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
John
September 22nd, 2011
12:25 pm
UGA 1999
“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.”
Like how you change your tune when facts are presented. You, like other conservatives, believe tax policy (ie, lower taxes) in all cases creates jobs…calling it trickle down economics (Voodoo Economics according to Bush 1) but when presented with the facts, your response is there were many other things that were different.
RCH
September 22nd, 2011
12:25 pm
Tiberius – Your lightning rod of hate!
Hey,
I want to try one of those $16 muffins. Wonder what was in it.
Who should be fired, is the govt. idiot that agreed to pay that amount. I guess if you can tax to your hearts content and spend what you want its O.K..
MrLiberty
September 22nd, 2011
12:27 pm
All that would be fine if you could actually count on the republicans in congress to undo what Obama will enact. The history of the republicans is clear. Even when they control both houses and the white house they just make things worse. Possibly with a Ron Paul presidency there might be enough of a mandate from the people to actually force the hands of these small government wannabees, and maybe we will see plenty of incumbent republicans losing in the primaries to republicans that actually care about free markets, small government, etc. but that is a big if.
Without fundamental economic principles that point the RIGHT way to economic prosperity, failed democratic policies will just be replaced by failed republican policies. Without principled representatives, the pressures from the parasitic corporations and others that feed at the federal trough will overwhelm any hope for real restoration of a free economy. None of the presidential candidates other than Ron Paul are working to educate the citizens on what freedom is really about and why it is the only path to economic and social prosperity.
Ron Paul 2012.
itpdude
September 22nd, 2011
12:28 pm
It’s probably a good idea to go back to the rates of the late 90’s because the economy was humming fine then and there was no deficit AND we were paying down the debt. One legacy of W, unfortunately, are his tax-cuts. They put us back into debt and appear to not have helped the economy all that much, at least in the long-term.
That said, soaking the rich is not the solution, but increasing their income taxes moderately to the 90’s level worked before. What we have now is obviously not working. If the tax-cut extension was the solution, where is the result?
catlady
September 22nd, 2011
12:30 pm
UGA 1999–because folks like you tell all of us it is the blacks and latinos that are sucking the teat of government!
catlady, UGA PhD 1995
Sister Sarah
September 22nd, 2011
12:31 pm
Do we all agree that we have been under the SAME tax policy as the previous adminstration and there has not been a tax increase in what…10 years?? Okay…do we all agree that there was massive JOB KILLING under CURRENT tax policy of lower taxes as well as regulatory structure that was in place during the previous administration? OK then, so how about we cut the B-S!
Junior Samples
September 22nd, 2011
12:36 pm
Tiber,
Regarding education spending cuts.
http://www.cbpp.org/cms/index.cfm?fa=view&id=1214
Tiberius - Your lightning rod of hate!
September 22nd, 2011
12:36 pm
“Do we all agree that we have been under the SAME tax policy as the previous adminstration and there has not been a tax increase in what…10 years??”
Yes.
“Okay…do we all agree that there was massive JOB KILLING under CURRENT tax policy of lower taxes as well as regulatory structure that was in place during the previous administration?”
No.
This has been another episode of “Simple Answers to Stupid Questions”.
Dearie
September 22nd, 2011
12:39 pm
Tax implications are not the reason my two family members who own their own businesses are not hiring. They will not hire until they see how Obamacare will impact their bottom line. Right now, as a cost cutting measure they hire people who are insured by their spouses.
Tiberius - Your lightning rod of hate!
September 22nd, 2011
12:40 pm
Junior, cuts in dollars, or cuts in INCREASES?
Big difference.
And you’re talking about what states do. Many, if not all, local districts simply make up the cuts from higher up with increases at the local level to offset.
Again, show me where budgets for education (and specifically at the local level where it is delivered) have actually gone down.
Bill
September 22nd, 2011
12:40 pm
“I don’t know if he believes his tax maneuvers will have an effect that’s opposite of what basic economics suggests”
I don’t know what basic economic theory you are referring to. Perhaps it is the notion that reducing taxes for wealthy individuals and corporations will create jobs, because they are the ones who create jobs. This totally ignores basic business sense. It assumes that companies are just waiting to hire if only the government would free up some of their money. But, companies don’t hire because they get some extra cash. If or wealthy individuals find themselves recipients of extra cash (tax cuts), they first try to figure out how much of it they can keep. That is not greed, that is just business. On the other hand, there is one thing that will lead organizations to hire. If demand for their products or services exceeds their ability to deliver, then they will hire or lose that business to a competitor. There are plenty of people who believe that this keynsian idea is wrong or outdated, but that stance seems illogical to me. I will hire more people when demand dictates that I need them so I can make more money. There are exceptions, where organizations make strategic hires, but those are very much in the minority. So, how do we create this demand? Put money in the hands of people who have no choice except to spend it. History has shown that wealth does not trickle down, in fact it moves in the other direction.
