How much do high-earning families need to pay before the Obama administration can finally say they are finally contributing their “fair share?” If such a number even exists, we have apparently not found it yet, if the latest proposed tax hike is any indication.
The Heritage Foundation’s Curtis Dubay explains the consequences of the President’s latest tax proposal:
Taxpayers earning more than $1 million per year are investors and businesses that are directly responsible for creating jobs. Investors provide the capital to existing businesses and startups so they can expand and add new workers. Raising their taxes would deprive them of resources they could invest in promising businesses that are looking to add employees. Raising their tax rate would deter them from taking the risk to invest.
In the long term, lower-income families will feel the sting of the tax hike as well. In another report, Dubay says job-creators immediately affected by the tax will refuse to hire additional workers simply because it won’t make any economic sense to do so:
Many businesses pay their taxes through their owners’ individual income tax returns. The President’s tax hikes would be a direct tax on these important employers. A recent study from President Obama’s own Treasury Department shows that 90 percent of businesses that pay taxes through the individual income tax code and employ workers would pay the higher taxes under the President’s plan. Higher taxes would reduce these businesses’ incentives to hire new workers and their ability to retain or increase compensation for their existing employees.
Ultimately, the U.S. government’s self-destructive policies will harm lower-income families far more than the more successful families and companies who can shoulder the burden at the cost of a reduced work force.
“The millionaire tax would end up costing the U.S. economy more jobs than the President’s jobs plan it is supposed to pay for would ever create. It would ruin American competitiveness among other developed countries,” Dubay says.
If the Obama administration truly values job-creation, it should focus on the real root of the deficit: runaway spending brought on by years of government expansion and poor decision-making.
What do you think? How can the President’s jobs plan create employment opportunities when it makes hiring new employees more costly?