 (or $250,000 for married couples): “$250,000 makes you really rich in Mississippi, but it doesn’t make you rich at all in New York, and there ought to be some kind of scale based on the cost of living on how much you pay.”

Mr. Schumer didn’t mention that one reason for the cost-of-living differential is the Empire State’s own sky-high taxes, but the important political point is that the Democratic Party’s chief Wall Street fund-raiser is tacitly acknowledging that raising taxes on the not-so-rich isn’t popular.

Other Senate Democrats don’t like the President’s basic priorities. “Tax increases have to come second to cutting [spending],” said Ben Nelson of Nebraska, perhaps the most vulnerable Democrat up for re-election next year. “I was just home over the weekend and that’s what [my constituents] were all talking about.”

… Not all of the objecting Democrats are concerned about their own re-election. Virginia’s Jim Webb, who is retiring, called the President’s tax proposals “terrible,” adding: “We shouldn’t increase taxes on ordinary income. . . . There are other ways to get there.”

It gets worse for Mr. Obama, as the Associated Press details in their video above. After all, President Obama has with rare exception always been able to count on it and other mainstream media outlets to defend his positions, deflect criticism and counter arguments with tried and true non-sequiturs.

The 10% of households with the highest incomes pay more than half of all federal taxes. They pay more than 70% of federal income taxes, according to the Congressional Budget Office.

There may be individual millionaires who pay taxes at rates lower than middle-income workers. In 2009, 1,470 households filed tax returns with incomes above $1 million yet paid no federal income tax, according to the Internal Revenue Service. But that’s less than 1% of the nearly 237,000 returns with incomes above $1 million.

This year, households making more than $1 million will pay an average 29.1% of their income in federal taxes, including income taxes, payroll taxes and other taxes, according to the Tax Policy Center, a Washington think tank. Households making between $50,000 and $75,000 will pay an average of 15% of their income in federal taxes. Lower-income households will pay less. For example, households making between $40,000 and $50,000 will pay an average of 12.5% of their income in federal taxes. Households making between $20,000 and $30,000 will pay 5.7%.

So, because there are 1,400 filers who earn income solely from means other than income-taxed salary, the Obama Democrats think we should craft a whole new tax bracket for people “making more than $1 million”? That’s asinine. The Alternative Minimum Tax (AMT) was supposed to do just that, but in 40 years has expanded thanks to inflation to affecting at least 4 million people earning far less than $1 million annually.

And going back to prove the point that this is indeed class warfare, it needs to be reiterated that the amount of money the Treasury stands to gain from such a “millionaire tax” is miniscule, in part because the number of millionaires is drastically shrinking. The more Obama’s economic policy saps the country, the less wealthy there are to tax!

[WSJ] In 2007, 390,000 tax filers reported adjusted gross income of $1 million or more and paid $309 billion in taxes. In 2009, there were only 237,000 such filers, a decline of 39%. Almost four of 10 millionaires vanished in two years, and the total taxes they paid in 2009 declined to $178 billion, a drop of 42%.

As I’ve argued many a time on this webpage, liberal Democrats love to demonize the rich, citing examples of Warren Buffet or George Soros, but while their words paint a picture of the elite wealthy, in reality their tax code aims far, far lower — at the Middle Class.

Consider when Democrats use the term’s top X percent:

Of the top 1 percent of income earners, only 23 percent are millionaires. A household income above $380,000 puts you in the top 1 percent of income earners. Of the top 10 percent of income earners, only 2 percent are millionaires.

A household income above $114,000 puts you in the top 10 percent of income earners. That means that a cop making $60K married to a teacher making $60K make it into the top 10 percent.

That’s most of us, not Misters Buffet or Soros.

I’ve long said that the liberal super-rich elites like George Soros and Warren Buffet are disingenuous phonies. (Go ahead and add Barack Obama to that list).

