UNDER President Barack Obama, the nation has experienced deficits so large they defy easy comprehension. For four consecutive years now, the federal deficit has been over $1 trillion. National debt now totals $16 trillion.
Obama says the solution is to increase taxes on those earning more than $250,000. A look at the Forbes 400, a list of the richest people in America, demonstrates the folly of that plan.
The combined net worth of the entire Forbes 400 list is $1.7 trillion. Even if the president ordered the outright seizure of those individuals' earnings, the national debt would still be over $14 trillion. And you couldn't repeat that trick a second time; the wealth would be gone but the debt would remain.
Think about that: Under Obama, we've reached a point where grabbing all assets of the leaders of Microsoft, Oracle, Walmart, Bloomberg LP, Amazon, Google and other corporate giants doesn't even come close to wiping out our national debt.
A new study by Douglas Holtz-Eakin for the American Action Forum further underscores the problems of Obama's tax-increase plan. Holtz-Eakin finds it is mathematically impossible to eliminate the deficit solely with taxes on millionaires; middle-class families will almost certainly take a hit.
If spending plans remain unchanged, Holtz-Eakin notes that erasing the deficit entirely through tax increases on millionaires “is infeasible” because it requires a tax rate of 123.9 percent. If tax increases are limited to those earning more than $500,000, the rate must surge to 95.5 percent, which Holtz-Eakin calls “an increase in excess of any economic reality.”
Holtz-Eakin finds those earning as little as $30,000 could face tax increases of as much as $1,500 annually — and that's if just half of deficit reduction is done through tax increases.