Obama calls for tax hikes in tough economic times
As sure as the sun rises in the east and sets in the west, President Barack Obama wants to raise taxes. At the White House yesterday, Obama again repeated his call to extend current tax rates for anyone making under $250,000, but taxpayers making over that amount would, under his proposal, see their taxes go up to pre-2001 levels:
In a White House statement delivered while people described as working Americans stood behind him, Obama said his proposal would provide the certainty of no tax increase next year for 98% of Americans.
Noting that Republicans seek to maintain all of the Bush tax cuts enacted in 2001 and 2003, Obama said both sides therefore agree on extending the lower rates for middle-class families.
“Let’s agree to do what we agree on, right?” Obama said to laughter and applause in the East Room. “That’s what compromise is all about.”
The White House also let it be known that President Obama would veto an extension of all current tax rates, which is what House Republicans prefer and will likely pass in the coming weeks. Sorry, but the White House is not compromising. And while Obama is determined to raise taxes, some Senate Democrats, particularly those in tough bids for re-election, may not be willing to go along with his plan. Obama is essentially hanging them out to dry here.
But with the economy moving at a sluggish pace and job creation that is just as tepid, we should turn to comments made by President Obama in 2010, when he signed an extension of the 2001 and 2003 tax cuts. In 2010, when the economy saw GDP growth of 3.1%, President Obama said, “If we allow these taxes to go up, the result would be that a lot of people most likely would spend less, and that means that the economy would grow less.”
But here we are in 2012, economic growth has increased by only 2%, and President Obama will, if he gets his way, raise taxes on some 900,000 small business — job creators who own businesses making more than $250,000 a year, but file their earnings as a S-Corp or sole proprietor.
Obama is running against Mitt Romney, a rich guy who opposes raising taxes on anyone. So the game is pretty clear. This is about class warfare, which has been the modus operandi of Obama since he came on the scene in 2004.
Interestingly, the extension of the lower and middle class tax cuts is only temporary. They would expire at the beginning of 2014, when they would jump to pre-2001 levels, assuming that Congress didn’t extend them again. And, as Ed Morrissey notes, a one-year extension isn’t a lot to get excited about:
[T]he Champion of the Middle Class proposes to exchange the tax hike on people making $250K for … what? A one-year extension of the Bush-era tax rates for people earning below that level. That’s actually a worse deal than Obama proposed in 2010 and 2011. In fact, it’s a worse deal than the two-year extension on all tax rates Republicans won after Democrats got skunked in the 2010 midterms.
A one-year extension won’t convince middle-class earners to invest their money or take more risks. All it will do is confirm that Obama plans to hike taxes on the middle class in a second term. If not, why propose a one-year extension rather than proposing making the Bush-era rates on those earners permanent?
Like the Buffett Rule and other economic gimmicks pushed by President Obama, this is a shell game. Those of us following the debate over extending the tax cuts in 2010 knew that this was coming, regardless of whether or not the economy improved. If Obama gets his was, small business owners will tax the brunt of his policy, but he doesn’t care. The politics of wealthy envy are what he thrives on.
As Martin pointed out yesterday, Obama is gambling with our future by choosing to play political games instead of doing what is best for the economy; what he did just two years ago when he extended the tax cuts.