Both supremely successful businessmen and investment bankers, they made his bones with the tax code we have, but now seek to further stifle other entrepreneurs who would seek to do the same.

A few weeks ago George Soros sat before Congress and urged higher regulations on the investment world. Shortly after that, however, Soros announced that his group was taking advantage of a Congressional loophole — or what he called in a letter to investors, “exception” — by restructuring his firm as a “family office” and return outside investors’ money in order to avoid the pain that comes with complying with new Frank-Dodd regulations.

But even worse is Warren Buffet — his influence is so great he attempts to craft tax policy with Obama Democrats.

Never mind that even as Buffet argues for paying more taxes he could cut a check to the U.S. Treasury to pay whatever extra he sees fit as “fair.” And never mind that, like Soros, Mr. Buffet lobbies for and takes advantage of tax breaks that benefit he and his fellow Berkshire Hathaway shareholders, such as was done in Berkshire’s recent investment in Bank of America.

The real charade involves a clever bait-and-switch upon those ignorant of tax policy. Consider that only one of the following statements is true:

1. Warren Buffet pays a lower capital gains tax rate than his secretary’s income tax rate.
2. Warren Buffet pays a lower tax rate than his secretary’s tax rate.
3. Warren Buffet pays a total tax amount that is less than his secretary’s total tax amount.

Statement 1 is the only truth. But it is only true because Mr. Buffet doesn’t earn his fortune from a salary, and hence isn’t taxed with an income tax (a max rate of 35%), such as his secretary. Rather, Buffet earns his fortune off of the buying and selling of stocks, which is taxed under capital gains (a max rate of 15%). It’s comparing apples to oranges. (Oh, and while we’re at it, since Mr. Buffet and his secretary get to craft tax policy de facto, shouldn’t the American public be privy to their tax records?)

Even if somehow Buffet paid a total tax pecentage (all taxes) less than his secretary, it’s just not the rule for the vast majority of high-income earners. Adds a WSJ analysis:

[According to IRS data] But nearly all millionaires still paid a rate that is more than twice the 8.9% average rate paid by those earning between $50,000 and $100,000, and more than three times the 7.2% average rate paid by those earning less than $50,000. The larger point is that the claim that CEOs are routinely paying lower tax rates than their secretaries is Omaha hokum.

What makes it all particularly slimy is how Mr. Buffet, like most expert liars, drapes himself in half-truths, in this case to take advantage of the public and to portray himself as the champion of the middle class. But even comparing his capital gain tax rate to his secretary’s income tax rate, it doesn’t hold water. It’s simply untrue:

What he doesn’t say is that much of his income was already taxed once as corporate income, which is assessed at a 35% rate (less deductions). The 15% levy on capital gains and dividends to individuals is thus a double tax that takes the overall tax rate on that corporate income closer to 45%.

Notice that Warren Buffet never said to raise his “capital gains tax rate” to be more than that of his secretary’s “income tax rate.” Nor did President Obama propose the same. Instead, the president defines his new “Buffet tax” to raise taxes on th0se “making more than $1 million a year.”

That could mean a great many things of course, but one suspects the president has no intention to touch capital gains so much as raise income taxes. He’s already detailed his plan to end the Bush tax cuts for those families make more than $250,000 — or as Obama calls them: “millionaires and billionaires.”

But it’s not class warfare, Mr. Obama promises. Yet if it’s not class warfare why bother at all?

Were the federal government to tax everyone making $1 million or more at 100%, they would only net $400 billion in revenue, which is 2.7% of the national debt, or just 11% of Obama’s 2011 budget, or enough to fund the government for a few months.

Meanwhile, the top 1% of wage earners already pay 38% of all federal income taxes while the bottom 50% paid only 3%. At what percent would Obama Democrats consider the top 1% taxed as “fair”?

And if it’s not class warfare then how is it that the gains won’t make a dent in the national debt or federal deficit?

