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Bad Math And Obama's Taxes

The Wall Street Journal has an excellent opinion piece on the curious arithmetic underlying President Obama's plan to raise taxes on the highest wage earners. The pull quote from the article sums things up nicely:

"Take everything they earn and it still won't be enough"

By promising Americans that only the wealthy will bear the burden of his tax increase the president ignores that the wealthy he targets are the small and mid sized businesses that historically comprise the bulk of new job creation. How is penalizing these tax payers going to expand employment? Because many of these small businesses file taxes as individuals (via limited liability companies or sub S corporations) they fall squarely in the sights of the Obama tax increase.

But that's not the worst element of Obama's tax proposal. To illustrate the sheer idiocy of the liberal Democrat lust for private sector income the Journal editors conspiratorially inquire, why stop at 39% as Obama proposes? Why not take every dollar of taxpayer income, and lower the threshold from $250,000 deep into the middle class to, say, $75,000? That would amount to roughly $4 trillion dollars (based on 2006 IRS data), which would barely cover what Congress proposes to spend next year.

As the Journal notes, President Obama is betting on an economic recovery and he's wagering heavily on the "new liberal economic consensus that taxes don't matter to growth or job creation", an assumption contrary to historic fact. Also, by raising taxes on this particular group Obama runs the risk of their engaging in all manner of legal tax avoidance. But we have to remind ourselves that President Obama has no memory of the confiscatory rates of the 1960's and 70's, an era when doctors didn't work on Wednesdays because their accountants told them that it literally wasn't worth the effort.

The president is telling Americans that if they make less than $250,000 they won't see their taxes raised "one single dime". Tax payers are well advised to reach for their wallets when they here rhetoric like this. They should also remember that every Obama promise comes with an expiration date.


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Comments (23)

Ya just don't understand Hu... (Below threshold)
GarandFan:

Ya just don't understand Hugh, we're gonna SPEND our way to prosperity. Obama said so. Haven't you noticed that the seas have stopped rising, that the air is cleaner, industry is humming, magical windmills are cranking out more energy than we'll ever need? Why just yesterday, I saw a unicorn in my front yard. Haven't seen one since the days of Clinton, or was it Kennedy, or maybe FDR? Did they have unicorns back in Lincoln's day?

The president is telling... (Below threshold)
ExSubNuke:

The president is telling Americans that if they make less than $250,000 they won't see their taxes raised "one single dime". Tax payers are well advised to reach for their wallets when they here rhetoric like this. They should also remember that every Obama promise comes with an expiration date.

I realize you don't have an editor, and you probably rely on spellcheck like most of the civilized world... but your 2nd to last sentence should be...

"Tax payers are well advised to reach for their wallets when they HEAR rhetoric like this."

Who's down with OCD? The ExSubNuke is, that's who. :)

I know a doctor in private ... (Below threshold)
Steve:

I know a doctor in private practice who looked around and decided he could see a few more patients each week if he hired another office assistant. He talked to the accountant and when the numbers were crunched, the accountant said the extra income would put him in a higher tax bracket where all the new income would be confiscated by the government. It would be more hours of work for him and no extra profit. So... no hiring of a new office assistant. Could someone please explain this connection between taxes and job creation to the Democrats in a way they can understand it?

Sure!Taxes let the... (Below threshold)
JLawson:

Sure!

Taxes let the government create more jobs. Once in a government job, it's almost impossible to get fired. Because the folks IN those jobs are grateful to be in a government job, they're going to vote for whatever party will KEEP the government jobs going. The more tax revenue brought in (or promised to go out), the more government jobs are created.

Democrats excel at expanding government programs. Vote for less government, and you're cutting your own throat.

Yeah, this misinformation c... (Below threshold)
BobDog:

Yeah, this misinformation campaign is spreading across the internet, pushed by Republican operatives. HughS must be on one of their mailing lists.

It's been fact checked, and it's a big fat Republican lie. More than 95% of small business owners are unaffected by the tax change.

Also, most small business don't create jobs. These CPAs, Lawyers, etc are usually one person companies.

But the GOP wants to ring more donations so they lie about it. HughS is carrying their water without fact checking the claim.

Here's a link.
http://news.yahoo.com/s/ap/20090226/ap_on_go_co/fact_check_budget

Have a nice night. Sleep tight -- the boogeymen won't get you, honest.

BobDog, did you even read t... (Below threshold)

BobDog, did you even read the WSJ article? Dollars to donuts says no.

Do you think the stimulus a... (Below threshold)
Jeff:

Do you think the stimulus and the housing plan will work? I wonder. The deficit is going up and inflation may be just around the corner. I saw a good article on this on

http://www.recessioninfocenter.com

MOST "small businesses" don... (Below threshold)
GarandFan:

MOST "small businesses" don't create jobs?

I don't know where that idiot came up with the idea that small businesses are mostly accountants, lawyers, etc. The one's I run across locally usually have 5-7 employees in addition to the owner. Next time I see them, I'll have to tell them what a "rare bird" they are.

