On Monday, President Obama announced his plan for a Buffett Tax on the people making more than $1,000,000 per year. The tax would hit only 0.3% of taxpayers, or fewer than 145,000 of Americans. The Administration wants to have the Buffett Tax replace the current Alternative Minimum Tax, which is now negatively impacting the middle class.
Of course the Republicans jumped all over this, as expected, claiming that the new tax would cause job creation lossess by discouraging investment by the people affected. How ludicrous a stand? For the past three years without this kind of tax who’s creating jobs or not investing in small, medium and big business? As usual the cry from the right lacks any kind of economic sanity.
In fact, if the tax is constructed well, that is, levied on incomes rather capital gains or dividends, it should actually promote investment. Instead of taking huge salaries, powerful executives and small business ownerswill be encouraged to reinvest the money in their companies instead. Duh!?! As you know the bulk of those who doth protest these things base their criticism on right wing rhetoric not on economic principals.
So the question remains how much will this new tax or tax realignment help the economy, lower the huge debt the country is saddled with, and what other benefits might the economy gain from the Buffett Tax?
Well to begin to answer the question you have to start understanding that at the moment the Buffett Tax concept is nothing more than that. At first blush, it is clearly a politically motivated program to help Obama stay in the White House after the elections next year.
According to the Frum Forum yesterday, “The “Buffett Tax” is the stuff of great fiction. The rate and the calculation are in the eyes of the beholder. This is brilliant politics because the Buffett Tax is impossible to analyze or explore without specifics.”
Obama wants the super committee of six Democrat and six Republican lawmakers to include the Buffett tax because they must find at least $1.2 trillion in deficit savings before the end of the year to avoid painful automatic cuts, and is mandated to seek savings of up to $1.5 trillion.
Meanwhile our crack Republican legislators are keying up to cut anything that resembles ‘tax’ from the ultimate recommendations from the super committee.
What all of this boils down to is pure and simple political warfare. With Congress’ approval rating down to 12% with most of the low rating targeting the GOP something has to give in order for the GOP not to suffer huge defeats next year by a totally pissed off electorate.
As the coming months will show, the unrest by a growing number of young people, the ongoing and growing unemployment pool, the sagging economy most of the blame will go to the Republicans….Obama will be a shoe-in, in spite of the bad economy he inherited from the last administration.
”I know what I believe. I will continue to articulate what I believe and what I believe — I believe what I believe is right.” President George W. Bush, Rome, Italy, July 22, 2001