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LAMBRO: Obama digs up dead tax hikes
Unearthing the blame-the-rich shibboleth is useless economic strategy
Question of the Day
Once again, Barack Obama proposes to raise job-killing taxes on a weakening economy, one that has all but stopped growing under his 1930s-style policies.
In a confused presidency whose policies have zigged and zagged more times than the stock market, Mr. Obama can’t seem to decide what his policy should be, changing its direction and its prescriptions from one year to the next or, more aptly, from one political strategy to another as his job-approval polls have continued to plunge.
He came into office on a crusade to repeal George W. Bush’s tax cuts for upper-income Americans, though not the former president’s middle-class and low-income tax cuts. But as the economy worsened under his so-called stimulus plan and unemployment rose, he gave in to GOP pleas at the end of last year that this was no time to raise taxes on an economy struggling to get back on its feet.
He changed course reluctantly, agreeing to temporarily extend all the Bush tax cuts - but only after Republicans toppled the Democrats from majority control in the House, reduced their numbers in the Senate and were coming after Mr. Obama to stop his big spending binge.
The president was driving the government deeper into debt and proposing even higher spending until the GOP threatened to block the debt-ceiling increase if he did not agree to major budget reductions. The battle raged for months until Mr. Obama blinked again, agreeing to $1 trillion in spending cuts and another $1.5 trillion in savings to be worked out by a joint House and Senate panel this year.
Meantime, the economy worsened, the base of his party became dispirited and disappointed with his presidency, and polls revealed an erosion of support among his most die-hard allies, including minorities, who suffered from the highest unemployment rates in the country.
Now, with his overall job-approval polls sinking further in recent days to between 39 percent and 40 percent and fresh signs the economy could fall into another recession, Mr. Obama has come forth with his answer to spending cuts, soaring debt and a declining economy: Raise taxes.
There wasn’t anything dramatically new in his tax plan. He had offered it in 2009 - when many Democrats shied away from it - and since. It again calls for repealing the Bush tax cuts for higher-income taxpayers and raising the present 35 percent top tax rate to nearly 40 percent.
Notably, income earners in and above that range are small-business people, the source of most of the jobs in our country. They are struggling in this economy to stay alive, and higher taxes would drive them and the jobs they create out of business.
Mr. Obama also calls for levying a new, higher tax on the people who invest in our economy the most, who happen to be among the wealthiest and whose investments are critical to new job creation. The capital gains or dividends those investments yield are taxed at 15 percent, but that rate applies to any and all who invest in stocks and other equities. We need to encourage capital investment, not discourage it, which Mr. Obama’s higher taxes would do.
“The rest of the president’s tax plan was largely a repackaging of previous proposals,” The Washington Post said. That includes taxes on the oil industry, private-equity managers and fewer charitable tax deductions at a time when charitable food banks are needed more than ever.
To Mr. Obama, this is really all about getting more money to spend, but the fiscal reality is that it will suffocate job creation and hurt ordinary Americans.
His nearly $500 billion plan to resuscitate the economy with even more infrastructure spending fell with a thud on Capitol Hill, where legislators are trying to figure out how to cut spending, not increase it.
So he fell back on an old axiom of Democratic politics and played the class-warfare game that stirs the juices of his party’s liberal rank and file - saying “millionaires and billionaires are not paying their fair share” in taxes.
That assertion, repeated throughout his presidency, is false, but apparently the nightly network news programs aren’t willing to call up the folks at the Internal Revenue Service (IRS) and ask, “Is this true?”
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