"How is penalizing these ta... (Below threshold)
moonbuggy Author Profile Page:

"How is penalizing these tax payers going to expand employment?" - Well, It's not going to contract employment either, but you made it seem that way. This doesn't really affect employment. Let's say your company makes widgets and you have 4 employees and make 250k a year making 4 widgets a day. So you'd be under the amount where your taxes would be increased. But now let's say you make 300k, but you needed 6 employees to produce the additional widgets to make that extra profit. What does paying more taxes on the 300k you made have to do with hiring or not hiring the additional employees needed to make those widgets in the first place? It has nothing to do with penalizing anyone. The more you make the more taxes you pay incrementally. So a company making more money isn't going to lay off their employees. The only way they would lay off employees is if that business has too many employees for the current demand. If there is a demand they instead need to hire more people to meet that demand and make that additional profit. The owner will be thinking if I can expand and make more a year, I'll be happy to pay the increase in taxes on the additional profit I received and hope to even make more. That's because those additional taxes are only on what extra was made by the company. profit is profit. I can't see how you can write and comment on this, if you can't understand the process. The rest of the article drifts and jumps into a pond of scattered confusion with many ill made points, but I'll just keep it on the main one...

"I don't know where that... (Below threshold)
BobDog:

"I don't know where that idiot came up with the idea that small businesses are mostly accountants, lawyers, etc. The one's I run across locally usually have 5-7 employees in addition to the owner."

Yes, at the retail level that's what the public is exposed to - the small business retialers and gas station owners, lanscapers, plumbers, etc. You don't visit 10 lawyers and 10 CPAs each month, but you do go into 10 mom and pop grocers, gas stations, dry cleaners, etc. right? That doesn't change the fact that the majority of business owners above $250,000 - those that will see a tax increase - are what's called "sole practitioners" and are in fact one-person "small businesses" that don't generate jobs.

What the Republican puppeteers aren't telling you is that the majority of those small businesses that you actually run into - the Joe Plumbers out there - will in fact get a tax cut under this plan.

They want you to believe that those well-to-do lawyers and CPAs that will actually see a tax increase create jobs. They don't.

The Republican party works for the well-to-do, and uses the rank and file GOPers to write checks to the GOP by using scare tactics like this. Giys ike HughS dont' realize it, but they are working for the rich and getting paid nothing.

"BobDog, did you even read the WSJ article? Dollars to donuts says no."

It's not an article, Peter. It's an opinion piece, which shows that either you didn't read it or didn't understand what it was that you were reading. The Wall Street Journal was bought last year by News Corp - owners of Fox News. What you're reading when you read a WSJ "opinion" piece is the line of bullshit fed to you by the publishers - the same publishers "owned" by the "owner" of Fox News.

Now I'm sure you're smart enough to question an "opinion" piece that is published by CNN - what makes you think an opinion piece by the WSJ shouldn't be suspect as well?

The "Fox News" brand has been thoroughly outed as noting more than than a propaganda arm of the Republican party so Rupert Murdock (News Corp) went out and bought a new brand - "The Wall Street Journal".

It's all tomfoolery, or perhaps HughSfoolery and PeterFfoolery are more accurate descriptions if you guys actually fell for this "opinion" piece as being factual and accurate.

BobDog.... And your "fact c... (Below threshold)
marc:

BobDog.... And your "fact checker" is CALVIN WOODWARD, Associated Press Writer?

Oh wait, it's not an AP writer, the writer is publishing data "according to one in-depth analysis" but by who?

We DON'T KNOW, the AP writer doesn't say and we have no clue.

BobDog... who does your taxes, H.R. Pufnstuf?

The Mayor of Living Island might have more credibility than this so called AP writer.

bd - "The Republican pa... (Below threshold)
marc:

bd - "The Republican party works for the well-to-do, and uses the rank and file GOPers to write checks to the GOP by using scare tactics like this."

Do ya think?

Well lets compare shall we, the Tax Foundation has a handy little chart that lays waste to that nonsense.

Clinton's tax rates were higher than Bush's. And leave us not forget Clinton lowered the top earners rates and that preceded the boom economy

It's not an article, Pet... (Below threshold)

It's not an article, Peter. It's an opinion piece, which shows that either you didn't read it or didn't understand what it was that you were reading.

Don't be such a nit.

The Wall Street Journal was bought last year by News Corp - owners of Fox News.

You're seeing a whole team of anti-Fox psychiatrists, aren't you?

Now I'm sure you're smart enough to question an "opinion" piece that is published by CNN - what makes you think an opinion piece by the WSJ shouldn't be suspect as well?

Because they've been around for 120+ years and is only the foremost and most respected daily financial newspaper in the world. When it comes to money, they know WTF they're talking about, frankly.

