Obama plows ahead with plans to raise taxes, not create jobs

What better way for President Obama to welcome me back from the beach than with a wrong-headed plan to jack up income taxes on “the rich.” From the Hill:

The White House said Monday that President Obama wants to pay for his $447 billion jobs bill by raising taxes on the wealthy and businesses.

In fact, we don’t really need to go beyond that first sentence: Obama’s bright idea is to pay for a jobs bill by raising taxes on businesses. The economy be damned, this president is determined to take money from job creators and use it to renovate school buildings. That would be bad enough — but, as Megan McArdle explains, it’s already too late for school-renovation projects to navigate the federal procurement process in time for work to begin next summer. Which means we’re back to spending money on jobs that aren’t ready for shovels.

Still, let’s soldier on to the details as provided by Jack Lew, director of the Office of Management and Budget:

The chief provision…would be to limit itemized deductions for individuals who make more than $200,000 a year and families that make more than $250,000, something the Obama administration has previously pushed to do through its budget proposals. Lew told reporters at the White House press briefing that this would raise about $400 billion.

The administration would tax the income investment fund managers make, known as “carried interest,” as regular income instead of as capital gains, which has a low 15 percent tax rate. This is another longstanding administration goal that has been resisted by Wall Street as well as some Democrats.

The administration estimates the capital gains change would provide $18 billion in revenue.

The administration also wants to eliminate tax breaks for the oil-and-gas sector, which would raise $40 billion, the administration said.

Another $3 billion would come from changing the way corporate jets depreciate. With a few other revenue increases, Lew indicated the total measures proposed by the administration would bring in $467 billion, $20 billion more than the cost of the bill.

Note, above, that line about the first item being “something the Obama administration has previously pushed to do through its budget proposals.” One wonders whether Obama has produced a “jobs bill” so much as a “tax increase justification bill.”

As it happens, I agree in principle with reducing or eliminating deductions and credits from the tax code — but as a trade-off for lowering marginal tax rates. Instead, Obama plans to raise tax rates on these same taxpayers (while apparently double-counting the increased revenues as part of his deficit-reduction package). He is effectively trying to make the tax code more complicated, not simpler. And experience teaches us that the wealthy are best positioned to take advantage of a complicated tax code and send Uncle Sam less money than he expected. This is a lose-lose-lose.

And yet this is not the only major flaw with Obama’s proposal. The congressional “super committee” tasked with drafting a deficit-reduction plan this fall is expected to consider flattening the tax code — that is, removing loopholes and lowering rates — for all taxpayers as part of its package. But if Obama removes loopholes for high earners to pay for his jobs plan, does anyone really think the super committee is then, separately, going to remove loopholes for the middle class?

And without that component, everything else on Obama’s list of “pay-fors” amounts to peanuts relative to the cost of the jobs bill.

This plan will win plaudits from the likes of MoveOn.org — and given the president’s deep political problems heading into 2012, maybe that’s all it’s designed to do. But it’s a double-whammy for the millions of Americans who are out of work and tired of hoping for change.

– By Kyle Wingfield

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211 comments Add your comment

USMC

September 19th, 2011
12:49 pm

It all goes back to Charlie Gibson’s question to then candidate Comrade Obama:

Comrade Obama defines ignorance with regard to economics:
http://www.youtube.com/watch?v=WpSDBu35K-8

GTT

September 19th, 2011
12:51 pm

Me, I’d go back to the beach.

Logical Dude

September 19th, 2011
12:55 pm

quoting: The economy be damned, this president is determined to take money from job creators

You mean the ones who aren’t creating any jobs? (snarky)

Let’s say he kept a loophole if you actually CREATED jobs. Would you be for the tax increase then? I hear all this talk about “job creators” but if they’re not creating jobs, they’re just using tax loopholes to benefit the few “rich” folks.

Jefferson

September 19th, 2011
1:03 pm

Well there you are, something to hate.

Tiberius - Your lightning rod of hate!

