The trend started with the House health-care reform bill, which would pay for half of its cost with a “Millionaire Tax.” That’s a 5.4 percent tax on the portion of gross income (which includes capital gains and dividends) that exceeds $500,000 for individuals. Millionaires?
According to The Hill, President Obama “defended his plans to let the Bush tax cuts expire for the wealthy and close tax loopholes that reward companies for sending jobs overseas” by explaining, ”I’m not doing this to be punitive. . . . I’m doing it because, at a time of two wars and massive deficits, I just can’t justify continuing to give billionaires massive tax cuts.”
That’s interesting, since what the president has in mind on the income-tax front is to allow President Bush’s tax cuts on those making more than $250,000 to expire. Then again, I guess those are the billionaires Obama is talking about. I guess that, by that, he means people at the top bracket of the income tax, which starts at income of $373,651 or more for a single person. Billionaires?
As for putting an end to the corporate tax “loopholes” that allow American companies to remain somewhat competitive abroad in spite of the abomination that the corporate income tax is. American companies face the second-highest rate of all the OECD countries and a punishing worldwide tax system.
So are companies the “billionaires” the president is taking about? It is counter-intuitive, but, because of capital mobility, the people who stand to hurt by the Administration’s plan are workers. In a 2006 study, the economist William C. Randolph of the Congressional Budget Office concluded that “domestic labor bears slightly more than 70 percent of the burden” imposed by corporate taxes.
Mr. President, if you want to increase taxes on Americans, whatever your reasons may be, go ahead and do it. But at least be transparent about who will bear the burden of these tax increases.