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
UGA 1999
September 22nd, 2011
1:29 pm
John….agreed…some much more than others.
John
September 22nd, 2011
1:30 pm
UGA 1999
The bailout did not cause this mess…the financial industry, which was bailed out, caused this mess.
HDB
September 22nd, 2011
1:30 pm
UGA 1999
September 22nd, 2011
1:23 pm
What caused this mess IS multiple in fault…..
1) Repeal of Glass-Stegal by Phil Gramm
2) Weakening of Congressional oversight
3) S&L Scandal of the 80s
4) Deregulation of certain industries
Much can be traced to Republican ideologies…although blame is BOTH sided in nature and scope….
UGA 1999
September 22nd, 2011
1:31 pm
John….among many other things as well. Why do you guys always blame the financial industry for the mess. What about the parasites that took out loans that they knew they could not afford?
Joe the Plutocrat
September 22nd, 2011
1:31 pm
Tiberius, and as you are not Kyle, an employee of Cox Enterprises, Constitutional Law expert, or a member of the thought police; I have no interest in your armchair opinions (related to me). feel free to continue to post whatever political comments you like.
UGA 1999
September 22nd, 2011
1:33 pm
HDB….nice selective memory you have. Your share the same character flaws as your messiah Obama.
Rafe Hollister
September 22nd, 2011
1:34 pm
John, yes the financial industry and banks paid back the TARP. No, Gov Motors and Chrysler have not paid back all of the money Barry gave them. They did pay their union debts however.
Joe the Plutocrat
September 22nd, 2011
1:35 pm
UGA 1999, but it did contribute about $800 billion/$1 trillion to the national debt. actually, “us guys” don’t blame the financial industry for the mess, we blame the financial industry for talking about capitalism, and risk/rewards, and prudent judicious investment of capital (its own, and that of the shareholders); but crying “too big to fail” when it’s reckless spending and poor business decisions ran amok.
Tiberius - Your lightning rod of hate!
September 22nd, 2011
1:36 pm
Joe, I don’t need to be any of those things in order to point out that your so-called First Amendment rights end at Kyle’s doorstep.
So take your poutrage and . . .
larry.333
September 22nd, 2011
1:36 pm
WHAT IF RICK PERRY WIN THE NOMINATION??
HOW WOULD THE JOB FUTURE LOOK??
RICK PERRY,THE JOB CREATOR !!
FOR WHO?????
Study: Most new Texas jobs went to immigrants
Of jobs created in Texas since 2007, 81 percent were taken by newly arrived immigrant workers (legal and illegal),” says the report from the Center for Immigration Studies, a group that advocates reduced levels of both legal and illegal immigration. The report estimates that about 40 percent of the new jobs were taken by illegal immigrants, while 40 percent were taken by legal immigrants. The vast majority of both groups, legal and illegal, were not American citizens.
http://campaign2012.washingtonexaminer.com/blogs/beltway-confidential/study-most-new-texas-jobs-went-immigrants
UGA 1999
September 22nd, 2011
1:37 pm
Joe….$800billion/$1 Trillion is what Obama spends before he eats breakfast.
So now you have a problem with capitalism?
Tiberius - Your lightning rod of hate!
September 22nd, 2011
1:37 pm
“What caused this mess IS multiple in fault…..
1) Repeal of Glass-Stegal by Phil Gramm
2) Weakening of Congressional oversight
3) S&L Scandal of the 80s
4) Deregulation of certain industries”
Well, you got ONE right.
Otherwise, not so much.
Joe the Plutocrat
September 22nd, 2011
1:37 pm
UGA 1999, I mentioned this early, perhaps to you. GOOGLE Gary Johnson (underdog libertarian participating in tonights GOP debate). check out what he said about the contemporary GOP (and how he refuses to venerate Reagan, as in his opinion, Reagan started this mess).
UGA 1999
September 22nd, 2011
1:40 pm
Joe….there is a reason he is an underdog. Any nut can share their opinions, everyone has one.