September 19th, 2011
1:08 pm

Welcome back, Kyle. Hope the vacation was a good one.

“Obama’s bright idea is to pay for a jobs bill by raising taxes on businesses.”

Yep. The new “up is down”, “left is right”, “black is white” topsy-turvy world of the liberal mind is hard at work in the White House.

Joe The Plumber too.

September 19th, 2011
1:12 pm

The dems are not even with him on this one, they are lukewarm at best. This is just another feeble attempt at trying to fool the country from a one term and out pretender in chief.

John

September 19th, 2011
1:32 pm

Bill Clinton raised taxes and how many jobs were created?

George W. Bush lowered taxes and how many jobs were created…um, lost?

John

September 19th, 2011
1:41 pm

Just how much money are these ‘job creators” currently sitting on and still not creating jobs? Apple alone has $76 billion cash on hands. How is giving them tax reductions so they can horde more cash going to create jobs?

Tiberius - Your lightning rod of hate!

September 19th, 2011
1:47 pm

“Bill Clinton raised taxes and how many jobs were created?”

Doesn’t matter. Simply raising taxes or lowering taxes by themselves doesn’t do a thing for an economy.

John

September 19th, 2011
1:54 pm

Kyle,

How can you call them “job creators” when for the past few years they’ve been eliminating jobs?

John

September 19th, 2011
1:57 pm

Tiberius – Your lightning rod of hate!

So you admit, raising taxes on the wealthy does not destroy jobs like the right claim.

MarkV

September 19th, 2011
1:59 pm

If anybody hoped Kyle would come back with more reasonable arguments, he/she must be disappointed.

“In fact, we don’t really need to go beyond that first sentence: Obama’s bright idea is to pay for a jobs bill by raising taxes on businesses. The economy be damned, this president is determined to take money from job creators and use it to renovate school buildings.”

Inn other words, according to Kyle creating jobs has nothing to do with economy. According to Kyle, if people get jobs, and have money to spend, it does not help economy. What is important that investment fund managers do not pay more than a pittance in taxes on the billions they make.

Tiberius - Your lightning rod of hate!

September 19th, 2011
1:59 pm

“So you admit, raising taxes on the wealthy does not destroy jobs like the right claim.”

No, and don’t attempt to speak for me.

Raising taxes will not “destroy” jobs, but it certainly won’t give any incentive to those who could create jobs to do so.

Tall

September 19th, 2011
2:03 pm

“Bill Clinton raised taxes and how many jobs were created?

George W. Bush lowered taxes and how many jobs were created…um, lost?”

John:

Go back and check the unemployment rates during the GWB years and you will find that unemployment never exceeded 6%. That’s remarkeable given the 9/11 crush.

Yes, President Clinton did raise the tax rates, but he was the beneficiary of a technology boom that
lifted everyone up. No, he did not create those jobs.

Tiberius - Your lightning rod of hate!

September 19th, 2011
2:04 pm

Anytime a poster uses the term “In other words” they are trying to misstate the writer’s original intention because they can’t back up their position without doing so.

MarkV

September 19th, 2011
2:05 pm

What is lost in these arguments about lowering taxes for “job creators” and getting rid of regulations is that none of those things would have a measurable effect in the short run. People need jobs now, not when those things might perhaps have any effect. To push those things is understandable when the goal is not to create jobs and help the economy, but to prevent Obama’s reelection.

John

September 19th, 2011
2:12 pm

Tiberius – Your lightning rod of hate!

“Raising taxes will not “destroy” jobs, but it certainly won’t give any incentive to those who could create jobs to do so.”

Please explain. If taxes were raised to pay for the jobs bill which the government would invest that money in private companies to rebuild our infrastructure…jobs would immediately be created putting some in the working class back to work. This would put money in their pockets allowing them to spend (increasing the economy) this spending could generate demand for products which in turn could spur hiring so companies could meet the demand for their products (supply and demand which is often spewed by the right). This is how we could grow the economy. Companies hire based on need to supply their needed products.

