Taxation is as much about ideology as it is about income. President Obama and liberal Democrats who control Congress are obsessed with an anti-wealth, anti-business philosophy. They can’t seem to control it—like someone who is demon-possessed. This mindset was revealed clearly by Obama when he departed from his teleprompter last April in a speech in Quincy, Illinois, about Wall Street reform. He said: “I do think at a certain point you’ve made enough money.” Obama’s own income according to his tax 1040 for 2009 was $5,505,409. Maybe that’s more than enough for him.
In October of 2008, when Obama was campaigning in Toledo, Ohio, he was approached by Joe Wurzelbacher (Joe the Plumber) who asked Obama if he believed in the American dream. He said he was concerned if Obama was going to raise his taxes and told Obama he wanted to buy a company. It was then that Obama made clear his socialist leanings, telling Joe that he was planning to raise taxes to “spread the wealth around.” Ever since cartoonists started drawing “the rich” as fat guys smoking big cigars, top earners have been under siege from the Left.
Today, what is particularly occupying the minds of America’s earners and producers who make the country grow is the maddening mist of uncertainty over what the tax laws will be after the end of this year. That’s when the so-called Bush cuts passed in 2001 and 2003 are due to expire.
Paul Krugman, The New York Times columnist and demigod of the left wing, maintains America “wouldn’t be as cash-strapped” if politicians “were willing to consider at least some tax increases” rather than preserving “tax cuts for the very affluent, at a budget cost of $700 billion over the next decade;…when we give millionaires more money…there’s a good chance that most of that money will just sit idle.” But being a Nobel Prize winner and professor of economics and international affairs at Princeton doesn’t give him eternal wisdom.
The notion that if tax cuts on the very rich expire, there will automatically be a $700 billion return to the Treasury is wrong, according to the Tax Foundation, which has been analyzing taxes since 1978. “People change their behavior when faced with starkly lower tax rates. They earn more money, which generates more tax revenue. Just how much is hard to estimate.”
The anti-wealth, anti-business line of attack of the Obama administration targets Americans earning more than $200,000 a year or $250,000 for couples. But as Ralph Reiland, in the Pittsburgh Tribune-Review writes:
An analysis of IRS data for 2007 shows the top 1 percent of income earners receiving 22.8 percent of income and paying 40.4 percent of all federal income taxes. Similarly, the top 5 percent of income earners received 37 percent of total income and paid 60.6 percent of all federal income taxes. In short, the top 1 percent of income earners paid more of the total federal income tax bill than the bottom 96 percent of income earners…Obama doesn’t talk about these numbers….He fails to acknowledge that our current lack of job creation is directly linked to American businesses sitting on nearly $2 trillion in cash, reluctant to invest and expand in the anti-business, anti-rich, high-tax environment….
A fatal flaw in Obama’s world of taxes is that he has forgotten about a major principle of American taxation—graduation. Why should the $250,000 figure apply to both the hard-working businessman and those such as LaBron James, who have atmospheric wealth? Where is the idea of a graduated tax when it comes to the rich of all measures?
One of the major arguments for retaining the Bush tax cuts has been that a large portion of well-to-do small businesses provide the nation’s jobs. A continuing dispute among the political class rages over whether small business is a major source of jobs and to what extent small business people are well-off enough to be beholden to Obama’s arbitrary tax rates. The Department of Labor says the nation’s 17 million small, non-farm businesses constitute 99.7 percent of all employers, employed 52 percent of the private workforce, and accounted for 51 percent of the nation’s sales. Small business-dominated industries provided 11.1 million new jobs between 1994 and 1998, virtually all of the new jobs created during that time period. “Small businesses ….provide 67 percent of first jobs and produce 55 percent of innovations.” Also, “40 percent of home-based businesses” happen to be operated by people with disabilities.