According to the New York Times, the president’s plan to abolish the Bush tax cuts for those making more than $250,000 is expected to bring in merely $0.7 trillion over the next decade, or about 0.4 percent of Gross Domestic Product per year. As a comparison, the Congressional Budget Office estimates that the deficit over the same period is going to be $13 trillion, more than 6 percent of GDP per year.

While not many details are yet know, any tax on “making more than a million” could crush small businesses, because unlike investment bankers most small businesses are organized as such that they pay a personal income tax rate (this includes sole proprietorships, partnerships, s-type corporations and limited-liability companies [llc]).

In other words, Obama isn’t going to raise Warren Buffet’s taxes at all, rather he’s going to raise taxes on business.

And let’s say Obama does plan to raise the capital gains tax (which is the opposite of what President Clinton did to spur the economy) there’s every reason to believe that the rich will simply do what Soros and Buffet did above to reduce their tax bill, while those less savvy investors (i.e. the middle-class investors) would suffer.

Or, take Obama’s plan to eliminate taxation loopholes. While most would be all for this if it meant a truly fair tax policy (for example a flat tax, or elimination of the income tax in favor of a national sales tax) eliminating tax loopholes would not harm the George Soroses and Warren Buffets of the world — but it would definitely hurt the middle class:

[Washington Post] As President Obama and congressional Republicans argue over how to rewrite the U.S. tax code, the debate has revolved around “loopholes” for corporate jets and ending “carve-outs” for well-heeled special interests. But if the goal is debt reduction, that’s not where the money is.

Broad tax breaks granted to millions of families at all income levels dwarf the corporate giveaways. Over the past two years, largely because of these popular benefits in the federal income tax code, the government has reached a rare milestone in tax collection — it has given away nearly as much as it takes in.

The number of tax breaks has nearly doubled since the last major tax overhaul 25 years ago, with lawmakers adding new benefits for children, college tuition, retirement savings and investment. At the same time, some long-standing breaks have exploded in value, such as the deduction for mortgage interest and the tax-free treatment of health-insurance premiums paid by employers.

All told, federal taxpayers last year received $1.08 trillion in credits, deductions and other perks while paying $1.09 trillion in income taxes, according to government estimates.

Only about 8 percent of those benefits went to corporations. (The write-off for corporate jets equals about .03 percent of the total.) The bulk went to private households, primarily upper-middle-class families that Obama has vowed to protect from new taxes.

Finally, there’s every reason to believe that a “millionaire” tax today will simply hit the middle class many years from now, as has already happened with the 1960′s Alternative Minimum Tax (AMT), which while constructed for just 155 people, now affects 4.5 million American filers, and would affect another 20 million were it not for an annually passed Congressional bill to exclude them.

Any way you cut this, it’s tax warfare — tried and true for a president who spent $3,820,000,000,000 in 2011 alone, and is about to run for re-election with near 10% unemployment.

Here’s the best retort and thought of the week on what I call the entitlement-hooligan riots in the U.K.

Presumably, London-type riots would not last long in either Texas, or Arizona. — Adam Baldwin on twitter.

Indeed. Thank God for the Second Amendment. I say thank God rather than “Thank Jefferson” because even Jefferson would have understood that such a right is natural, bestowed by The Creator, or if you’re not religious at very least by virtue of having been born a human being. Contrast that with the grand Ponzi scheme, house-of-cards, and castle built on sand known as the Entitlement State, which you better believe is bestowed by consent of the government, rather than by the governed. Things legislated as exceptions and fractions have grown into behemoths as rule and whole. Even so, fully expect that as our 80-million-checks a month government grows amok such riots will no doubt begin here once those government dole checks end. That’s the trap of Socialism-lite — rather difficult to replug that genie once it’s out.

To combat the former Soviet Union, Ronald Reagan took the Sixties and Seventies notion of détente and turned it on it’s head into a policy of rollback. At the time it was called extremist, fantasy or dangerous. But this rollback was incremental, and certainly did not defeat the Soviet Union in a day, or even a week or in an election cycle.