But instead, Republicans believe we need to protect the wealthy. Tell me how does that create the demand for increased production which would then create the need for job growth that leads to a growing economy?

Tiberius - Your lightning rod of hate!

September 19th, 2011
2:12 pm

To think that government can do anything to create enough sustainable jobs through stimulus programs or tax savings alone is simplistic and economically unwise given our current debt and deficit issues.

Looking for instant gratification in turning around an economy is just as ridiculous. Less government interference is the ONLY way to create sustainable jobs and a permanently robust economy. Republicans and especially Democrats who continue to try to tinker at one thing or another without looking at the long-term picture will doom us in trying to make real, substantive changes in the way this economy work (or doesn’t).

Tiberius - Your lightning rod of hate!

September 19th, 2011
2:15 pm

John @ 2:12>

We did that with over $1 trillion dollars 2 years ago, and it didn’t work then. Why do you have any idea that the same policy would work now, in an even smaller form?

This is the typical thinking of those who do not understand the complexities of an national and world economy.

MarkV

September 19th, 2011
2:22 pm

Kyle,
Instead of criticizing an increase in taxes of the rich, why don’t you tell us exactly which provisions of the jobs bill you oppose, and why?

MarkV

September 19th, 2011
2:23 pm

The stimulus worked the first time. There is no reason why it would not work again.

ragnar danneskjold

September 19th, 2011
2:28 pm

Welcome back, Kyle, hope the batteries are recharged. I have a great idea – in the spirit of comity, I think the Republicans ought to agree to the Obama tax plan on three conditions: (1) it is imposed in the 2008 blue states only, (2) it is made retro-active to Jan 1, 2011, and (3) it will expire after one year, i.e., at the end of tax year 2011, to ensure that 2012 voters have a reminder of the virtues of democrats.

John

September 19th, 2011
2:32 pm

Tiberius – Your lightning rod of hate!

“We did that with over $1 trillion dollars 2 years ago, and it didn’t work then.”

Really, it didn’t work? Didn’t it get us out of a recession? What’s your source that it didn’t work?

According to the August 2011 CBO report, it

1) Raised GDP by between .8% and 2.5%
2) Lowered unemployment rate by between .5% and 1.6%
3) Increased the number of people employed by between 1.0 million and 2.9 million
4) Increased the number of full time equivalent jobs by 1.4 million to 4.0 million

Tiberius - Your lightning rod of hate!

September 19th, 2011
2:33 pm

“The stimulus worked the first time. There is no reason why it would not work again.”

Wrong as usual, MarkV. It created or saved only half as many jobs as it was touted to save, and with the spending going away, those temporary saved or create jobs are now starting to go away as well. Look at all the communities across America who spent that money on teachers, fire fighters and cops. They’re now realizing that in order to keep those jobs NEXT year, taxes will have to go up (as they should have in the FIRST place) or they’ll need more deficit spending from Wash. D.C. to make their budgets work.

Because the spending was temporary.

You haven’t seen retail numbers increase very much in the past 2 years, have you? Of course not. That’s because so much of the spending that went into those jobs was used to pay off EXISTING bills, not buy very many new things.

Government-funded stimulus is nothing more than shovel crap against the tide. You can’t stop the tide.

Tiberius - Your lightning rod of hate!

September 19th, 2011
2:35 pm

John, first rule of thumb.

Do not try to make your case using CBO numbers. That organization is the epitome of “Garbage In – Garbage Out”.

John

September 19th, 2011
2:39 pm

Tiberius – Your lightning rod of hate!

So why do both Democrats and Republicans use CBO projections?

MM

September 19th, 2011
2:40 pm

I would like to deal with this “job creator” nonsense we hear so much of from pro-business proponents. The guy or gal at the top of the employment heap has an important role in assembling the necessary capital and doing the top-level planning necessary to start or expand a business but what is less acknowledged is the critically important role played by other workers. It’s common sense that if any worker down the line does not do his or her job the “value chain” breaks down so that no product will be delivered and the firm will fail and a job will be snuffed out. We are conditioned to worship the person on top of the heap but if every person does not do their job then the boss is effectively a voice crying out in the wilderness who accomplishes nothing. We should go easier on the hero worship and recognize and respect that every worker creates a job or the firm fails.

