Opinion

Obama can't have it both ways on taxes

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It promises to be the most anemic recovery in memory, but there are signs here and there that the U.S. economy is regaining its health. Nobody is likely happier about that than President Obama, who wants another four years in the White House. That probably won't happen, however, if the economy is still sluggish come November. Thus we note with curiosity that, while speaking Tuesday for extending the Social Security payroll tax cut, Obama said "the last thing we need is for Washington to stand in the way of America's comeback ... First and foremost, that means Washington shouldn't hike taxes on working Americans right now." Indeed, the White House web site's most prominent feature Tuesday gave multiple examples of the good things that happen when people get to keep $40 a week more of their earnings instead of sending it to Washington in the form of payroll taxes.

We call this curious because the Obama who says "Washington shouldn't hike taxes on working Americans right now" is the same Obama who just sent to Congress a proposed 2013 federal budget that ... raises taxes, massively, on millions of other working Americans:

» Tax rates go up across the board on the three percent of Americans earning $200,000 or more. Since he doesn't include them among "working Americans," does Obama think these folks (who filed 3.9 million tax returns in 2009, according to the IRS) just sit around eating chocolates? In fact, most of them work so much that they pay more in taxes than the next 47 percent of all taxpayers combined. The remaining 50 percent pay no net federal taxes.

» Hiking income tax rates on $200,000-plus earners also means that costs for the vast majority of small businesses will go up, since their owners file their returns as individuals. Obama's tax hike will consume billions of dollars that America's small businesses would otherwise invest in new jobs.

» Capital gains and dividends taxes will double from 15 percent to 30 percent. Don't forget that all such income was also taxed before it was invested or paid out. The government's net revenues from these taxes will plunge following the increases because far fewer people will risk their capital knowing that Uncle Sam is about to double his take on what they might earn.

» The Obama-endorsed "millionaires tax" requiring those making $1 million or more annually to pay a minimum of 30 percent will, according to the Tax Foundation, mean marginal tax rates of up to 90 percent. Confiscatory rates like that will be disastrous for economic growth. Aware of this, President Kennedy, a Democrat, got rid of them in 1963.

» Elimination of a host of energy tax credits, as Obama proposes, would add in excess of $12 billion to the industry's costs of doing business. With the price of a gallon of gas already headed to $4 or higher come summer, this Obama tax hike could push it closer to $5 a gallon. Everybody will feel that one, not just Obama's millionaires.

You just can't have it both ways, Mr. President. Raising taxes on any working American will hurt the economy for everybody. So if you want to raise taxes in the name of "fairness," bring it on. Hard-working Americans will deliver an emphatic message to you in November. In a word, "goodbye."

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