President's plan to tax "the wealthy" will backfire on the middle class

In 2009 President Obama told us he would wait until after the recession ended before he raised taxes. “The last thing you want to do is to raise taxes in the middle of a recession, because that would just suck up—take more demand out of the economy and put businesses in a further hole,” he said at the time.

But like most of the president's promises, he broke this one earlier this week when he announced he would extend the Bush tax cuts only for the middle class, while allowing big tax hikes on the "wealthy", which would affect about 1.2 million job creators. Increasing expenses on job providers during a stubbornly resistant recession with millions of Americans still out of work is not good timing, it's not good economics, it's not good policy.

By his own words, Obama shows a stunning lack of understanding on how things work. "I believe our prosperity has always come from an economy that’s built on a strong and growing middle class," he said, "...one that can afford to buy the products that our businesses sell; a middle class that can own homes, and send their kids to college, and save enough to retire on."

But therein lies the problem. With higher tax bills, the job providers are less likely to hire and more likely to downsize on the very jobs the middle class depends on to buy products, own homes and send their kids to college. 

The President's definition of what constitutes "wealthy" is in itself pretty extreme. To him, an individual making $200,000 or a family making $250,000 are what he considers wealthy. Anyone with a mortgage, mouths to feed, college tuitions to pay, clothes to buy and car payments to make would probably likely tell you that even $250,000 goes pretty fast. But to this president, it's only fair these "wealthy" people pay their "fair" share. It doesn't matter to him that this group of people is already paying the vast share of the taxes, while about 49% of lower income workers pay zero federal income taxes.

As reported by the Heritage Foundation, "President Obama is to the left of his liberal allies in Congress such as Senator Charles Schumer (D–NY) and House Minority Leader Nancy Pelosi (D–CA) on the definition of the 'rich.' Schumer and Pelosi set the mark at as those making more than $1 million annually. That is five times higher than President Obama’s $200,000 mark. Apparently even they recognize the President’s plan would be too punitive on job creators (although they are still willing to stick it to the most successful job creators for the sake of class warfare)."

Beyond the President's self-declared threshold of wealth, Americans at all income levels are actually facing a $494 billion tax increase beginning January 2013 (and that's in addition to the massive ObamaCare tax that was just upheld by the Supreme Court). These tax hikes will hurt Americans at all income levels, not only directly in their pockets, but because they will slow job creation, especially among small businesses.

Even CNN just reported that Obama's tax hike on the "rich" could slow down the economy by one percent. With an economy that's barely moving at all as it is, how can even this much of a slow down possibly help the middle class? But as long as the rich are getting it socked to them, who cares how it affects the middle class, right?

President Obama repeatedly says his plan will only raise taxes on “the rich” to force them to pay their “fair share.” But a tax increase resulting in less job creation that makes it harder for unemployed Americans at all income levels to find new jobs and puts those with jobs at risk of losing them doesn't seem to be very fair. But what's most alarming is how many people in the middle class who stand to be detrimentally impacted by these tax hikes are cheering the president on to "sock it to the wealthy". Unfortunately, the non-wealthy will be the ones ending up with the black eye.

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