What if Obama does raise taxes on the rich? Then what?
I’ll admit it: There’s a part of me that wants President Obama to get every last tax increase he proposed this week.
Let him close the loopholes and raise tax rates on “millionaires and billionaires” — defined, in his world, as married couples who earn a combined $250,000 a year and individuals who bring in $200,000. Let him tax capital gains at the same rates as wages. Let him squeeze more revenue out of oil and gas companies. Let him sock it to the corporate jet owners.
And then, when the economy keeps foundering and the jobless are still out of work and the budget remains unbalanced, let him tell us what comes next.
You see, I don’t think there is a Plan B, because I don’t think his proposals amount to a Plan A for growing the economy, or creating jobs, or balancing the budget — or for anything besides raising taxes for the sake of raising taxes.
Obama’s quest to raise taxes, especially on “the rich” and corporations, has reached Ahab-like levels of obsession. The question doesn’t matter; for him, the answer is “raise taxes.” The $447 billion piece of legislation he proposed earlier this month was not so much a jobs bill as it was a tax increase-justification bill.
Obama’s already admitted more than once that he knows better than to believe infrastructure jobs involving the federal bureaucracy are truly “shovel ready.”
He may already be too late in calling for schoolhouse renovations if they’re to be completed by the end of next summer.
We’ve already seen, with the bankruptcy of the solar panel manufacturer Solyndra — in the exact month analysts predicted, and despite a half billion in federal loan guarantees — the folly of trying to shove taxpayer dollars out the door to private ventures quickly enough to count as a job-creation measure.
But none of that matters, because I don’t think that’s the point for him.
I don’t agree with those who think his intention is to destroy the economy or ruin the country. I don’t know if he believes his tax maneuvers will have an effect that’s opposite of what basic economics suggests — although I am certain he believes that a more muscular central government is in the public’s best interest.
I don’t know why he would continue to think people will put stock in super-investor Warren Buffett’s anecdote about paying a lesser share of his income in taxes than his secretary, when there are piles of data that make clear this situation is not an epidemic in our country.
I do know that we’ve known about this tax-the-rich tendency since the 2008 campaign. During one debate, Obama said he would raise capital gains taxes even if doing so resulted in less federal revenue, out of his sense of “fairness.”
I don’t know why he would feel that way. There are plenty of dime-store psychological analyses of Obama out there, if you’re into that kind of thing. I just know that one constant for the man who came to the White House as a self-proclaimed “blank screen” has been the push to tax the rich more heavily.
But ultimately, satisfying my curiosity about what Obama would do and say differently if he got his way on taxes, and proved it didn’t work, isn’t worth the collateral damage. Because here are a few other things I know:
I know the Reverse Rumpelstiltskins in Washington can’t take gold out of private hands and spin it into straw fast enough to do more good than harm.
I know that, even by the White House’s own projections, this soak-the-rich strategy won’t come close to balancing the budget — especially when it’s used to justify increasing spending even further.
I know the Obama approach — complicating the tax code even further, just to scratch this anti-rich itch — will only make it harder to reform the tax code. And that will make it harder to draft a broader strategy for reducing deficits and debt.
Finally, here’s something I can only suspect: that Obama’s answer to “what comes next?” once the millionaires and billionaires have been tapped will not be to cut spending as needed to achieve fiscal balance. Instead, it’ll be to define “millionaire” much lower than people who earn just a quarter of that amount.
(Note: This post, my column from Thursday’s print edition of the AJC, draws and expands on a few thoughts I posted earlier this week.)
– By Kyle Wingfield
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419 comments Add your comment
catlady
September 22nd, 2011
11:24 am
I’ll admit it: There’s a part of me that wants President Obama to FAIL.
UGA 1999
September 22nd, 2011
11:25 am
HDB….again not true. In some cases the gap between raising the cost of doing business and seeing the demand increase is too long.
catlady
September 22nd, 2011
11:26 am
Sounds like you are saying this, Kyle: I’ll admit it: There’s a part of me that wants President Obama to FAIL so we can show him he is wrong. No matter what that failure costs the country.