Joe the Plutocrat
September 22nd, 2011
1:41 pm
Tiberius, agree to disagree. rights either exist, or they do not. as I said, if Kyle wants to ban me, he is within HIS right as blog moderator/hall monitor, but his right as an ajc columnist and my rights under the First Amendment are mutually exclusive (because as you have noted, I can simply start my own blog, or use post my ideas on other blogs). for the record, you take on “what caused this mess” is worthy of a compliment.
Kyle Wingfield
September 22nd, 2011
1:41 pm
Joe: I don’t want to ban you. If I did, you’d be banned, as a number of other ex-commenters could attest.
I don’t make all the rules around here, and the rules on profanity apply to every blog on this website. Nor do I impose many of my own rules on those who wish to comment here. But I do intend to enforce the ones that exist. Sometimes I let that slip a little bit. I’m giving everyone fair warning that there’s going to be more enforcement in the coming days.
And I happen to agree with you that non-profane name-calling is just as offensive as the profanity, or at least just as worthless. Libtard, Rethuglican, Dummycrat, you name it — they all reveal a childishness on the author’s part. But I choose to let people reveal themselves as childish thinkers — up until the point they break one of the rules.
And those rules, for anyone who’s forgotten or never read them, are here: http://blogs.ajc.com/kyle-wingfield/2009/11/11/some-rules-for-this-blog/
HDB
September 22nd, 2011
1:43 pm
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.”
The IT bubble popped right before 9/11…in August…..a full 7 months after Clinton left office!! As an IT professional, I was in the middle of it…then 9/11….and over 25,000 people at my then-employer (United Airlines) were laid off!! Are you conservatives fond of saying that the officeholder OWNS the economy???
“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.”
The results of this depression ORIGINATED in the Bush Years….and it’s evident that the GOP is doing EVERYTHING it can do to sabotage a possible recovery! Yes, Obama owns it now…..but it also takes CONGRESS to get things working…and the GOP/Tea Party isn’t helping!! Since Obama has been elected, I’ve begun to recover the income that I LOST in the Bush Years!!
UGA 1999
September 22nd, 2011
1:33 pm
“HDB….nice selective memory you have. Your share the same character flaws as your messiah Obama.”
Not selective…factual!! Check your history…and you’ll see that Republicans were in control when the national economy went into turmoil!!
Steve From Dalton
September 22nd, 2011
1:44 pm
what got us in the mess we are in was a little piece of Legislation from 1997 called the “Mortgage Reform and Anti-Predatory Lending” This led to No income no assest (NINA). one of the co-sponsers was Barney Frank-The same Barney Frank that was behind the Frank-Dodd bill that further complicated matters.
Joe the Plutocrat
September 22nd, 2011
1:46 pm
UGA 1999, what caused the meltdown and the bailouts were anything but capitalism. surely they taught you as much at UGA? laws, by definition are “regulations” so the regulation vs. dergulation canard means nothing in any “market” save complete anarchy (in which case, guns generally trump butter, as it were). re: Johnson, interesting you refer to him as a “nut”. all this “nut” did was build a $150 million construction business from scratch, become a GOP governor in a 3/2 Democratics state, reduce the number of civil service jobs, while private sector job growth INCREASED, AND he vetoed over 700 spending bills sent to his desk; 1/3 which were sent by GOP lawmakers. yeah, keep dismissing “nuts” like Johnson and keep venerating deficits don’t matter faux conservatives like Reagan and Bush.
UGA 1999
September 22nd, 2011
1:47 pm
HDB…then by your calcuations the GOP would have the presidency now. Correct? Are you saying that Obama is a repub?
UGA 1999
September 22nd, 2011
1:49 pm
Joe….Johnson sounds like one of the evil rich. haha. Too bad he will never have a shot at getting in the white house. Hmmmm I wonder why?