Bill
September 22nd, 2011
12:42 pm
Dearie,
I suspect that what you relatives are using for a hiring screen is probably illegal. It is certainly questionable ethically. It is called freeloading or social loafing.
MarkV
September 22nd, 2011
12:43 pm
Tiberius @11:57 am: “Because they know business, where you don’t.”
So many things you know about other people – in your fantasy.
MarkV
September 22nd, 2011
12:45 pm
DawgDad : 12:18 pm “We don’t. We believe we pay TOO MUCH.”
Exactly right. It is a belief.
JC
September 22nd, 2011
12:46 pm
Obama is the worst President in American History!!!! Nobody is even close! OMG!!!!!!! Obama Must Go!!!
Bill
September 22nd, 2011
12:48 pm
THE OBGYN
A national sales tax seems like an attractive option, but there are two things that worry me. Economist tell us that 80% or our economy is driven by consumer spending. A national sales tax is a disincentive to spend, and may weaken the economy further. The second and related reason, is that state and local governments have found that revenue from a sales tax is less reliable that revenue from income tax, because when the economy slows, people modify their spending behavior. This means that the when the economy is slow, there will be an even more extreme effect on revenue.
MarkV
September 22nd, 2011
12:49 pm
“Okay…do we all agree that there was massive JOB KILLING under CURRENT tax policy of lower taxes as well as regulatory structure that was in place during the previous administration?”
No, there are people who do not agree, even though it is true.
Lil' Barry Bailout (Revised Downward)
September 22nd, 2011
12:50 pm
doodads ps
——
God I love the iPhone spell checker!
Bill
September 22nd, 2011
12:50 pm
Barry, way to attack the individual instead of the argument.
Joe the Plutocrat
September 22nd, 2011
12:50 pm
listen folks, if you lean to the right and you don’t like anything or anyone who leans to the left; there’s really no need to comment on this blog. ditto those who are more left of center, and have no need for anything to the right. the issue at hand is the national debt; not jobs. NOBODY creates a job, ergo, nobody will/will not hire an employee because of the tax codes. take for example the moron from Louisiana who complained about how he only “takes home” about $600K of the $6 million his LLC’s produce. are we to believe that hiring new employees or opening twice as many new Subways and UPS stores; is not an option (because of the tax code – if he has concerns about the economy and consumer spending, this is a different beast). all things being equal (tax code wise), if he has the capital and doubles his “investment” his new, larger enterprise will generate $13.2 million, and he’ll take home $1.2million. again, he can get together with his CPA or silent partners, if he has partners; and decide if he should expand, but seriously, it is cowardly and self-serving to defer to the tax code. and anyone see the Forbes 400? see how many inherited their wealth – specifically the Walton heirs. THEIR FATHER/GRANDFATHER ‘created jobs’. They do noting but collect income in the form of stock dividends; in the billions of dollars, and they are taxed at 15%.
Tiberius - Your lightning rod of hate!
September 22nd, 2011
12:51 pm
“No, there are people who do not agree. Period.
Fixed your typo, MarkV. No thanks needed.
Lil' Barry Bailout (Revised Downward)
September 22nd, 2011
12:51 pm
Taxpayer provided cell phones = freeloading.
Lil' Barry Bailout (Revised Downward)
September 22nd, 2011
12:52 pm
Bill, it was a two-fer.
You’re welcome.
Bill
September 22nd, 2011
12:52 pm
Companies to not create jobs because it is a good thing for the country. They create jobs in response to customer demand.
Bill
September 22nd, 2011
12:54 pm
Barry, How is making profit by riding someone else’s insurance morally or ethically different from welfare?
Lil' Barry Bailout (Revised Downward)
September 22nd, 2011
12:58 pm
Making profit by keeping costs low is just plain good business. Only an idiot seeks out high-cost inputs to production. Duh.
Lil' Barry Bailout (Revised Downward)
September 22nd, 2011
12:59 pm
And customer demand doesn’t exist without jobs (or theft of the taxpayers property).
UGA 1999
September 22nd, 2011
1:02 pm
catlady…..and?
MarkV
September 22nd, 2011
1:04 pm
Tiberius @ 12:51 pm
Thanks for silliness would not be contemplated..
Kyle Wingfield
September 22nd, 2011
1:05 pm
Folks, if a certain word is banned, then writing it with a few asterisks along the way is not any better.
On a related note, I think it may be time for one of my periodic crackdowns on name-calling…
Joe the Plutocrat
September 22nd, 2011
1:05 pm
OK, so a blogger can refer to me as a “greedy SOB”, but I cannot advise him of a better use of his time? hey Kyle… oh nevermind.