Jed
September 22nd, 2011
11:26 am
Obama may have made a bad decision on the Solar company, but Bush made a big bad decision to invade Iraq. Think how much money he cost the tax payers…still costing the tax payers. The wealthy realized a 12% increase in their wealth last year while the middle class and poor go hungry and homeless.
Thanks GOP
UGA 1999
September 22nd, 2011
11:26 am
OK TO ALL OF THE LEFT LEANING MINDS ON THIS BLOG….
ANSWER ME THIS….Last time Obama ran on a premise of Hope and Change. What is he going to run with this time? Honest question.
UGA 1999
September 22nd, 2011
11:27 am
Jed….what about when Clinton invaded Iraq?
catlady
September 22nd, 2011
11:30 am
” Iam certain he believes that a more muscular central government is in the public’s best interest.”
Actually, do you really believe that, Kyle? Or might it be that he fears a beefed up government is the only way to protect the little people. That those “benevolent associations” you love so well might not step up and take care of the poor, especially if they are a different color or nationality?
glacialspeed
September 22nd, 2011
11:31 am
The President does not enact tax increases, Congress does.
Nick
September 22nd, 2011
11:33 am
It’s simple, really, Kyle: we tried the exact opposite — lowering tax rates on the wealthy and not spending enough on infrastructure — and it failed miserably. So let’s go back to what worked before, regardless of whether you believe it’s a “plan”.
UGA 1999
September 22nd, 2011
11:33 am
catlady….why can the poor not take care of theirselves? Why must you mix in race to the discussion? LAME!
UGA 1999
September 22nd, 2011
11:33 am
The fact is that the Repubs may take the Senate as well…Clean sweep.
HDB
September 22nd, 2011
11:34 am
Tiberius – Your lightning rod of hate!
September 22nd, 2011
11:14 am
“Cutting educational spending isn’t good for the nation in that we will NOT be developing the workforce needed for the next decades;”
I have yet to see where ANY spending on education has been cut, HDB. In fact, its risen exponentially over the years and we have dumber people to show for it.
They’re called “liberals”.”
You need to talk to teachers!! Having been RAISED by a teacher, they are persistently complaining abot the lack of funding for adequate books and supplies……and the educational budgets are under fire by voucher advocates…LEAVING children behind!!
As a “liberal”, I’m one of the FIRST to state that welfare spending be linked to educational and job training spending to reduce the amount of people on welfare..thereby expanding the pool of employable people, thereby broadening the tax base…and REDUCING the tax burdens for ALL!!
UGA 1999
September 22nd, 2011
11:25 am
Wouldn’t the gap decrease if the demand increase occurred prior ot simultaneously as the costs increase!! I know that one of the first issues in business is cost containment……and all businessmen work on containing costs to a level where WHEN demand increases, they can aggressively implement expansion measures to increase profit while containing costs!!
John
September 22nd, 2011
11:34 am
UGA 1999
Really UGA, do some research. From the Daily Beast…
“President George W. Bush championed the concept when he was running for re-election in 2004, envisioning a world in which every American family owned a house and a stock portfolio, and government stayed out of the way of the American Dream.”
From USA Today…
“In a bid to boost minority homeownership, President Bush will ask Congress for authority to eliminate the down-payment requirement for Federal Housing Administration loans.
In announcing the plan Monday at a home builders show in Las Vegas, Federal Housing Commissioner John Weicher called the proposal the “most significant FHA initiative in more than a decade.” It would lead to 150,000 first-time owners annually, he said.
Nothing-down options are available on the private mortgage market, but, in general, they require the borrower to have pristine credit. Bush’s proposed change would extend the nothing-down option to borrowers with blemished credit.”
Noticed the last statement…it was Bush who proposed extending the nothing-down option to borrowers with blemished credit.
