Obama’s latest lie: His tax hike on rich is a return to Clinton-era tax rates
posted at 12:00 pm on July 16, 2012 by Howard Portnoy
When Barack Obama is not busy trying to distract from his own failed record by spinning tall tales about Mitt Romney’s year at Bain Capital, he is attempting to persuade the middle class he is on their side. How? By returning to his popular meme of reducing the national debt (and simultaneously achieving income fairness) by raising taxes on “the rich.”
Here he is last Monday, explaining to a crowd of prospective voters that he is “not proposing anything radical. I just believe anybody making over $250,000 a year should go back to the income tax rates we were paying under bill Clinton.” Later on, he repeats his mantra: that he is merely asking the “wealthy to do their fair share.”
Sounds like a plan—so long as you are willing to buy into the false premise that a yearly income of $251,000 constitutes wealth. But let’s agree to do that as part of a thought experiment. Let’s also buy into the most optimistic analysis of the proposed tax hike, which suggests it would affect only 3% of small business owners (read: job creators). Here is the rationale for that claim:
There is a big difference between ‘business income’ and the small-business profits. Business income includes profits from real estate, royalties and limited partnerships for anything from real estate and oil drilling to venture capital and private equity funds. It also includes income from estates and trusts—so trust-fund babies are a part of the mix.
Put another way, much of what Republicans equate with small business income is investment income earned by wealthy people who hold stakes in a wide array of ventures.
This reading would be flawless were it not for a 900-pound gorilla in the room called Obamacare. One of the provisions of the health care law is to impose a 3.8% surtax on investment income of families earning $250,000 a year or more effective January 2013. The top rates would include a punishing 23.8% on capital gains and 43.4% on dividends and unearned income from interest, annuities, royalties, net rents, and passive income in partnerships and Subchapter-S corporations.
Although the effect would raise the marginal income tax rates on the wealthiest Americans into the stratosphere, Obama and his enablers in the liberal blogosphere are to determined to have voters ignore this inconvenient truth by focusing their attention on some shiny object.
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- Which party is really rooting for economic failure?
- Tax the rich—whoever they are
- Obama’s fairness doctrine a recipe for AMP (Assured Mass Poverty)
- Study: Americans’ incomes have fallen more during recovery than during recession
- Solution to the debt crisis: Tap the nation’s “additional income” reserve
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