Obama, the tax cutter, hits the campaign trail with Obama, the tax cut hater
posted at 12:57 pm on September 8, 2012 by Howard Portnoy
There may be only one America—not a red America and blue America—but there are surely two Barack Obamas. Both took the stage at a campaign rally in Portsmouth, N.H., on Friday to ridicule the GOP ticket for its plan to extend the Bush tax cuts for everyone, including for the wealthiest Americans.
Despite his acknowledgment in 2009 that “you don’t raise taxes in a recession,” Obama has since become a champion of economic fairness. Wearing that hat, he has repeatedly excoriated his opponents for their refusal to accept his moral truth that earners at the top should be willing to “do their fare share” and “pay a little more” to help the moribund economy turn around.
He did it again in Portsmouth, but in a haughty and mean-spirited fashion borne of desperation, reducing the Romney-Ryan approach to a comedic punch line:
Tax cuts, tax cuts, gut some regulations—oh, and more tax cuts. Tax cuts when times are good, tax cuts when times are bad. Tax cuts to help you lose a few extra pounds. Tax cuts to improve your love life. It will cure anything, according to them.
The jab drew approving snickers from a small crowd that was present to witness Obama, the tax cut hater, metamorphose before their eyes into Obama, the tax cutter. “We have cut taxes for small businesses 18 times,” he suddenly boasted.
Or “17, or 18, or 19 times,” to quote Press Secretary Jay Carney. “Whatever number they’re touting,” writes Investor’s Business Daily, “it’s bogus”:
In fact, if you look at Obama’s list [of alleged tax cuts for small business], you quickly realize that all but four have either expired or will soon expire, aren’t cuts at all, or are double-counted. And the rest are pretty much worthless.
There is also the unresolved matter of whether Obama’s plan to allow the tax cuts to lapse for those making more than $250,000 would adversely impact small business owners. Much has been made of the 3% figure. That is the “tiny” percentage of small business owners that would face higher tax bills, the administration claims. The IBD article points out that 3% still translates to 900,000-plus small firms that would still see their tax bills climb.
But is the 3% figure accurate? Kevin Hassett, director of economic policy studies and a senior fellow at the American Enterprise Institute, and Alan D. Viard, a resident scholar, answered that question in a Wall Street Journal op-ed from 2010:
The 3% figure, which is computed from IRS data, is based on simply counting the number of returns with any pass-through business income. So, if somebody makes a little money selling products on eBay and reports that income on Schedule C of their tax return, they are counted as a small business. The fact that there are millions of people in the lower tax brackets with small amounts of business income may be interesting for some purposes, but it is irrelevant for the assessment of the economic impact of the tax hikes.
The numbers are clear. According to IRS data, fully 48% of the net income of sole proprietorships, partnerships, and S corporations reported on tax returns went to households with incomes above $200,000 in 2007.
A study released in July suggests even more pointedly that “millions of small businesses” (in the words of The Washington Post) “could be forced to cut jobs and wages, placing an enormous strain on the already sluggish economic recovery.” Critics will point out that the study, by the accounting firm Ernst & Young, was prepared on behalf of the Independent Community Bankers of America, the National Federation of Independent Business, the S Corporation Association, and the United States Chamber of Commerce, and is hence partisan. But the numbers don’t lie.
Suffice it to say that raising taxes on any segment of the population, never mind job creators, at a time when the unemployment rate has declined from 8.3% to 8.1% only because more people have dropped out of the work force is a gamble. In July, when Obama was still trying out campaign slogans, one of the memes tested was “Betting on America.” His campaign was ultimately wise to reject it. Will the American people in November be wise enough to do the same with a man who is still willing to go all in using the house’s money?
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