"Why is the modern Republican Party so opposed to allowing the rich to pay just a little bit more in taxes to help solve the debt and deficit problem in this country that they would prefer no deal at all?" Sen. Patty Murray, D-Wash., asked at The Brookings Institution on Monday.
First off, Murray should be honest; this isn't about "allowing" the rich to pay more. They're already allowed to pay more. President Barack Obama wants to force the top 2 percent of income tax payers — those earning $200,000 or more, who already pay about 51 percent of federal income taxes, according to the Tax Foundation — to pay a much higher tax rate. Also, Obama would increase the top tax rate from 35 percent to 39.6 percent. If the federal government raised your tax rate by nearly 5 percent, you probably would not look at that increase as "just a little bit more."
Secondly, Obama's soak-the-rich levy wouldn't, as Murray claimed, "solve the debt and deficit problem." It wouldn't even come close. Tax Foundation President Scott A. Hodge estimates that the Obama tax plan would fund the government for just less than a week — that is, 6.8 days.
"This really doesn't have anything to do with the deficit," Hodge observed. "This is ideology. It really doesn't have anything to do with economics. This is their philosophical belief that the rich should pay more."
Obama's one week's worth of savings comes with a price tag. A new Ernst & Young report, prepared for the National Federation of Independent Business and the Independent Community Bankers of America, warns that the Obama tax increases, which also would tax dividends as ordinary income and attach a 3.8 percent Medicare levy on investment income, could slow the economy in a way that results in roughly 710,000 fewer jobs.
Republicans have good reason not to vote for a tax increase that they believe could hobble the recovery.
To recap: The Obama tax plan relies on raising taxes on the 2 percent of earners who pay more than half of income taxes; that's the Democrats' idea of balance.
These new tax increases would barely dent the deficit, would not be expected to help the economy and might well damage it.
Democrats are insisting on this tactic, not because they believe their plan would create jobs — Murray did not argue to that effect — or because these new taxes would jump-start the economy but because they desperately need a campaign gimmick that can masquerade as a solution to the ailing U.S. economy, which is saddled with a $15.8 trillion national debt.
There's nothing responsible about this so-called balanced approach. By insinuating that Washington can pay down the national debt by squeezing the rich "just a little bit," Democrats are no more responsible than Republicans who have pledged never to increase taxes.
When the economy has recovered fully, I believe that Washington will have to enact tax reform that increases revenues. But first the U.S. economy has to improve.
Obama has no idea how to make that happen. He knows that the private sector is sitting on cash — more than $1.7 trillion in May, according to The Wall Street Journal. That's why Obama claimed in June that "the private sector is doing fine." But the president has no blueprint for how to instill corporate decision-makers with the confidence they need to hire more workers rather than hoard their cash. Indeed, his remedy scares employers.
So why would Americans re-elect him?
Email Debra J. Saunders at dsaunders@sfchronicle.com. To find out more about Debra J. Saunders and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.
COPYRIGHT 2012 CREATORS.COM
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Why do we have to have a fully recovered economy before we can enact tax reform? What is a fully recovered economy? Sounds like that could mean different things to different people. I think BHO knows that tax hikes won't fix the problem. He's just using this to rally his base and get re-elected. After all, most Americans like the idea of getting stuff and having someone else pick up the tab. I went out do dinner yesterday and the monopoly guy and his dog picked up my tab. I was estatic. I thanked him and congratulated him on second place in that beauty contest.
Comment: #1
Posted by: Chris McCoy
Thu Jul 19, 2012 9:24 AM
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Ma'am;... A second to Chris in regard to a recovered economy... You know; in the age of capital, and in the age of Robber Barons the rich, and those with property paid all the taxes... Mr. Lincoln had an income tax, but he also sold a great deal of debt for the war... When we first had the income tax constitutionally, it only affected 11 to 13 percent of the population... And the rich did howl; but while they howled we fought the first world war, and finished that war with hundreds more millionaires than we started...
Now; when property was taxed according to its ability to produce, property was cheap, and labor to work it was dear... Now that labor carries the country in every sense, and not just indirectly, labor is cheap, and property is dear... The need for every worker to support the government as well as himself and his employer has made each work harder, and longer, and driven down the price of every worker... As wages have went down, the price of money has went up... What the worker cannot afford, and no less, needs he must buy on credit... The property he could once find cheap compared to his wages he now finds he must go into bondage for... If taxes on property were at their proper level, no one could ever hold real estate for speculation... They could buy, and they could farm, or turn it into a factory; but the taxes would require each to make money or dispose of the property to others or to the commonwealth...
The real estate balloon was built on tax iniquity...Property is still selling far beyond its worth simply because people can afford the taxes year after unproductive year..Banks can afford to sit on foreclosed property if they can speculate that it is worth more than is owed... And then they can write it off as a loss...
The only people who should pay taxes are the rich... Are we poor widows supporting the temple of government out of our poverty... We pay everything for nothing... Our armies go to war to defend the ideologies of the rich... They spend our money all over the globe, and this is an invitation to terrorist to come here for the grand tour...We are educating the world for dollars spent to buy tyranny, and world capitalism; but we cannot afford decent primary education for our children...Certainly the rich should pay for the privilage of stealing all our resources, and making the world hate us; and who else can pay???...
Everyone else is struggling with their rent, or mortgages, and credit cards, living pay check to pay check, and are never free from debt....Certainly the right is correct to resist taxation, but to resist it for the rich is the purest stupidity... The rich have representation, and we do not... No taxation without representation should be our battle cry... Not a child is born in this country without each of us having less representation... The house which was supposed to grow with the population has been fixed... Each representative comes from districts divided more or less to make their seats certain... Why should any working person, right or left pay when he is not represented by the person or party of his choice??? The constitution said one representative for every 30K of citizens...We should have almost nine representatives for the one we send now, and I trust even the most practiced gerrymanderer could not divide such districts...
Government is for sale to the very class that says it can afford no more taxes... They are liars...Look at what they spend to buy elections... Who else can pay??? Lousy government equals wide spread poverty... Everyone has to support the privilages of the rich on less and less money...Why should we pay when we get nothing??? Why should we not tear the constitution to shreds, and tell the rich we are the law, and they are the outlaws???It is time to get the criminals out of control of government... If they can afford to buy government; they can afford to support government; and if the price is too high, they can give up their loot, and join the work force...Who needs such cry babies in the home of the brave???
Thanks...Sweeney
Comment: #2
Posted by: James A, Sweeney
Thu Jul 19, 2012 2:34 PM
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Looking at this issue from a purely pragmatic point of view, if I were rich, and studied in history, I might be eyeing the lessons of the French Revolution and wondering whether the considerable current pressure on the poor should be relieved a little and the goodwill of the "rich" should be credited for that.
Sometimes symbolism counts a lot more in the minds of the masses than the reality. Just a thought...
Comment: #3
Posted by: Masako
Thu Jul 19, 2012 7:21 PM
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And the republicans are playing this all wrong. They start fighting instead of using this as an opportunity to comprimise. Increase the taxes for spending cuts. That way they could play this situation to their advantage instead of looking like the elitist rich, white guy party.
Comment: #4
Posted by: Chris McCoy
Fri Jul 20, 2012 9:19 AM
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