HDB
September 22nd, 2011
1:50 pm
Tiberius – Your lightning rod of hate!
September 22nd, 2011
1:37 pm
Please show me where I was wrong….
1) Repeal of Glass-Stegall by Phil Gramm (GOP) – that allowed investment banks carte blanc and no oversight by financial regulators….now no Lehman Brothers, Bear-Sterns…..and a near-collapse of the financial industry and the US economic system….
2) Weakening of Congressional oversight – by Congress’s ddsire to deregulate, they also ELIMINATED much of the industry oversight…and ENFORCEMENT of statutes……
3) S&L Scandal of the 80s – Charles Keating, Neil Bush….this was the precursor of what happened in 2007……
4) Deregulation of certain industries – note the price INCREASES of natural gas and certain utilities since deregulation.
Desire enlightenment, please……
HDB
September 22nd, 2011
1:53 pm
UGA 1999
September 22nd, 2011
1:47 pm
“HDB…then by your calcuations the GOP would have the presidency now. Correct? Are you saying that Obama is a repub?”
Obama is more of a centrist than a liberal! In some cases, he’s floundered…but in others, he’s done well! When Republicans state that their mission os for Obama to be a “one-term President” while simultaneously IGNORING national issues, I wonder WHO’S the antagonist….and who’s the national defender!! It’s been REPUBLICAN ideology that has the economy screwed up…..and an ENLIGHTENMENT is needed — for BOTH parties!!!
UGA 1999
September 22nd, 2011
1:54 pm
DOW has plunged 400 point thus far today. NICE>
LAllen
September 22nd, 2011
1:55 pm
With incorrect visions of the past, perhaps we should give people advocating tax increases and screaming about the “Bush Tax Cuts” exactly what they want. Let us let the 2001 tax cuts completely expire (not just in part, but completely since the argument is that the prior tax rates produced a balanced budget) – which they will do at the end of 2012 absent new legislation. And before everyone shouts for joy, keep in mind that for a working couple earning $105,000 per year, their tax rate will jump from the current 25% to 31% (costing them thousands), and couples earning $158,000 per year will see their rate jump from 28% to 36% (impacting them even more). Of course, for those couples earning less than $100,000, the financial devastation is even greater – but who cares if people are hurt by the increases, won’t it balance the budget, clean the air, restore our place in the world, and bring about the Second Coming??.
Joe the Plutocrat
September 22nd, 2011
1:55 pm
Steve from Dalton, the Mortgage Reform Act got the ball rolling, but it is merely a slice of the larger pie. Banksters are not stupid. When said bill was passed, they lobbied (literally) to protect their interests (making money). My guess is, they then went back to Dodd, Graham, Frank, Shelby, and the Senate Banking types adn said; “…well, if we have to lend to high risk borrowers, you need to repeal GLass Stegal, and losen the derivatives trading regulations (Commodities Furtures Act of 2000) so that we can “earn” money from the bad loans we both know we will have to approve.” this deregulation of the mortgage market invited mortgage fraud, speculation and rapidly inflated a huge (I think the number is $ 9 trillion) asset bubble in housing, and when the time was right, a handful of folks on Wall Street and within the banking oligarchy known as The Federal Reserve) ended the game of musical chairs, and John Q. Public was left without a chair.
John
September 22nd, 2011
1:57 pm
UGA 1999
“What about the parasites that took out loans that they knew they could not afford?”
Are you talking about the parasites (in the financial and housing industry) who preyed on these people? I’m not an expert in the housing market, so when I bought my home I counted on the experts (my realtor, mortgage broker, home inspector, appraiser, etc) to educate me and help me understand it all…from what I can afford to trends, etc. I made a sound choice only because I had good people steering me in the right direction. There were some unscrupulous practices going on for quiet some time and lots of money being made until it all imploded.
