Spreading wealth, trapping poor

When you spread the wealth around, it's good for everybody."

Thus sayeth Barack Obama in 2008 when confronted by one Joseph Wurzelbacher, a plumber in business for himself.

The entire exchange went like this:

Joe the Plumber: "Your new tax plan is going to tax me more, isn't it? ... I've worked hard ... I work 10 to 12 hours a day and I'm buying this company and I'm going to continue working that way. I'm getting taxed more and more while fulfilling the American Dream."

Obama: "It's not that I want to punish your success. I want to make sure that everybody who is behind you, that they've got a chance for success, too. My attitude is that if the economy's good for folks from the bottom up, it's gonna be good for everybody. I think when you spread the wealth around, it's good for everybody."

Aside from pointing out that under Obama we're all worse off, not better off, it's important to note that underneath the "chicken in every pot" rhetoric rests the president's redistribution plan, playing out in exactly the way Joe the Plumber feared. Successful hard workers get an added tax burden placed on their backs, while citizens less so are relieved of their fair financial obligation to the country.

It's producing an economic trap, not an economic ladder.

There's no better place to witness the decline (and it has been going on since before Obama became president) in honorable citizenship than the current debate over whether to extend the Bush tax cuts.

The president wants to extend the tax breaks, but only to lower- and middle-class families. Obama wants so-called "rich" families -- owners of small businesses -- to pay more.

Whatever happened to Obama's assurance to Joe the Plumber that he didn't want to "punish your success"?

I'll tell you what happened to it.

He never meant it.

The Associated Press reported that about 47 percent of all households paid no federal income tax this year. None. Their incomes were either too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability.

This is not good or sustainable. Over time, it creates a class of citizen encouraged to lift their feet and coast while "rich" citizens pedal harder. We all live in the greatest country in the world, and we all have a shot -- privileged or not -- to reap the benefits therein. (Paging President Obama for a case in point.)

We should therefore all have a financial stake -- even a small one -- in the community we call America. To do otherwise is not healthy or wise.

There's an economic parable that has been floating around for several years that hits this nail on the head. It's titled: "The tax system explained in beer." There are a number of variations, but here's the quick version:

"Ten men go out for beer, and the bill comes to $100.

"They paid their bill the way Americans pay taxes.

"The first four men (the poorest) paid nothing. The fifth, $1. The sixth, $3. The seventh, $7. The eighth, $12. The ninth, $18. The 10th (the richest) paid $59.

"One day, the owner threw them a curve ball. 'Since you are good customers, I'm reducing the cost of your daily beer by $20.'

"The group still wanted to pay their bill the way Americans pay taxes. So the first four men were unaffected. They drank for free. But what about the other six men? How could they divide the $20 windfall so that everyone would get his fair share?

"They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.

"So the bar owner suggested that it would be fair to reduce each man's bill by a higher percentage the poorer he was, to follow American tax principle.

"And so the fifth man, like the first four, now paid nothing (100 percent savings). The sixth now paid $2 instead of $3 (a savings of 33 percent). The seventh now paid $5 instead of $7 (28 percent savings). The eighth now paid $9 instead of $12 (25 percent savings). The ninth now paid $14 instead of $18 (22 percent savings). The 10th now paid $49 instead of $59 (16 percent savings).

"Each of the six was better off than before. And the first four continued to drink for free. But once outside the bar, the men began to compare their savings.

" 'I only got a dollar out of the $20 savings,' declared the sixth man. He pointed to the 10th man. 'But he got $10!'

" 'Yeah, that's right,' they all exclaimed, 'The wealthy get all the breaks. This new tax system exploits the poor!"

"The nine men surrounded the 10th and beat him up.

"The next night, the 10th man didn't show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered they didn't have enough money between all of them for even half of the bill."

I know supporters of the president discount this as stupid spam. But there's truth behind it. When you "spread the wealth around" in this way, you legitimize citizen freeloaders. And that is most definitely not "good for everybody."

Sherman Frederick (sfrederick@reviewjournal.com), former publisher of the Las Vegas Review-Journal, is a Stephens Media columnist.