The Wall Street Journal has an excellent opinion piece on the curious arithmetic underlying President Obama’s plan to raise taxes on the highest wage earners. The pull quote from the article sums things up nicely:
“Take everything they earn and it still won’t be enough”
By promising Americans that only the wealthy will bear the burden of his tax increase the president ignores that the wealthy he targets are the small and mid sized businesses that historically comprise the bulk of new job creation. How is penalizing these tax payers going to expand employment? Because many of these small businesses file taxes as individuals (via limited liability companies or sub S corporations) they fall squarely in the sights of the Obama tax increase.
But that’s not the worst element of Obama’s tax proposal. To illustrate the sheer idiocy of the liberal Democrat lust for private sector income the Journal editors conspiratorially inquire, why stop at 39% as Obama proposes? Why not take every dollar of taxpayer income, and lower the threshold from $250,000 deep into the middle class to, say, $75,000? That would amount to roughly $4 trillion dollars (based on 2006 IRS data), which would barely cover what Congress proposes to spend next year.
As the Journal notes, President Obama is betting on an economic recovery and he’s wagering heavily on the “new liberal economic consensus that taxes don’t matter to growth or job creation”, an assumption contrary to historic fact. Also, by raising taxes on this particular group Obama runs the risk of their engaging in all manner of legal tax avoidance. But we have to remind ourselves that President Obama has no memory of the confiscatory rates of the 1960’s and 70’s, an era when doctors didn’t work on Wednesdays because their accountants told them that it literally wasn’t worth the effort.
The president is telling Americans that if they make less than $250,000 they won’t see their taxes raised “one single dime”. Tax payers are well advised to reach for their wallets when they here rhetoric like this. They should also remember that every Obama promise comes with an expiration date.