Limiting Bush-era Tax Cuts Harms Small Business
Americans are too smart to let Obama burden those who would supply jobs
July 11, 2012
President Barack Obama's decision to refuse to extend the Bush tax cuts for Americans earning $250,000 or more is a bet that's already going bad. A number of prominent but vulnerable Democrats, including Sens. Bob Kerrey and Bill Nelson, are backing away from the president, stating publicly that they don't support raising taxes on families who make less than $1 million. Perhaps they realize that almost 900,000 small businesses will see their taxes go up under the president's proposal. In an economy adding a paltry 75,000 jobs a month, one can hardly blame them for worrying that 14 million unemployed Americans might not take kindly to a tax on the people most likely to put them back to work.
Over at the Washington Post, Ezra Klein wrote that Obama is eschewing attempts to work with Republicans to find a resolution to the looming "fiscal cliff" of automatic tax hikes and enormous spending cuts set to go into effect in January. Instead, the president is pandering to the liberal base that wants to be able to hit Republicans for supporting "tax cuts for millionaires." He is willing to give them this issue even if it means increasing the likelihood of a market panic that puts more Americans out of work. Klein calls this strategy "standing and fighting," but even he acknowledges people are disinclined to appreciate a president who thinks an election is more important than their country's economic health.
Adding insult to injury, Obama's proposal doesn't even offer lasting tax relief to the middle class, opting instead for yet another one-year extension of temporarily lower rates. Far from putting Americans' minds at ease, this layers new uncertainty on top of existing uncertainty at a time when businesses and consumers already feel paralyzed by a fiscal climate that could change at any moment according to the administration's whims. Obama's only hope is that voters are not savvy enough to recognize this for what it is—a transparent attempt to buy them off with 12 months of lower taxes and no commitment not to soak them next year if he's re-elected. But Americans aren't dumb. They want more than just low taxes for themselves—they want pro-growth policies that benefit us all.
I suspect the president is about to learn that lesson the hard way.