John
September 22nd, 2011
11:36 am
RCH
Trickle down economics. This is like giving a cocaine addict large amounts of cocaine and asking him to share it.
UGA 1999
September 22nd, 2011
11:36 am
HDB….I feel the correct way to approach the unemployment and governmental financial gap is to control spending and place tarriffs on any good made overseas.
UGA 1999
September 22nd, 2011
11:37 am
John….you believe everything you read? You are right Barney Frank (where are my teeth) had NOTHING to do with it! hahaha
HDB
September 22nd, 2011
11:40 am
UGA 1999
September 22nd, 2011
11:33 am
“catlady….why can the poor not take care of theirselves? ”
“The fact is that the Repubs may take the Senate as well…Clean sweep.”
First: many of the poor do NOT have the support systems that would allow self-sufficiency! Note that the preopnderance of the poor are in Appalachia….NOT urban America!! Many of those with mental illnesses who were PREVIOUSLY maintained in state facilities are NOW on the street and homeless!! If society were not as Darwinian and would find methodologies to attack the issues of as adequate (not permanent) safety net…..THEN could this nation bring itself out of its decline!!
As long as government is DIVIDED (Republican Congress, Democratic President…or vice versa)….I’d have no issue…for unicameral control (last time, total Republican) is what screwed up the nation!!!
Tiberius - Your lightning rod of hate!
September 22nd, 2011
11:43 am
“The President does not enact tax increases, Congress does.”
And if Congress increases taxes as a result of a Presidential initiative, they’re BOTH at fault.
Tiberius - Your lightning rod of hate!
September 22nd, 2011
11:45 am
“You need to talk to teachers!! Having been RAISED by a teacher, they are persistently complaining abot the lack of funding for adequate books and supplies”
“Complaining about” does not equal “actual budget cuts”, HDB
HDB
September 22nd, 2011
11:45 am
UGA 1999
September 22nd, 2011
11:36 am
Here’s what I think about that:
1) Tariffs COULD adversely affect the economy by causing the price of our EXPORTS to rise, therefore keeping America products out of ceratin markets. The tariff level has to be at such a level so that American products won’t be overpriced.
2) Welfare spending should be linked to educational and job-training spending so that we CAN produce a prepared labor force.
3) The safety net needs to be strengthened….but not made permanent!! This includes universal health care and better mental facilities for the mentally impaired.
There are many facets where a progressive approach is needed to solve the nation’s problems; there are others that require a conservative approach! One way DOESN’T always work!!
MarkV
September 22nd, 2011
11:46 am
UGA 1999 @11:08 am “I own two businesses and your math is way off. IF you are going to raise my taxes I am going to hire less and raise the price of my goods and services. Doing much more damage to the economy.”
This is exactly the stuff (to be polite) that the Republicans and business owners are trying to sell. Increase their tax and they will not hire people, will raise prices. As if there were no competition. As if those who would hire people and did not raise prices did not capture more of the market and make up for the lower profit per product.
Why is it that these people always seem to believe that the tax they are paying now is the exact maximum they should pay?
HDB
September 22nd, 2011
11:49 am
Tiberius – Your lightning rod of hate!
September 22nd, 2011
11:45 am
The teachers are complaining about what they’ve SEEN….there HAVE been budget cuts…..when teachers are being laid off because the budgets have been cut…..what would you surmise??
I DO agree that spending needs to be more effective…but to cut educational spending in a recession will lead to more of a decline in the American way of life by non-production of a competent work force for future endeavors……or are you saying that only those of MEANS should be educated????
UGA 1999
September 22nd, 2011
11:49 am
MarkV….LIke it or not it is true.
UGA 1999
September 22nd, 2011
11:50 am
Honestly I dont mind a small raise in taxes on the wealthy and middle class. As long as government can prove they can spend my dollar wisely. The over excessive spending of this admistration has proven they cannot handle that responsbility.
