Monday’s political scene featured two news stories out of Washington. One reported that President Obama repeated his call to let the Bush tax cuts on the rich expire and keep the current rates for those earning less than $250,000 a year. The other said the Romney campaign had raised more money than Obama for the second month in a row.
The connection between these political facts is crystal clear. Romney is raking in millions of campaign dollars from the very rich and the merely wealthy because they don’t want to pay higher taxes and Romney has promised they won’t have to if he is elected.
What President Obama proposes and has been proposing for months now is that taxes on the middle class — which he very generously defines as those earning less than $250,000 — remain static to keep consumer spending stable — but that taxes on the rich should be allowed to return to 2001 levels, when the federal budget was in balance.
Using junior high school math, the president argues the federal government needs more revenue to reduce the federal deficit and that the rich can best afford to pay more.
If voters make up their minds based on the impact of federal taxes on their family budgets, Obama will win this debate going away. According to the U.S. Census Bureau, only 2.6 percent of U.S. families had an income of $250,000 or more in 2010, the last year for which figures were available.
Now, an excellent argument can be made that many of those with incomes below a quarter of a million dollars must also chip in more if the federal deficit is to be brought under control. The average family income is in the $50,000 range. Those earning, say, $150,000, could also pay more without pain. But only a supply-side ideologue can truly believe that those earning millions a year should not be asked to pay more so that his or her government need borrow less to stay in business.
MORE THAN the feelings of family breadwinners is at stake.
The U.S. economy is still limping along. Job creation is barely keeping up with population growth. Tax policies should be written with long term economic growth as well as November’s election in mind.
Consumer spending remains the engine of the U.S. economy. President Obama rightly sees that the vast majority of U.S. consumers fall into the middle class as he has defined it. Leaving their income tax rates at current levels will encourage those families to continue to spend at current or higher rates and do nothing to reduce the growth of the economy.
In contrast, raising the income tax rates on the wealthy back to 2001 levels would have a negligible effect on the economy. The wealthy don’t buy consumer goods at a much higher rate than the rest of us do. They pile up the additional dollars they accumulate or give them away to charities. Restoring the Clinton-era income tax rates on the wealthy would reduce the deficit without affecting the national economy significantly.
We’re not talking class warfare. Just common sense.
— Emerson Lynn, jr.