UGA 1999
September 22nd, 2011
2:03 pm
John….haha always playing the victim. I forgot the criminal financial executives made the poor little folks sign for contract they could not afford. You say you rely on realtors, and brokers to help you make your decisions. Many people did any got BURNED! Here is an idea, educate yourself and make sound decisions for yourself. Then if you fail you have NO ONE to blame.
Lil' Barry Bailout (Revised Downward)
September 22nd, 2011
2:05 pm
Just a thought–it’s going to be kind of tough for you to argue that someone paying in the mid-five-figures in income taxes is a freeloader. Making that case against the free-cell-phone crowd is juuuust a bit more reasonable.
UGA 1999
September 22nd, 2011
2:07 pm
John….so I guess by your point of view the execution of Troy Davis yesterday was the fault of the police and judicial system? He had no blame.
Bill
September 22nd, 2011
2:13 pm
Barry, I asked you about ethics and morality and your responded with what you think is good business. Of course, you had to throw in and insult at the end.
Joe the Plutocrat
September 22nd, 2011
2:13 pm
UGA 1999, listen to John and you might learn something. with the repeal of Stegal Glass and the Commodities Futures reform act, the value of a mortgage (to a lender) was no longer defined by the interest rate (we loan $150,000 with 20% down, and we collect 5.5% interest over the next 30 years). it became more profitable to write as many loans as possible, regardless of “risk” as the loans were quickly sold to Bear Sterns, Lehman, Merrill, et al; securitized and the new “AAA” investments were then sold to pension funds, hedge funds and other institutional investors. sure there were ill-advised borrowers who beleived they could flip a $400,000 home purchased with a 3/1 ARM and no money down, but whom do you think was ‘advising’ them to speculate on the housing market? it was the lenders.
Tiberius - Your lightning rod of hate!
September 22nd, 2011
2:13 pm
“Please show me where I was wrong….”
Gladly!
“1) Repeal of Glass-Stegall by Phil Gramm (GOP) – that allowed investment banks carte blanc and no oversight by financial regulators….now no Lehman Brothers, Bear-Sterns…..and a near-collapse of the financial industry and the US economic system….”
Partially correct. Blaming Phil Gramm and Phil Gramm (as well as the GOP) alone is not correct. Repeal had to go through a divided Congress to pass. 38 Democrat Senators voted with 52 GOP Senators on the repeal.
“2) Weakening of Congressional oversight – by Congress’s ddsire to deregulate, they also ELIMINATED much of the industry oversight…and ENFORCEMENT of statutes……”
Big whiff on this one. It was actually less the decrease in government oversight than it was a complete re-configuring of the investment game. What used to be a long-term, strategic market has been turned into a short-term, get-rich-quick, Vegas-style betting scheme. And guess who made this happen? Not Wall St., but MAIN Street with their desires to grow 401k and retirement monies faster and higher than previously thought of. This unleashed previously unheard of amounts of capital into a marketplace that didn’t need it and shouldn’t have used it.
“3) S&L Scandal of the 80s – Charles Keating, Neil Bush….this was the precursor of what happened in 2007……”
Old news. Just more Blame Bush Syndrome.
“4) Deregulation of certain industries – note the price INCREASES of natural gas and certain utilities since deregulation.”
Everything increases over time when government is involved with it. Deregulation merely slows the increases.
Now, what you missed was Fannie and Freddie buying all those sub-prime loans and selling them to investment firms, thereby flooding the market with bad paper. You missed the CRA which began, however slowly, the changing of the way banks were allowed to view risky investments. You missed a burgeoning national debt and deficit out of control. And the dozens of other reasons too numerous to detail here that all go together to affect a national and world economy.
But other than that, you were spot-on!
Joe the Plutocrat
September 22nd, 2011
2:16 pm
UGA 1999. what’s so funny about Johnson never getting a shot at the white house? me thinks you might benefit from some therapy. he’s a fiscally responsible, successful, open-minded person. you are the one who feels the need to attach the words evil and rich. and for the record, with a net worth in $100 million range, he is not “rich” he is wealthy. and did I note he supports abolishing the IRS and federal income tax in favor of a national sales tax?
