Obama’s mas­sive tax hike

The Washington Times Weekly - - Editorials -

Now that he never has to run for elec­tion again, Pres­i­dent Obama can show his true col­ors. Mr. Obama made it clear on Nov. 14 he wants to whack Amer­i­cans with $1.6 tril­lion in tax in­creases so that an obese Un­cle Sam won’t have to go on a diet. The only thing that can slow down his sharp turn to the left is the House GOP.

“When it comes to the top 2 per­cent, what I’m not go­ing to do is to ex­tend fur­ther a tax cut for folks who don’t need it, which would cost close to a tril­lion dol­lars,” Mr. Obama said in his first for­mal do­mes­tic news con­fer­ence since June. He in­sisted his re-elec­tion was a man­date for rais­ing taxes on small busi­nesses and in­vestors, which he called his “guid­ing prin­ci­ple dur­ing these ne­go­ti­a­tions but, more im­por­tantly, dur­ing the next four years of my ad­min­is­tra­tion.” The pres­i­dent also de­clared that a “mod­est tax in­crease” would not “im­pinge on busi­ness in­vest­ment.”

Rep. Dave Camp, chair­man of the tax-writ­ing House Ways and Means Com­mit­tee, says that’s not true. “Ev­ery re­port we’ve seen — from em­ploy­ers to the Con­gres­sional Bud­get Of­fice — points to job loss if the pres­i­dent’s pro­posed tax hike is al­lowed to take ef­fect,” the Michi­gan Repub­li­can told The Wash­ing­ton Times on Nov. 14. “In this econ­omy, where peo­ple are strug­gling to find work, how can Wash­ing­ton be in the busi­ness of de­stroy­ing any job?”

While Mr. Obama claimed his tax in­crease would not af­fect 97 per­cent of busi­nesses, he ne­glected to ex­plain those it does hit earn a ma­jor­ity of U.S. small-busi­ness prof­its and thus have the largest im­pact on the econ­omy. That’s why the ac­count­ing firm Ernst & Young re­ported that rais­ing the top two in­come tax rates to as high as 39.6 per­cent would re­sult in a $200 bil­lion drop in out­put and a loss of 710,000 jobs.

Two weeks ago, House Speaker John A. Boehner of­fered Mr. Obama a com­pro­mise in which Republicans would help work for tax re­form that closes spe­cial-in­ter­est loop­holes to bring in more rev­enue in re­turn for se­ri­ous re­form to the en­ti­tle­ment pro­grams that are a ma­jor source of our fis­cal prob­lems. To have any hope of win­ning con­ces­sions from the White House, Republicans need to wage a smarter pub­lic re­la­tions bat­tle. Mr. Obama gets away with call­ing his plan to raise taxes with­out do­ing any­thing about spend­ing a “bal­anced ap­proach.” Ex­tend­ing ex­ist­ing tax rates is re­ferred to as a “tax cut,” even though no one’s tax rates will go down. Democrats are savvier in us­ing “real peo­ple” as the face of their poli­cies, rather than the cold sta­tis­tics Republicans pre­fer. A Gallup poll on Nov. 14 showed the Demo­cratic tac­tic has been ef­fec­tive as the num­ber of Amer­i­cans who are open to deficit re­duc­tion that in­cludes tax hikes has gone up from 43 per­cent in July 2011 to 56 per­cent to­day.

The pres­i­dent isn’t go­ing to be beaten in this game un­less Republicans adapt. For in­stance, in­vite the small-busi­ness own­ers who can’t with­stand higher taxes with­out lay­ing off em­ploy­ees to per­son­ally ex­plain their plight be­fore the cam­era. Now that Mr. Obama is a lame duck, it’s more im­por­tant than ever that fis­cal con­ser­va­tives make their case in a more me­dia-savvy man­ner. The fu­ture of our econ­omy de­pends on it.

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