OBAMA'S JOBS PLAN IS A BUST! HIS LOGIC IS FAULTY AND NOT REALISTIC

'Fairness' is No Way to Shape Tax Policy by Tierra Warren

In his latest plan to reduce the national debt, President Obama has proposed a $1.5 trillion tax hike over the next 10 years. The burden would fall mostly on families and small businesses earning more than $250,000 a year. The President believes these job creators should be taxed higher out of “fairness,” and he has proposed the so-called “Buffet Rule,” named for billionaire Warren Buffet, to ensure they pay their “fair share.” But using “fairness” as a metric for creating tax policy is absurd. In a new report, The Heritage Foundation’s Curtis Dubay says it’s important to focus on how much tax high-earning families and businesses already pay. In addition, he asks if forcing them to pay more would in fact be fair to those who would bear the steep burden of the tax hikes. Dubay points out that the highest-earning families and businesses already pay more than the lion’s share of the federal income tax burden: According to the IRS, the top 1 percent of income earners—those earning more than $380,000 in 2008—paid more than 38 percent of all federal income taxes while earning 20 percent of all income. The top 10 percent ($114,000 and above) earned 45 percent of income and paid 70 percent of all taxes. At the same time, the bottom 50 percent of income earners—those earning less than $33,000—earned 13 percent of all income and paid less than 3 percent of federal income taxes.[1] Not only that, the President’s tax hike would be counterproductive and ultimately create fewer jobs: The families, individuals, and businesses that would pay an even higher share of the tax burden under the President’s plan are the job creators the economy needs to start hiring to lower the unemployment rate to acceptable levels. This group includes investors, the lifeblood of the economy, who provide the capital for businesses to expand and add new workers and for entrepreneurs to start new enterprises. Raising their taxes reduces their incentives to provide these vital sources of funding to businesses and start-ups—and, therefore, the businesses’ ability to create new jobs.