Wednesday, July 11, 2012

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, " 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.

Want to see how the tax hikes will impact you?  Click here.

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  1. Jeff/Sterling Hghts.July 13, 2012 at 2:00 PM

    It astounds me how so many in the middle class are showing such jealousy over those who may have more money than they do. They want to punish the successful, even though many of these successful people are small business owners and other job providers. The thing is, how does someone else's success hurt me? The last time I looked at my paycheck, the only one taking any money out of it was the government, not a business person. And you could take every single dime of the top billionaires in america and it wouldn't make a dent in our trillion dollars deficit that Obama wants to keep adding to! Wake up people. Stop being jealous. Stop wishing for harm to come to others so you can feel better about your own life. Class warfare is not the American way. Besides, with this president's attitude, why should any of us try to achieve success? All that waits for us is hatred by this man who thinks working hard and gaining success is evil. Be careful what you wish for. Punishing hard work is bad for everyone. Think about it.

  2. Brilliant research and articulation!!!

  3. I'm curious - do you want to see that 49% pay more in taxes? You seem disturbed that they aren't paying anything but the rich are paying a lot, but the tone of the rest of this seems like you don't want taxes to increase on the middle class.

    So the poor should pay more and the upper/middle class pay less? Is that accurate? I just want to understand your point more clearly :)

    1. Dan, I guess you don't understand what Julie is saying or what Obama is trying to do. Obama is suggesting a tax increase on those who are already paying most if not all of the federal income taxes. Julie is stating this is not the time to do it and that the Obama proposal would have a detrimental effect on everyone including those who are in need of jobs. Obama keeps saying it's a tax cut for the rich when in truth all that conservatives are suggesting is that the tax rate stays where it is. Why is it that some people can't understand that?

  4. Dear Dan...the on-going argument has been that the "rich keep getting richer" and we must tax the "rich." What Ms. Szydlowski's blog is saying is that the rich in Obama's eyes are actually the middle class...and raising our taxes will pay for the poorer classes!

  5. It's simply that all we hear is that the "rich" don't pay their "fair share" when in actuality they pay the most in taxes while about 50% pay nothing in fed income tax so I think all Julie is saying quite clearly is that let's stop saying the "rich" should pay more, their "fair" share when they're already paying more than anyone while half pay nothing. she's not saying that half should pay something, just that it's obvious that the argument that the "rich" aren't paying their "fair" share is ridiculous since they're already paying so much.