Steve From Dalton
September 22nd, 2011
11:53 am
“Our tax system still siphons out of the private economy too large a share of personal and business purchasing power and reduces the incentive for risk, investment and effort – thereby aborting our recoveries and stifling our national growth rate.”
– John F. Kennedy, Jan. 24, 1963, message to Congress
Tiberius - Your lightning rod of hate!
September 22nd, 2011
11:57 am
“Why is it that these people always seem to believe that the tax they are paying now is the exact maximum they should pay?”
Because they know business, where you don’t.
UGA 1999
September 22nd, 2011
11:57 am
Do you guys think Hillary is going to make a run against obama for the democratic nomination?
youknowitstrue
September 22nd, 2011
11:59 am
To give you an idea of how absurd the wealth envy argument is, take all of the income from everyone in this country earning over $250,000 and you have enough money to run the government for 140 days. Take all of the assets from all the billionaires in this country and you have enough money to run the government for another 140 days. Take every single penny from all of the fortune 500 companies and you have enough money to run the government for just 40 days.
The fact of the matter is that nearly half of all Americans don’t even pay income taxes. As you earn more in income in this country, you pay a higher percentage of the taxes. So what’s up with all the wealth envy?
Well like global warming it’s a scam that a lot of ignorant Americans are buying into without question.
Sorry but the answer is not higher taxes no the rich unless you want to completely destroy the economy. Do that and anyone with money to invest and start businesses will either sit on the money and move it overseas.
The answer is obvious: less government. Repeal Dodd-Frank, repeal Sarbanes-Oxley, repeal Obamacare. Stop wasting money on infrastructure and quit threating the very people who create all the new jobs with higher taxes. Do that and we will be well on our way to freeing our economy from its ball and chain courtesy of the imperial federal government.
Tiberius - Your lightning rod of hate!
September 22nd, 2011
12:00 pm
“The teachers are complaining about what they’ve SEEN….there HAVE been budget cuts…..when teachers are being laid off because the budgets have been cut…..what would you surmise??”
Again, HDB, where have budgets been CUT? Where is there any school system that has received LESS money than in previous years?
Hasn’t happened.
If they can’t spend the money we keep giving them wisely, then that is THEIR problem.
UGA 1999
September 22nd, 2011
12:00 pm
youknowitstrue…..A(FREAKING)MEN!
Zeb
September 22nd, 2011
12:05 pm
I may be wrong, but taxes were raised on the rich during Bill Clinton’s watch and we balanced the budget. Kyle, the “cut taxes and more jobs will appear” argument is old and results do not bear it out.
In fact zero jobs were created because of it. As a small business owner, I can state emphatically that I never have hired anyone as a result of tax cuts. I always SAVE that extra money for the rainy days that I know always happen when you own a business. I do think Fair Tax is just that and support it as a community resident and small business owner. In the meantime, make all pay the same rate with no loopholes; I can’t afford a lobbying firm or a battery of lawyers to look for loopholes in our tax law to benefit my business.
Jefferson
September 22nd, 2011
12:06 pm
Jail or fine companies that rip off the gov’t, you know the ones that are charging $16 a muffin. They are stealing. You can blame the gov’t but they took the money and overcharged, that is theft.
UGA 1999
September 22nd, 2011
12:07 pm
Zeb….did we have a democratic or republican congress at that time? Barack Obama is not Bill Clinton. And many other things have changes since his time.
spaceman109
September 22nd, 2011
12:08 pm
corporate tax rates could be cut to nothing. regulations could be tossed out the window. the only thing likely to happen is that companies would stick all those savings in their collective pockets while continuing to whine, cry and complain about lack of consumer demand. tough to increase said demand when, in the vast majority of cases, pay is frozen while costs continue to creep up except for skyrocketing health care premiums.
there is no way out for this economy in the short term unless people start thinking outside the box and quit their obsessive-compulsive worship of their particular political ideologies.