John

September 19th, 2011
2:42 pm

Tiberius – Your lightning rod of hate!

Again, I’ll ask…where is your source analyzing and document how the stimulus package made the economy worse?

Ayn Rant

September 19th, 2011
2:47 pm

Welcome back, Kyle! Actually, President Obama’s job-creating proposal is the only hope for moving the economy out of stagnation.

President Obama’s plan addresses the root cause of the present stagnant economy: an excess of capital and a dearth of jobs needed to create the consumer demand that will provide opportunities for the profitable investment of capital. The plan converts excess capital directly into useful jobs, by confiscating (taxing) excess income that would otherwise create more unneeded capital.

Republican “job-creating” notions are just another round of voodoo economics. No one who has mastered simple arithmetic need be fooled again.

Surely you’re don’t believe that trashing consumer, worker, and environment protection regulations will entice investors to pour capital into enterprises that create products for which there is no consumer demand. Surely you don’t believe that tax cuts for the ultra-rich and Big Business can do anything but create more unneeded capital, which is then borrowed back by the government at current interest rates and added it to the national debt.

Let’s help President Obama push the economy out of stagnation and into job-creating, job-sustaining, profit-making enterprise, even if it means running roughshod over the obstructionists who destroyed our economy in 2008-2009!

Halftrack

September 19th, 2011
2:50 pm

Is Obummer paying any taxes on his speeches, writings, honorariums, investments,etc. outside his Presidential salary. What is the % ? Maybe he should be paying more taxes.

Tiberius - Your lightning rod of hate!

September 19th, 2011
2:54 pm

“So why do both Democrats and Republicans use CBO projections?”

Because they can both use an organization that reports to them, i.e. “Congressional” Budget Office, to provide the numbers they wnat us to see in the manner in which they want us to see them.

Tiberius - Your lightning rod of hate!

September 19th, 2011
2:57 pm

“Again, I’ll ask…where is your source analyzing and document how the stimulus package made the economy worse?”

John. Stop trying to state my position on something when I have not done so. If you’ll read what I post instead of trying to assign your preconceived notions to what I post, you’ll see that I have never stated that the stimulus has made the economy worse.

Now, if you wish to debate me on what I actually write, instead of simply making things up as you go along, please do one thing.

READ.

John

September 19th, 2011
2:57 pm

Tiberius – Your lightning rod of hate!

For the 3rd time…where is your source analyzing and documenting how the stimulus package made the economy worse?

Tiberius - Your lightning rod of hate!

September 19th, 2011
3:00 pm

“Actually, President Obama’s job-creating proposal is the only hope for moving the economy out of stagnation. ”

Doing the same thing over and over again and expecting different results is the mark of insanity, Ayn.

Alabama Patriot

September 19th, 2011
3:07 pm

John

September 19th, 2011
1:41 pm
Just how much money are these ‘job creators” currently sitting on and still not creating jobs? Apple alone has $76 billion cash on hands. How is giving them tax reductions so they can horde more cash going to create jobs?

That cash they’re sitting is after taxes. They can do with it what they want. You’re actually going to advocate taxing (again) already taxed income?

Ever heard of Lenin?

John

September 19th, 2011
3:07 pm

Tiberius – Your lightning rod of hate!

“Doing the same thing over and over again and expecting different results is the mark of insanity, Ayn.”

Are you referring to Republicans that want to go back to the Bush policies that got us in the mess in the first place. While the economy is not where anyone would like it to be, it’s not as bad what it would have been without the stimulus. The stimulus had a positive effect…you can’t ignore the facts.

ByteMe

September 19th, 2011
3:12 pm

you can’t ignore the facts

Of course he can. Does it all the time.

