You would think that with one of the weakest economic recoveries on record, President Barack Obama would be searching desperately for ways to promote economic growth. It is, after all, an election year. Most pundits and pollsters agree that it's the economy, stupid.
But instead, Obama used his State of the Union speech to rail on about fairness, inequality and redistribution. The Obama strategy is simple: Tax the rich, because they don't pay enough.
The problem is that they do pay enough. According to the Tax Foundation, Americans making $1 million or more pay a 25 percent average tax rate. People in the $50,000 to $100,000 income category -- call it the middle class -- pay 7 to 8 percent.
But no, Obama's one big idea in his Tuesday night speech was a 30 percent minimum tax on millionaires. This, by the way, is really a hike in the capital gains tax. And this Obama penalty is aimed squarely at his likely election opponent, Mitt Romney. Talk about taxing success. Talk about taxing growth.
The capital gains tax is the single most important economywide tax on wealth, risk taking and investment. It's a tax on seed corn. What a brilliant idea, Mr. President.
I remember the late Jack Kemp always saying you can't have successful capitalism without capital. But that wasn't in the president's State of the Union.
It's not as though the economy is prepared to take another tax hit. The fourth-quarter gross domestic product report adjusted for inflation came in at a mediocre 2.8 percent. Wall Street promptly sold off on the news.
And we're now 10 quarters into the tepid Obama recovery, with its average quarterly growth rate of 2.4 percent annually.
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