Economy & Budget

We don’t ‘pay’ for tax cuts, Mr. President, we pay for spending

We don't 'pay' for tax cuts, Mr. President, we pay for spending

This isn’t about taxing job creators; this is about helping job creators” — Barack Obama.

Is there a “fairness” factory out there somewhere producing jobs?

If not, many questions remain about Barack Obama’s obsession with ending Bush-era tax cuts. Namely, how it would do anything to help propel economic growth? (It won’t.)

Let’s concede for the sake of argument that Federal tax receipts wouldn’t plummet after the institution of the tax hike on those hiring. How does a proposed tax hike that would have a negligible impact on the deficit or $15 trillion debt and offers absolutely nothing to the private sector — unless the president is revving up his autopen to cut everyone checks — going to help job creation?

Do you remember when the Bush tax cuts only benefited the rich? This point was repeated ad infinitum for years by nearly every Democrat in nearly every interview and  Sunday political talk show. I can’t remember a single Democrat candidate arguing that “The Bush tax cuts for the wealthiest Americans” were in any way beneficial for the middle class. Yet today, the president is running around claiming he’s generously extending something that for years we were told didn’t really exist.

In July of 2007,  Senator Barack Obama stated that, “The Bush tax cuts — people didn’t need them, and they weren’t even asking for them, and they ought to be relaxed so we can pay for universal health care and other initiatives.” If the Bush tax cuts were useless to the middle class, what is Obama really offering them?

Then there are the twisted semantics of this debate.

Obama says the country can’t afford the “cost” of tax cuts that were instituted about a decade ago. The word “cost” is used by nearly every news organization in this regard. We (as in the non-wealthy) supposedly “pay” for the “cost” of a new tax rate.  Now, unless the president is arguing that the baseline of government spending should encompass owning all your money and anything the IRS doesn’t take “costs” something, then only spending can really “cost” Americans.

Moreover, if the imaginary $80 billion yearly “cost” is so significant, why can’t the president match it with a mere $80 billion in real spending cuts? Who “pays” for the cost of failing to cut spending ? Rather, the president’s proposed budget would add $6.4 trillion in deficits between 2013 and 2022, according to the non-partisan Congressional Budget Office.

In the end, according to the Wall Street Journal, Congress’s Joint Tax Committee “estimates that in 2013 about 940,000 taxpayers will have enough business income to meet Mr. Obama’s tax increase threshold. And of the roughly $1.3 trillion in net business income, about 53% will get hit with the higher tax rates.”

After all, “the last thing you want to do is raise taxes in the middle of a recession because that would suck up… take more demand out of the economy and put businesses in a further hole.

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