To hear the media report
it, President Obama is proposing a tax increase on wealthy Americans.
That’s misleading at best. He’s proposing that everyone
receive a continuation of the Bush tax cuts on the first $250,000 of
their incomes. Any dollars they earn in excess of $250,000 will be taxed
at the old Clinton-era rates.
Get it? Everyone is treated exactly the same.
Everyone gets a one-year extension of the Bush tax cut on the first
$250,000 of income. No “class warfare.”
Yet regressive Republicans want Americans to believe differently. The editorial writers of the Wall Street Journal
say the President wants to extend the Bush tax cuts only “for some
taxpayers.” They urge House Republicans to extend the Bush tax cuts for
“everyone” and thereby put Senate Democrats on the spot by “forcing them
to choose between extending rates for everyone and accepting Mr.
Obama’s tax increase.”
Regressives also want Americans to think the
President’s proposal would hurt “tens of thousands of job-creating
businesses,” as the Journal puts it.
A small business owner earning $251,000 would pay the Bush rate on the first $250,000 and the old Clinton rate on just $1,000.
Congress’s Joint Tax Committee estimates that in
2013 about 940,000 taxpayers would have enough business income to break
through the $250,000 ceiling – and, again, they’d pay additional taxes
only on dollars earned above $250,000.
All told, fewer than 3 percent of small business owners would even reach the $250,000 threshold.
A third lie is Obama’s proposal will “increase uncertainly and further retard investment and job creation,” as the Journal puts it.
Don’t believe it.
The real reason businesses aren’t creating more
jobs is American consumers — whose purchases constitute 70 percent of
U.S. economic activity — don’t have the money to buy more, and they can
no longer borrow as before. Businesses won’t invest and hire without
consumers. Even as executive pay keeps rising, the median wage keeps
dropping — largely because businesses keep whacking payrolls.
The only people who’d have to pay substantially
more taxes under Obama’s proposal are those earning far in excess of
$250,000 — and they aren’t small businesses. They’re the fattest of
corpulent felines. Their spending will not be affected if their official
tax rate rises from the Bush 35 percent to the Bill Clinton 39.6
In fact, most of these people’s income is unearned —
capital gains and dividends that are now taxed at only 15 percent. If
the Bush tax cuts expire on schedule, the capital gains rate would
return to the same 20 percent it was under Bill Clinton (the Affordable
Care Act would add a 3.8 percent surcharge).
Funny, I don’t remember the economy suffering under
Bill Clinton’s taxes. I was in Clinton’s cabinet, so perhaps my memory
is self-serving. But I seem to recall that the economy generated 22
million net new jobs during those years, unemployment fell dramatically,
almost everyone’s income grew, poverty dropped, and the economy soared.
In fact, it was the strongest and best economy we’ve had in anyone’s
In sum: Don’t fall for these big lies — Obama wants
to extend the Bush tax cut “only for some people,” small businesses
will be badly hit, businesses won’t hire because of uncertainty this
proposal would create, or the Clinton-era tax levels crippled the
A ton of corporate and billionaire money is behind
these lies and others like them, as well as formidable mouthpieces of
the regressive right such as Rupert Murdoch’s Wall Street Journal editorial page.
The truth is already a casualty of this election year. That’s why it’s so important for you to spread it.