Ayn is correct: if they want to pay lower taxes, then they need to increase their expenses by hiring more people. Otherwise, let’s take it from them at the point of a gun and use it to create construction-related jobs building infrastructure we desperately need in this country.

Tiberius - Your lightning rod of hate!

September 19th, 2011
3:12 pm

“Are you referring to Republicans that want to go back to the Bush policies that got us in the mess in the first place.”

No. And Bush’s policies didn’t get us into this mess.

And the stimulus was, as stated above, a temporary positive that will disappear in the next 12 months or less. Back to the starting gate because government has no clue about how to handle an economy.

ByteMe

September 19th, 2011
3:13 pm

And Bush’s policies didn’t get us into this mess.

Nope, but they sure made it worse than it could have been otherwise.

John

September 19th, 2011
3:14 pm

Alabama Patriot

Point out to me where I was calling for Apple or any other company to be taxed again. My question is how does reducing their taxes add more jobs when they already are sitting on large piles of money?

MarkV

September 19th, 2011
3:19 pm

Tiberius @2:33 pm: Wrong as usual.

The stimulus reversed the contraction of the economy, created many jobs. The success is not measured by what “it was touted “to do, but by what it did.

“Because the spending was temporary.”

You mean, the spending should have been permanent?

John

September 19th, 2011
3:21 pm

Tiberius – Your lightning rod of hate!

“Back to the starting gate because government has no clue about how to handle an economy.”

And business does? How are corporations hording cash helping the economy?

Alabama Patriot

September 19th, 2011
3:22 pm

My question is how does reducing their taxes add more jobs when they already are sitting on large piles of money?

What they do with after-tax cash is their business. Creating jobs is a reflecion of tax and regualtory policy.

Why are you so worried about Apple’s tax burden? What is the obsession with the left about other people’s earnings?

Hillbilly D

September 19th, 2011
3:27 pm

This thing has been 40 years (or more) in the making and both sides helped us to get where we are. Both sides are now locked into the same basic positions they’ve had during this period. In my opinion, neither side knows the way out. This thing is going to last about 10 years, if we’re lucky, and the best thing most of us can do is hunker down and try to ride it out. The U.S. sold her soul for short term profits and cheap consumer goods and now it’s time to pay the fiddler.

Tiberius - Your lightning rod of hate!

September 19th, 2011
3:28 pm

When people start off their posts with the term “You mean” they are trying to deflect from the actual meaning of the original post because they don’t have a valid argument against it without the deflection.

saywhat?

September 19th, 2011
3:30 pm

The first stimulus, imperfect as it was due to Republican input, applied the brakes to a runaway economic freight train of disaster. But because the train that accelerated for 8 years in the wrong direction didn’t stop and turn on a dime in 18 months, the right wingers believe brakes don’t work, and plan to floor the accelerator again, rather than apply the brakes one more time. Brilliant…

John

September 19th, 2011
3:31 pm

Alabama Patriot

“What they do with after-tax cash is their business.”

Not exactly…what they do with it must be legal. Can’t grow the economy if the corporations and wealthy increase their wealth and just sit on it.

Tiberius - Your lightning rod of hate!

September 19th, 2011
3:32 pm

“And business does? How are corporations hording cash helping the economy?”

John, business is the ONLY entity that knows how an economy works. And they are holding cash because they don’t believe any more that other knowledgeable people do that this economy has actually turned the corner, therefore they are keeping profits in-house so that they can continue to be in business though the worse times to come.

Alabama Patriot

September 19th, 2011
3:34 pm

So sitting on your own earned wealth is now illegal to you? Have you bothered to say that our load so you can fully understand how absurd it is?

Tiberius - Your lightning rod of hate!

September 19th, 2011
3:36 pm

“The first stimulus, imperfect as it was due to Republican input, applied the brakes to a runaway economic freight train of disaster.”

Except we’re still going downhill, or speed has increased, and our brakes have worn down to nubs.

There are no more brakes to apply to this train, saywhat.