Obama’s tax plan is just a political game in an election year
President Obama wants to make this election about class warfare—tax increase on the rich—to divert voters’ attention away from the main issues of economy and (lack of) jobs.
With almost 98% of people (which can translate to 98% of voters) making less than $250,000 a year, Obama wants to extend Bush tax cuts for this group while pushing the lower rates for the top 2% to expire next year.
Obama claims that his tax plan will help lowering the deficit.
Does it really? If it’s passed, this tax plan can only generate about $85 billion more in tax revenue—about 6% of his $1.327 trillion deficit this year.
On the other hand, in his 3 years, Obama has added a net of over 130,000 federal employees—at an estimated cost of over $13.9 billion a year. (I don’t believe this administration is any more effective than the previous administration, so this addition is just wasteful and his way to create jobs)
This tax plan is just a political game:
—knowing Republicans and Romney will not vote for any tax increases, Obama pushes his tax plan in order to use it to attack Romney/GOP as a party of the rich and a party of “no”
—Obama wants the “98%” to think that he is for them. But what he fails to admit is that many of the people making over $250,000 are small business owners who may have to cut back on jobs if facing higher tax rates. Who will be hurt most? Who will need these jobs most? The answer is the “98%” group. Also, included in the group making over $250,000 are small farmers who would need to raise their product price to match the higher tax rates. Who will be hurt most by higher grocery price? Again, the answer is the “98%” group who live paycheck to paycheck.
(By the way, I don’t believe making over $250,000 will make a person/household rich. So Obama is misleading on his “tax the rich” slogan. To be rich, one would need to make over $750,000 in my opinion)
Why is it not good to raise taxes?
Even Democrats who are in tight election race would want to vote for a tax increase.
Former President Clinton claimed that Obama’s approach to reducing deficit by raising taxes “is a little confusing.” He explained that raising revenue in an economic slowdown situation would be a counter-productive to growth.
Quote from Bill Clinton…
“I personally don’t believe we ought to be raising taxes or cutting spending until we get this economy off the ground. If we cut government spending, which I normally would be very inclined to do when the deficit’s this big, with interest rates already near zero you can’t get the benefits out of it.”
(Cutting spending = slam on the Republicans)
(Raising taxes = slam on Obama)
Again, raising taxes is not a good idea:
—small business owners will have to cut jobs in facing higher tax rates
—product costs will go up: think of the farmers, merchants, small shop owners will need to raise prices on their products to make up for higher tax expenses
The bottom line…
—Obama is claiming that raising taxes to make the “rich” paying a fair share.
Based on 2009, the top 1% group pays an effective rate of 24%. The top 5% group pays an effective tax rate of 20%. The bottom 50% pays effective rate of 2%—bottom 48% pays no tax at all.
What is definition of fair share? Who defines it?
—the bottom 98% group will be hurt most when jobs are lost and product prices are raised.
—for any new $1 of tax income, Washington DC will manage to spend $1.07