Tax Now, Tax Later
For months, (years, really) conservatives have been arguing that raising taxes on people making more than $200,000 and families making more than $250,000 makes for bad economics. And calling them “millionaires and billionaires” is disingenuous and false. Liberals have come up with a solution: only raise taxes on those making $1 million dollars or more.
But is this any better?
Senate Democrats apparently know that $250,000 does not make someone a millionaire or billionaire, and the fact that they’re finally willing to admit that is welcome. But raising taxes on the some 260,000 Americans who make more than $1 million dollars in order to pay for a $447 billion second stimulus that will not help create (or support) the 1.9 million jobs President Obama claims. Raising taxes on employers and consumers is the last thing this economy needs, a fact President Obama claimed to understand as a candidate.
With the failure of the last stimulus, why should this small percentage of the population be asked to shoulder the full burden of wasteful spending. Why should anyone be asked to shoulder the burden of more wasteful spending? President Obama can claim it will put construction workers and teachers back to work all he wants, but the fact is that – if this bill passes, which it won’t – those jobs will be lost when the money runs out because the states still won’t be able to afford to pay those salaries.
Back to Senator Harry Reid’s (D-NV) “millionaire’s surtax” – it’s actually not new. It was tried in Michigan in 2007. Guess what happened? Wealthy Michigan homeowners and businesses fled the state. They haven’t exactly recovered.
Now, taxing all millionaires and billionaires at the federal level means job creators can’t exactly move to states to avoid the tax, but with the added burden of this tax could certainly alter behavior in other ways: less consumption, less investment, less expansion and less hiring. Liberals like to argue that this 5% tax would move tax rates just slightly higher than the Clinton-era rates, but looking at our economy it is clear you cannot compare the 1990’s to our current decade.
What Senator Reid and other big-government liberal want is to, essentially, raise taxes on successful job creators permanently to create temporary jobs now. At best, it will create those disappearing temporary jobs and, at worst, it will cause further uncertainty among the very job creators which will be less productive or sit on their money so that it can’t be taxed.