Wednesday, March 04, 2009

President Obama and "the rich"

Victor Davis Hanson, as usual, addresses the President and says what many of us (including me) are thinking:
Your plan might work for a while given the incineration of trillions in stock and home equity and the need for replacement cash, but its revenue-raising component is not just aimed at the miniscule number of “rich”, which you imply to the American people are flying the skies of America in private jets while being unpatriotic in avoiding taxes and violating regulations.

In fact, for your plan to succeed, you must go after the upper, upper middle-class, those making between $250,000 and $600,000 who are restaurant owners, home builders, labor contactors, architects, surgeons, engineers, hospital executives, college administrators, Ivy-League law professors, and many dentists.

These households are wealthy, yes; but they don’t own or even fly on $50 million private jets or host private Super Bowl parties. Their income is all reported, and with such good salaries come high insurance and, in the case of business, constant reinvestment and expensive inventories. They are not greedy, but the bulwark of the United States’ productive classes who in aggregate pay over 40% of the collective income taxes, and provide most of the jobs in the country. Under your plan many in these high-tax states will pay nearly 70% of their incomes in FICA, Medicare, federal income, and state income taxes. Why gratuitously mislead the American people that those for whom you will lift FICA ceilings or up their IRS bites to 40% are in any way synonymous with the super-rich? Remember the very, very wealthy voted overwhelmingly in your favor precisely because their riches gave them immunity from high taxes, and in many cases they were far removed from the everyday risk and worry of owning a hardware store or trying to keep together a family-owned construction firm. George Clooney is a world away from a paving contractor, just as making $400,000 a year on call 24/7 is not quite making $40 million investing or $2 million for a cameo.
I've noticed, among my more liberal friends who fall into the categories Hanson describes, a great uneasiness about what Obama plans to do to them. It will be interesting to see what happens in the 2010 mid-term elections.

The cynicism underlying plans like the Obama "tax the (sort-of) rich" scheme is that there are not enough voters in that category to make a difference. After all, 35-40% of American wage earners pay no taxes at all. Still, I wonder how people really feel about the government socking it to an income category that most people aspire to join, even if they are not quite there yet.


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