President Barack Obama is now proposing more government overspending by adding more tax increase of $1.5 trillion in new taxes designed predominantly at the wealthy as part of a $3 trillion package to reduce the national deficit.Republicans oppose tax increases and want responsible spending cuts to reduce America’s debt. I agree with the Republican base to oppose tax increases, but President Obama stands correct on a wealth tax. The issue is when should a wealth tax be initiated?
President Obama recently recommended to “a joint congressional committee,” the new taxes predominantly would hit wealthy Americans, ending their Bush era tax cuts and limiting deductions. Obama had is chance to end the Bush led tax cuts this past December 2010 instead he caved into political demands extending the tax cut and tax code until 2012. Republicans have insisted that tax increases should play no part in “taming the nation’s escalating national debt.”
The deficit cannot be reduced by spending cuts on government programs alone. Taxes on the wealthy, a wealth tax would generate billions of dollars applying those cost to the national deficit. The president’s plan calls for $2 trillion in deficit reduction over a 10 year period. It poolsthe new taxes with $580 billion in cuts to benefit programs, including “$248 billion from Medicare.” The reports also include savings of $1 trillion over 10 years for troop withdrawal from two failed wars.
The deficit reduction plan also includes the $447 billion in tax cuts and new public works spending that Obama has proposed as a short-term measure to stimulate the economy and create jobs.
One of Obama’s proposals would set a minimum tax on taxpayers making $1 million or more in income. Obama called the measure the “Buffett Rule” for billionaire investor Warren Buffett, who has spoken of the unfairness that he pays taxes at a lower rate than that paid by his middle class secretary. Because the wealthy should pay their fair share of taxes not skip out on paying because of a high income bracket.
At issue is the difference between a taxpayer’s tax bracket and the so called tax rate that taxpayer pays. Millionaires face a 35 percent tax bracket, while middle income fall in line at the 15 or 25 percent range. But investment income is taxed at 15 percent and Buffett has criticizedthat he and other wealthy people have been “coddled long enough.” Thanks to the Bush administration for ending a wealth tax, one of the factors that helped push this country into a surplus under the days of “Slick Willie” Bill Clinton’s administration.
President Obama recently spoke on a very good reason a tax rate for the wealthy is needed. “We can’t just cut our way out of this hole,” in his speech at the White House, also stated that he is among the “millionaires who should face higher tax rates than the middle class. It’s only right we ask everyone to pay their fair share,” the President stated.
The point is that the best way to begin filling budget holes in the budget is by obtainingfrom those who have benefitted the most. President Obama proposed paying for new stimulus measures and deficit cuts by reforming a tax system to make certain that millionaires do not pay a lower tax rate than the middle and lower class where a redistribution of wealth hits the hardest.
Since Obama made his announcement pushing for a wealth tax, many rich Americans agree that they should pay their fair share of taxes. This is strange but true. Rich Americans that are caught up in the capitalistic system that breeds greed are in favor of higher taxes. A growing number of the rich appear to agree, mainly in support deficit-reduction plans that include higher tax rates for top earners. The rich can shoulder a larger share of the burden of fixing government finances, it is argued, and can be asked to do so without doing much harm for recovery and growth.
Some have argued that in the past, low taxes on the rich encourage investment and growth. That was not the case under the Clinton administration nor is it the case in this current economic crunch facing this economy. With the national debt being high, spending cuts arecertain. But these can only do part of the job. Hopefully the pressure is on Congressional members to push for taxation increases on the rich because their taxes could feasiblycover far more of the budget than before.
America’s rich have done real good for themselves as the top 1% of wage earners in America earning more than $400,000 a year captured real economic growth of all pre-tax income earned. “The rich have done very well in recent decades and the richest have done best of all.”
A wealth tax improves most tax systems, effectively raises government revenue furthering economic growth as a wealth tax helped contributed to lifting two weakened administrations stimulating both Reagan and Clinton’s economic liabilities into a steady economic growth for investment which increase revenues on investments getting the government and the country out of a hole.
Reagan and Clinton’s taxation stimulated the lower, middle, upper classes and the rich create a demand for financial resources which in turn improve economic efficiency, increased government revenue from a wealth tax coupled with restrained government spending reduce government borrowing providing more credit for the private sector to promote business, lending a strong, steadily growing economy increase tax revenues for more deficit reduction.
I think this is what Obama has in mind. But Obama does not have big business and corporations fueling industry support elevating economic growth. There is nothing carrying this economy except the government. That’s not growth. That’s the government under the Obama administration acting as a social program overspending on taxpayer dollars. To bring this economy full tilt forward, both individual and industry taxation must transition together to generate new taxes for revenue. In 1999, Donald Trump “proposed a wealth tax” on the “net worth of individuals and trusts worth $10 million or more.” Trump claimed that this “would generate $5.7 trillion in new taxes.” If this were applied today with our current deficit, the revenue would eliminate the national debt.
Obama must bring to the table major corporations, corporate America, big business, trade and labor industry, individual wealth and American businesses outsourced overseas to bring this economy back into prosperity before the 2012 election. If the economy does not improve before November 2012, in reality we need a conservative point of view.
The opinion expressed in this commentary
article are solely those of Michael Coker