The Congressional Super Committee seems to be at an impasse. Instead of no cuts, a failure by this group will instead lead to a set of predetermined spending cuts. Now, the White House is using this process as part of their “we can’t wait” campaign. They’ll throw in a few more spending cuts in exchange for increased revenue, otherwise known as taxes.
Democrats have tried six ways from Sunday to raise taxes. Instead of undoing the Bush-era tax cuts, which would raise the tax rate on the lowest bracket by 50% and others by smaller amounts, they want to pick an income ($1 million is popular) and levy a new tax on that group. There seems to be a lot of public sentiment for the idea. Some “patriotic” millionaires are even suggesting it. Democrats don’t even seem to mind that taxing their potential contributors would negatively impact them,
Or do they? Since literally Day One of the Obama administration, the waiver has been used for anything from getting lobbyists into the White House to exempting certain employers from provisions in Obamacare. The tax code is hundreds of pages of ways to not pay taxes. Think about the way most people pay taxes. The federal tax levy for personal income could fit on one page. The rest is itemization, incentives, credits and exemptions designed to reduce taxable income.
No wealthy person wants to pay more taxes. At the same time, if they know which way the wind is blowing, they want to make sure they are the ones with the waiver. TARP and Obamacare are examples of legislation which passed due to the huge financial incentives given to those who ultimately voted yes. The wealthy who are most shut out will be the ones to find there is no “fair share” to be had. The low-end of the highest tax bracket will likely pay the highest percentage of income in taxes and they usually hire the most people per dollar of income.
Instead of pouring more money into a sieve, we should try shoring it up a little. I think we would get better results by cutting the tax code in half than doubling the tax rate.