July 9 2012
President's Solution: A Huge Tax Increase
The Washington Post has this headline:
Obama to Propose Tax-cut Extension for Middle Class Households
What this headline glosses over is that the president is actually calling for a tax hike on those making $250,000 or more. He is asking for an extension of the Bush tax cuts but only for those who make uder 250 K. It is interesting that Reps. Nancy Pelosi and Chuck Schumer have called for the extension to apply for everybody under a million a year. But the president seems to think he can make Republicans look bad if they try to get the tax cut extended for high-earners.
Keith Koffler of White House Dossier sums up what the president's tax hike does this way:
Obama’s plan will sock the country with a huge tax increase even as the economy continues to stagger.
It’s bad economics, but the Obama people have calculated that it’s good politics for a politician waging class warfare. Obama will be able to sock Republicans and Mitt Romney for backing tax cuts “for the rich” and “holding hostage” his populist proposal for a “middle class tax cut.”
This is distressing for so many reasons. It shows, for one thing, that President Obama has no idea of what is wrong with our economy and no inclination to learn. He is dominated by two drives: ideology and the goal of soaking the rich.
The problem with soaking the rich is that, if they have less money to invest or play with, there will be fewer jobs. So a war on capitalism and capitalists isn't good for anybody, except the ideologues.
There is another problem: we’re going to run out of rich people if we continue down our current path.
The Wall Street Journal reported last year:
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%.
Some of the missing millionaires were affected by the bad economy, while others—most recently, Denise Rich, Democratic financial backer and wife of Clinton pardon recipient Marc Rich—simply renounced their citizenship as the ultimate way to save on taxes. Either way, losing millionaires and billionaires means less opportunity for the rest of us.
The only silver lining is that, when we run out of millionaires, Obama & Company can't say that every ill can be solved by making millionaires and billionaires pay a little more. Oh, but that means we'll have to pay. Not such a silver lining.