The "Fox News" brand has been thoroughly outed as noting more than than a propaganda arm of the Republican party so Rupert Murdock (News Corp) went out and bought a new brand - "The Wall Street Journal".

It's all tomfoolery, or perhaps HughSfoolery and PeterFfoolery are more accurate descriptions if you guys actually fell for this "opinion" piece as being factual and accurate.

You've done ZIP to refute ANY OF the points in the opinion piece (happy now?) other than say "Fox", "Fox News Corp." and "Murdoch", repeatedly. Either you're retarded or still haven't read the opinion piece (really happy now?)

I'll go with the latter.

And frankly, Rupert bought the WSJ because, unlike some papers--cough, cough, NY Times--this one likely MAKES money.

Fancy that.

#2 ExSubNukeI like... (Below threshold)

#2 ExSubNuke

I like the idea of an OCD submariner

I did not post the comments... (Below threshold)
bobdog:

I did not post the comments above from "BobDog".

Nor would I. Nobody here would ever confuse me with a liberal. I don't deal in liberal tripe.

However he wants to slice i... (Below threshold)
Bob:

However he wants to slice it, Obama is anti-capitalist, anti-winner, anti-producer, pro-class warfare. He is pro-collectivist, pro-loser, pro-consumer, pro-poor. The problem is that the producers have the greatest ability to determine what and how much they will produce, and where they produce it. My guess is that whatever revenue estimates Obama has for his tax hikes on "the wealthy," they will be much higher than the actual revenues produced. As we've seen under W, tax cuts actually and paradoxically produce MORE REVENUE than tax increases. This will also slow or stop recovery from our recession. Like Dick Morris, however, I believe Obama's top goal is growing government, and I've seen nothing to disprove that theory.

I didn't surrender neither.... (Below threshold)
bobdog:

I didn't surrender neither. But they took my horse and made HIM surrender. I think he's pulling a plow somewhere up in Nebraska...

The trolls refuse to accept... (Below threshold)
WildWillie:

The trolls refuse to accept the fact that you cannot tax and spend your way out of a recession. Even the congress' own budget office says this. But you "true believers" in the obamassiah cult cannot wrap your minds around the fact that you bought into an empty suit with no record and no experience and that leaves him very easy to manipulate. ww

At Rasmussen:Fi... (Below threshold)

At Rasmussen:

Fifty-one percent (51%) of U.S. voters say President Obama's plan to raise taxes on those who earn more than $250,000 a year would be good for the economy, according to a new Rasmussen Reports national telephone survey.

Face it - we're pretty much at that point where the majority can just vote for the minority to pay their way (they just don't realize that they can only do it for a little while - I hope they don't have kids). By the way - read that again...they're saying it's "good for the economy", not just that it's a good idea or they'd favor it or whatever. The media has done their job for a long time and, even if they didn't do it well, the sheer wall of sound has penetrated - they've convinced a majority of Americans that the economy would be aided by increasing taxes on the people that employ them.

And the simple fact is that the GOP hasn't had anyone "articulate and clean" enough to punch back and explain some simple truths to America since the 80s. Every GOP Congressman in every media appearance should simply be saying "Even if we take every cent earned by every CEO and all the rich" (don't use anything complex like 'the top whatever percent, KISS and just say 'the rich' like democrats do) "in taxes, we still wouldn't be able to pay for the spending the president wants. And do you think your boss or the person that owns your business will keep your business open if we're just going to take all or even most of what they earn from that business? They will not. Would you?"

By promising Americans t... (Below threshold)
_Mike_:

By promising Americans that only the wealthy will bear the burden of his tax increase...

Prior to 1913, there was no Federal Government income tax here in the U.S. Part of the campaign to get the 16th Amendment ratified (which granted Government the power to tax income) was that only the very rich would ever pay the income tax.

Government bureaucrats and politicians are NEVER satisfied with the power they hold and will always work to increase it.

Anyone would believes the non-sense about how tax increase on the 'very rich' only affect and will only ever affect the 'very rich' is gullible in the extreme.

I make $260k per year. Whe... (Below threshold)
JC:

I make $260k per year. When my taxes go up, I will have to offset that somehow, and it means I will fire my housekeeper who comes once a week, cancel our annual weekend ski trip, and instead of eating dinner out twice a month, we will only go once a month. How does that help anybody???

I also plan to take advantage of my employer's deferred compensation plan to push out 20k to the years after I leave the company.

And our economic life was s... (Below threshold)
Bruce Henry:

And our economic life was so very fair before 1913.

A true Republican, wishing to go back to the 19th Century.

And our economic life was s... (Below threshold)
GarandFan:

And our economic life was so very fair before 1913.
A true Republican, wishing to go back to the 19th Century.

Way to go Bruce, change the topic to something REALLY RELEVANT TODAY.

But watch out, it can bite you in your ass. The progressives in Kaleefornia pushed energy deregulation, ignoring what their grandparents learned the hard way. We were going to have CHEAP, UNLIMITED energy. And we got screwed.




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