Taxes on rich may bring revenue, but it won’t fix deficit
As Americans take a collective breath after the annual April 15 Tax Day turmoil, President Barack Obama is leading a charge to raise taxes on the rich as part of his wider campaign strategy.
In presenting his deficit reduction plan on April 13, President Barack Obama took the initiative in suggesting wealthy Americans be required to pay more to support their country.
In December I agreed to extend the tax cuts for the wealthiest Americans because it was the only way I could prevent a tax hike on middle class Americans, Obama said. But we cannot afford $1 trillion worth of tax cuts for every millionaire and billionaire in our society. And I refuse to renew them again.
The president also said his budget calls for limiting itemized deductions for the wealthiest 2 percent of Americans, and asked Congress to reform the individual tax code and the corporate tax code.
Following the presidents speech, raising taxes on the rich quickly became a popular battle cry. While raising taxes is normally a risky political move, the president has taken a fairly safe course in targeting the wealthiest Americans.
CNN data and a 2010 Credit Suisse Wealth Report show there arent enough millionaires and billionaires for this strategy to have an impact in the voting booth. Also, as CNN points out, promising low taxes for 98 percent of the country will help Obamas campaign appeal to many.
The Christian Science Monitor said the speech was meant to play to Obamas liberal base, and that it succeeded, citing New York Times columnist Paul Krugman's reaction. The speech garnered praise from Krugman who said it was a reaffirmation of American compassion and community, coupled with fairly realistic numbers.
Unemployment remains at nearly ten percent, the highest level in almost 30 years; foreclosures have forced millions of Americans out of their homes; and real incomes have fallen faster and further than at any time since the Great Depression, Robert Lieberman writes in a recent Foreign Affairs article. And yet a curious thing has happened in the midst of all this misery. The wealthiest Americans, among them presumable the very titans of global finance whose misadventures brought about the financial meltdown, got richer. And not just a little bit richer; a lot richer.
While Fox Businesss John Stossel and Kevin Williamson at National Review refute this using data from the IRS and Pew Charitable Trusts, these and other criticisms havent stopped the tax the rich mantra from catching on.
An April 7 report from the Institute for Policy Studies says that the averted government shutdown and proposed austerity changes are unnecessary, if the U.S. would shift the tax burden to the rich and make income less concentrated at the top.
A The Huffington Post article claimed the Bush tax cuts cost the government about $120 billion. A second article called for a wealth tax to be applied during the immediate financial crisis and other emergencies. Yet another Huffington Post columnist suggested that the Alternative Minimum Tax should be used to help the rich put their money where their mouths are.
ABC News wrote Sunday that taxes for the rich were falling, and that the wealthy could look forward to paying significantly less than they would have two decades ago. A group calling themselves Patriotic Millionaires wrote a letter to Congress pushing for them to raise their taxes. The New York Times says rich people dont realize theyre rich, which is why theyre unwilling to pay more in taxes.
In a Bloomberg article, AFL-CIO claims that runaway CEO pay could support 102,000 jobs. (Although, Human Events points out, using AFL-CIO President Richard Trumkas own standards, one years worth of union dues could support 265,477 jobs.)
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