THE "REAL" TRUTH
September 22nd, 2011
12:10 pm
Man, I’m so happy to be out of Georgia with this backward thinking. You so called Republicans who are out of work, no healthcare, lost or losing your unemployment insurance, and probably or in the process of losing your housing, AND are still supporting the “Republican” platform, really confuse me. They just announced they WILL NOT support the Jobs bill. They will let the government shut down (remember we lost our AAA rating), They will let the post office go broke…all in the name of power.
Please place your tin foil hats back on, and return to your spin merchant…
mom of 3
September 22nd, 2011
12:10 pm
Wow! I leave for a while to workout, it’s called personal responsibility for my health, and come back to see that the usual attacks have taken over. UGA @ 11:50…..agreed. Posted the same comment a while back. HDB……nonsense. Before Obama ran for the presidency, he was giving less than me and my husband but making more. He can care all day long for the needy when it is someone else’s money, but when it comes to his own, not so much. John @ 10:44……I belong to a credit union and have only 1 credit card. I do all I can to live responsibly. I operate the way I expect my government to……with as little waste as possible. Could have “moved up” several times to a larger house, but haven’t. Have 2 paid for cars, no credit card debt, and very little left on the mortgage. Have given a mattress, stove, air conditioner, money for groceries, etc. to needy people, most of whom I have never met. Also, sponsor several children in several different countries, so spare me the continued lectures.
John
September 22nd, 2011
12:11 pm
Steve From Dalton
In 1963, the top tax rate was 91%….big difference from the 35% it is today, don’t you think?
Tiberius - Your lightning rod of hate!
September 22nd, 2011
12:12 pm
“Jail or fine companies that rip off the gov’t, you know the ones that are charging $16 a muffin. They are stealing. You can blame the gov’t but they took the money and overcharged, that is theft.”
Or maybe the government jut says NO, Jefferson.
Why is it that you ALWAYS ignore what is wrong with the perpetrator?
RCH
September 22nd, 2011
12:12 pm
John,
Trickle down economics. This is like giving a cocaine addict large amounts of cocaine and asking him to share it.
The key word here is ” given” It wasn’t given to them They “Earned” it
Tiberius - Your lightning rod of hate!
September 22nd, 2011
12:15 pm
“They will let the government shut down”
I see, REAL. The GOP will “let the government shutdown”, when it is the Democrat Senate Majority Leader who states he won’t pass a bill if the House does.
Got that logic.
Get on with it
September 22nd, 2011
12:17 pm
Will some of you actually educate yourselfs. This is getting bad and before to long it will be impossible to turn around. Taxes are not the problem. The problems facing this country are all the regulations that the democrats have put on companies over the last 6 years. Some of your are correct when you say the president cant spend a penny but with the democrates holding both the house and senate, they passed everything they little hearts desired and this country went straight down hill. The stimulus was handed over to Obama and his democrat shareholders, but the taxpayers paid dearly. There was no shovel ready jobs. Over 500 million was given to one of Obamas doners who set up a company to help low income people insulate their homes. Out of the 500 million grant money, 1 home was taken care of and 5 executives got some very attractive salaries out of it. I dont believe that the compay is in business any longer.
Then we have the same democrat politicians who paid a union contractor 5 million to put windows in a government building. The contractor installed the windows backwards. Guess what the cost was to fix it. Yes another 8 million. Should that not have been under warranty? Not when its union labor. Funny how the cost to fix is almost twice the amount to install in the first place.
We have got to get these regulations out of our government, The EPA and the DOE has got to go and our private industry has got to be left alone to grow this economy. You cant continue to kill business with all these regulations. Like VA and the coal mines. Obama and the democrats have every intention of shutting them down. How many more jobs will be lost there. Enough is enough. Do some homework people. You want to work you need to vote Obama out of office and let some of the conservative people take the government apart and stop these regulations that are making us a 3rd world country. This is serious, you your own homework. All this is verifiable. Just do the research.
