After his party's devastating setback in the 2010 midterm elections, Barack Obama was re-elected earlier this month by painting his Republican opponents as heartless in favoring lower taxes for the rich. They were portrayed as nativists for opposing the Dream Act amnesty for illegal immigrants, and as callous in battling the federal takeover of health care.
Why doesn't the Republican-controlled House of Representatives give voters and President Obama what they wished for?
The current battle over the budget hinges on whether to return to the Clinton-era income tax rates, at least for those who make more than $250,000 a year. Allowing federal income rates to climb to near 40 percent on that cohort would bring in only about $80 billion in revenue a year — a drop in the bucket when set against the $1.3 trillion annual deficit that grew almost entirely from out-of-control spending since 2009.
Instead, why not agree to hike federal income tax rates only on the true “millionaires and billionaires,” “fat cats” and “corporate jet owners” whom Obama has so constantly demonized? Eight out of the 10 wealthiest counties in the United States voted for Obama. Corporate lawyers and the affluent in Hollywood and on Wall Street should all not mind “paying their fair share.”
Upping federal tax rates to well over 40 percent on incomes of more than $1 million a year would also offer a compromise: shielding most of the small businesspeople Republicans wish to protect while allowing Obama to tax the 1-percenters whom he believes have so far escaped paying what they owe, and then putting responsibility on the president to keep his part of the bargain in making needed cuts in spending.
Likewise, instead of hiking death taxes on small businesspeople, why not close loopholes for billion-dollar estates by taxing their gargantuan bequests to pet foundations that avoid estate taxes? Why should a Warren Buffett or Bill Gates act as if he built his own business and can solely determine how his fat-cat fortune is spent for the next century — meanwhile robbing the government of billions of dollars in lost estate taxes along with any federal say in how such fortunes are put to public use?
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