Joe the Plutocrat
September 22nd, 2011
2:17 pm
UGA1999. let me guess, you want UGA to fire Mark Richt
UGA 1999
September 22nd, 2011
2:17 pm
Joe…did you really just say “me thinks”?? Joe, do you know the difference between being “rich” and “wealthy”?
Bill
September 22nd, 2011
2:19 pm
UGA, you are correct. The bailing out of the financial industry did not cause this mess. Deregulation of the financial industry led to the need for them to be bailed out. That is what caused the problem.
UGA 1999
September 22nd, 2011
2:19 pm
75% of Americans feel the economy is getting worse
41% of American approve of Obama’s work.
John
September 22nd, 2011
2:21 pm
Steve From Dalton
“what got us in the mess we are in was a little piece of Legislation from 1997 called the “Mortgage Reform and Anti-Predatory Lending” This led to No income no assest (NINA). one of the co-sponsers was Barney Frank-The same Barney Frank that was behind the Frank-Dodd bill that further complicated matters.”
No such piece of legislation in 1997 called that…do a google search and you’ll see for yourself…2007 yes but not 1997.
UGA 1999
September 22nd, 2011
2:22 pm
I think he meant 2007.
KyleKyleGoAway
September 22nd, 2011
2:22 pm
@uga1999 @ 2:07pm – that Troy Davis was executed is a failure of the judicial system (not to mention a collective moral failure and disgrace for all of us) since there exists at least a reasonable question as to his guilt. Whether or not he is to blame is completely irrelevant to the issue in question. I’m not even remotely surprised by your inability to make the distinction – you Georgians are a bloodthirsty lot (especially when it is a black man’s blood).
Bill
September 22nd, 2011
2:23 pm
HDB, I don’t think you can blame it all on Phil Graham, but you are correct. The gradual repeal of Glass-Steagal is the root cause of the problem. For 50 years, we had not major catastrophes in the financial sector. In the 80s, be began to deregulate, and by the end of that decade, we had the S&L scandal. In the aftermath of that deregulation we have also experienced one economic bubble after another. I am not suggesting cause and effect, but there is definitely a change in the pattern.
UGA 1999
September 22nd, 2011
2:27 pm
KyleGoAway….there was NO reasonable doubt. There were NINE witnesses and proof that he had shot someone else in the same night. DONE DEAL SLEEP TIGHT!
UGA 1999
September 22nd, 2011
2:27 pm
KyleGoAway….a black mans blood that killed a cop.
John
September 22nd, 2011
2:30 pm
UGA 1999
“John….haha always playing the victim.”
Did you read my post? Where did I say I was a victim? Just the opposite…I said I have good people who steered my in the right direction.
But tell me, if someone who is not an attorney gets bad legal advice from an attorney and follows that advice, do you blame the person receiving the legal advice or the attorney giving the bad advice? What about medical advice…patient’s fault for following bad advice from a medical expert?
UGA 1999
September 22nd, 2011
2:31 pm
John….I blame the person for going to a bad attorney. Easy answer.
Bill
September 22nd, 2011
2:31 pm
UGA, Then this act could not have been the cause, the damage was done by 2007.
ray
September 22nd, 2011
2:32 pm
i like the national sales tax idea, but rather 1 or 2 percent.
UGA 1999
September 22nd, 2011
2:32 pm
Bill….Hey I didnt say it did or didnt. I was just confirming the 2007 year.
Joe the Plutocrat
September 22nd, 2011
2:32 pm
looks like perhaps repeal of Steagal-Glass was encouraged by Clinton’s efforts, if not an actual piece of legislation:
The National Homeownership Strategy began in 1994 when Clinton directed HUD Secretary Henry Cisneros to come up with a plan, and Cisneros convened what HUD called a “historic meeting” of private and public housing-industry organizations in August 1994..