The Tea Parties across the country, along with leadership from some Republicans like Paul Ryan, did just that with our own little cold war — began executing a policy of rollback. As in Reagan’s day, Democrats seek to equate those persons as fanatical (or even, as Vice President Joe Biden shamefully did today, as “terrorists,” or Dem Rep. Luis Gutierrez calling Republicans “arsonists” even as he votes in favor of the “arson” bill.)

On one side we have fiscal liberals seeking to ever expand the tax, spend and government growth policies of Woodrow Wilson, FDR, and LBJ. On the other we have a group of limited-government advocates who take the traditional view of Constitutional powers that our founders intended. (And yes, “war” is an allegory or metaphor, not meant as literal and it’s a cryin’ shame I need to add that caveat).

And yet this debt-ceiling battle is just one of many to come in this cold war.

Taken for what it is — a way to keep the conversation and debate rolling, a way to force the liberal intelligentsia to argue (and I think a weak and defeated argument at that) why Keynesian economics is best or even effective — years from now at the end of the long war conservatives may look back at this debt-ceiling deal and conclude it was the first battle in a victorious movement.

As The Weekly Standard noted, “Only 10 of the 87 GOP freshmen, the Tea Party core in Congress, voted “no” [to John Boehner’s original bill]. Credit the Tea Party, however, with creating the climate for cutting spending and the idea of using the debt limit as a vehicle for doing it. No Tea Party, no cuts, and a happy Obama.”

However, conversely, the debt deal is most certainly a short-term loss — if passed as amended by the Senate, it will be the largest debt-ceiling hike in history ($2,400,000,000,000, oh, and the previous record was also held by Obama); a major hit to defense spending; filled with illusionary “cuts” of “spending levels” rather than actual cuts to spending — that is, where because you spend less than you originally intended you call it a “cut” even though you actually spent; and any true spending cuts are ridiculously small — for example, the $900,000,000,000 in cuts occurs unevenly per year over 10 years, whereas the new spending of $900,000,000,000 is added to the budget all at once (only in the Beltway can you call this even Stephen). Put it this way, the $7,000,000,000 cut in fiscal 2011-2011 is what our federal government borrows every 37 hours.

In that light, this deal is crap.

But look at it this way — the objective is limited government and limited spending, and the only way to achieve that — and I mean only way — is to have the right fiscal conservatives win elections, especially this coming one. People are ticked off about the spending. Any opportunity to have a conversation on spending front-and-center in the media spotlight for as long as this one has lasted is a good thing. With Boehner’s bill, we get to have this same debt-ceiling fight again in six months. Combine that with almost 10 percent unemployment and stagnant GDP change and the Tea Party is literally controlling the atmosphere and subject matter of national politics.

I think Charles Krauthammer put it the best:

Look, I think if you’re a Republican, you have to look at the long game and the long view. This has been a tremendous success. The president in January gives a State of the Union address in which he talks about more spending on innovation, energy, all the pet stuff he believes in. Here we are nine months later — that sounds like it’s out of the Jurassic era. We are now in the debt era.

The whole idea of the Tea Party originally was to bring up – it was created by the stimulus and Obamacare in opposition to this huge expansion of government and debt. And what we’re talking about today — monopolizing all discussion is debt. That in and of itself is a victory. We are now in the debt era. It will be central to all political debates.

They’ve gotten quite a lot, a trillion dollars of cuts today. I’m also unhappy about the defense cuts. But you cannot govern out of one House.

If, given the terrible economic numbers that came out on Friday, the president has to defend this economy next year, he loses. The Republicans would have to run the worst campaign in history not to win. And then with control of the White House and the Senate and the House, you can make the changes you want.

I don’t know if the amended debt-ceiling limit deal will become law or not. I do know that right now those who believe in limited government and separation of powers have all the momentum. Don’t mess that up.