Sarah Robertson
September 22nd, 2011
1:05 pm
I AM SICK OF ALL YOU RIGHT WING,DUDLEY DO RIGHT KNOW WHAT TO DO. IF YOU KNOW WHAT DO TO HELP YOUR COUNTRY OUT THEN DO IT SAY IT! AND QUIT WISH OUR PRESIDENT FAILED. WHAT GOES AROUND WILL COME BACK BET THAT!!! SO MR OR MISS OR MRS SMART A** HELP THE PRESIDENT SUCCEED . THE PRESIDENT IS TRY SO HARD TO WORK WITH ALL OF YOU. IF IT WAS ME I WOULD TELL YOU WHERE TO GO AND HOW TO GET THERE.!!!!!!!
Kyle Wingfield
September 22nd, 2011
1:05 pm
Joe, I’m working my way back through the comments right now.
Rafe Hollister
September 22nd, 2011
1:08 pm
HDB, I’ve been out being productive, but you mentioned a recession in 2001, well, that has to be a Clinton recession, since Bush had only been in office one month. You don’t even hold Barry Oblamer responsible for this depression and he has been in office for nearly 3 years. Can’t have it both ways.
John
Two points, McCain was not the answer to any question I would ask. He was selected by indies and democrats. Two, you are speaking of TARP, that McCain rushed back to support. It was the beginning of the stupid stimulus programs, but since Bush came up with it, at least he required the money to be repaid, which it has. No such luck on Barry’s Porkulus bill, no money paid back, much money stolen and misappropriated, and no jobs created. The difference in the two stimulus bills, Republican created and Democrat created.
UGA 1999
September 22nd, 2011
1:10 pm
Sarah….see that is what you are not understanding. The president is doing his best to ensure America does not succeed.
Tiberius - Your lightning rod of hate!
September 22nd, 2011
1:11 pm
I’m wondering when people who type in all caps will realize that they are “shouting” and are being rude.
Joe the Plutocrat
September 22nd, 2011
1:12 pm
KW, save you time. you want to ban me, ban me. this is America; First Amendment and all that. I need to know if you are opposed to certain words, the concepts they represent, or *’s. are you telling me words like “idiot” (barry’s personal favorite) and the aforementioned SOB are somehow less offensive? for the record, I find them more offensive, because they reveal a cowardly parsing or semantic ruse, which is typical of bloggers of that ilk.
Joe the Plutocrat
September 22nd, 2011
1:12 pm
YES, I DO
Rafe Hollister
September 22nd, 2011
1:13 pm
Sarah, I can’t really believe you really feel Barry is sincere. If Michelle would have donated the money she spent on her latest new bracelets, $42,000 diamond encrusted, she could have gotten two or three poor kids out of those horrible DC public schools and sent them to school with Shashia and Malia.
UGA 1999
September 22nd, 2011
1:13 pm
Uh Oh….Joe is spouting the constitution! HAHAHA
John
September 22nd, 2011
1:15 pm
Lil’ Barry Bailout (Revised Downward)
By your definition, we are all freeloaders. Who has not received any good or service from the federal government (public education, police, fire, highways, gas, the list goes on) paid for by taxpayers.
UGA 1999
September 22nd, 2011
1:16 pm
John….Didnt we pay in to receive those services? So they are not free.
Not so fast...
September 22nd, 2011
1:18 pm
1. This billionaires became billionaires with the help of this country and its laws… Time for them to pay a little back.
2. If tax cuts for millionaires create jobs, how many jobs are the Bush tax cuts creating right now?
I say it’s time to go back to the Clinton era tax rates and fix this broken country. It’s going to take all of us… not just the middle class.
Tiberius - Your lightning rod of hate!
September 22nd, 2011
1:19 pm
“this is America; First Amendment and all that.”
And if you wish to say absolutely everything you wish to say, you may start your own blog and do so.
Otherwise, this is Kyle’s blog on the AJC website, and First Amendment rights do not apply to you.
UGA 1999
September 22nd, 2011
1:19 pm
Not so Fast….the fed is waiting on you to send them your check anytime now. Feel Free.
Tiberius - Your lightning rod of hate!
September 22nd, 2011
1:20 pm
If only people on the left and right would realize that tax rates alone (either higher or lower) will never dictate what an economy will do, we’d be much better off.
John
September 22nd, 2011
1:21 pm
Rafe Hollister
“No such luck on Barry’s Porkulus bill, no money paid back, much money stolen and misappropriated, and no jobs created.”
Did the financial industry, bailed out by Bush, pay back every penny? Didn’t Chrysler and GM pay, at least some, back? Remember Bush bailed out the financial industry which caused all this mess in the first place.
UGA 1999
September 22nd, 2011
1:21 pm
John….YES!
UGA 1999
September 22nd, 2011
1:23 pm
John….bailing out the financial industry is NOT what caused this mess. How can someone be so ignorant???
John
September 22nd, 2011
1:28 pm
UGA 1999
We all pay into the government…some more than others.