DawgDad
September 22nd, 2011
12:18 pm
“Why is it that these people always seem to believe that the tax they are paying now is the exact maximum they should pay?”
We don’t. We believe we pay TOO MUCH.
Lil' Barry Bailout (Revised Downward)
September 22nd, 2011
12:19 pm
Your Idiot Messiah inherited a recovery in 2009 and now we’re talking about another recession already.
Idiot Messiah: Incompetent America-hating failure.
a dad
September 22nd, 2011
12:19 pm
A lot of talking points, and yes, even some factually accurate. Initial question is how many run their households spending more than they earn, and if they do, how’s that working out for you? Bottom line is gov’t needs to balance it’s budget: revenue = expenditures. Now, how to do that.
Figures are generally accurate that almost half the population really doesn’t pay income taxes. Do away with the IRS and current tax structure. Implement a national sales tax which would ensure that EVERYONE pays the same amount of their income based on their consumption. Obviously, Buffet buying a new yacht is going to pay more that Sally Secretary buying a new Camry. Lower income earners tend not to buy the big-ticket items anyway, right? A national sales tax would also result in money being received from all the illegals, help pay for the services they consume since even if they are paid in cah under the table, they still consume. Interesitngly enough, haven’t seen any figures on what the estimated revenue would be from this.
Or, implement a simply flat tax on everyone, then at year’s end, pick a number below which all taxes paid throughout the year will be refunded. Maybe even make it a sliding scale up to a magic number, which right now seems to be $250,000. Once you hit 250k, no refund.
One problem is this country is ruled by special interest, and that applies to each party. Neither R’s or D’s are immune to the influx of campaign dinero from lobbyists.
As for entitlements, yes, go through them. There is a lot of Medicare/caid fraud. Wlefare recipients should eb required to work, een at minimu wage. Then, pay whatever above and beyond minium wage to ensure they get the same income they had under full benefits. That way, you could support 2, 3, maybe 4 welfare receipients for what we pay 1 now.
There, lots to talk about.
Steve From Dalton
September 22nd, 2011
12:20 pm
John- Numbers change but the econonmics remain the same. Give me one country that ever taxed and spent itself back into prosperity? Keynesian economics do not work.
youknowitstrue
September 22nd, 2011
12:21 pm
I think the facts speak for themselves:
-Adding $4 trillion in debt, an amount greater than that accumulated by all former presidents combined
-Putting more than 2 million Americans out of work since passing the trillion dollar stimulus
-Passing 78 new major regulations costing American businesses $38 billion
-Putting 14 million more Americans on food stamps
-A credit downgrade followed swiftly by a downgrade in our country’s economic competiveness- dropping from #1 to #5 on the World Economic Forums rankings
NOBAMA in 2012!!
Joe the Plutocrat
September 22nd, 2011
12:22 pm
get on with it, here is your homework; find a dictionary and look up the word irony. you implore readers to “educate yourselfs” and follow your plea with perhaps the dumbest, base-level neo-con talking point in the history of blogging.
Lil' Barry Bailout (Revised Downward)
September 22nd, 2011
12:23 pm
Democrats love the perpetrator because perps by definition are acting against the good, the moral, the responsible, and Democrats hate all those things…it’s the same as hating America, another of their hobbies.
THE OBGYN
September 22nd, 2011
12:23 pm
UcantCLA – Agreed. The best way to create revenue for the government is to have a national sales tax. If .05 on the dollar is the number then I’m ok with that. If your worried about the “poor” then essential food and prescription drugs are exempt. Coke, beer, wine, candy bars and the like are not exempt. Eggs, cheese, milk, meat and maybe some other things are tax exempt. This will hit tourists and the “illegals”
There is too much fraud in the systems we have in place across the board. If you make 10 bucks an hour there is no way you should have 3 or 4 flat screens in your home… It just doesn’t compute.
GeoffDawg
September 22nd, 2011
12:25 pm
Well said. It’s obvious but still needs to be articulated.