The President drew immediate condemnation from congressional Republicans after he unveiled his deficit reduction plan Monday morning in the Rose Garden. The plan calls for $1.5 trillion in new taxes, including an end to Bush-era rates for upper income earners making $250,000 or more and additional taxes on millionaires.
Together with spending cuts enacted last month and projected savings from interest payments, the savings in the president’s plan total more than $3 trillion. The Obama administration is also adding on another $1 trillion in savings over 10 years from winding down the wars in Iraq and Afghanistan, though that kind of accounting has been dismissed in past debates as a gimmick.
Speaker Boehner said last week that tax hikes “are not a viable option” because “tax increases destroy jobs.” And the plan put forth today by President Obama is a prime example of what the Speaker meant.
The centerpiece of President Obama’s latest debt plan is a job-crushing tax hike that will hurt small businesses and create an even worse environment for private-sector job growth.
When the president and his advisors talk about a proposal that would affect “millionaires” or “the rich,” what they’re really talking about is a plan that would:
- PIT WASHINGTON AGAINST SMALL BUSINESS JOB CREATORS: President Obama’s tax hike hits hardest the very people most likely to create new jobs: small business owners. The House Ways & Means Committee cites estimates from the Joint Committee on Taxation that show “small business owners will pay over half of the taxes raised” under the president’s proposal. Economists Kevin Hassett and Alan Viard wrote in the Wall Street Journal that “fully 48% of the net income of sole proprietorships, partnerships, and S corporations” would be subject to the president’s tax hike. President Obama’s plan punishes successful small businesses rather than removing barriers holding them back and creating an environment where they can flourish.
- CREATE AN EVEN WORSE ENVIRONMENT FOR PRIVATE-SECTOR JOB GROWTH: “Pitting one group of Americans against another is not leadership,” Speaker Boehner. That’s because the president decided against bringing both parties together to address the spending binge that’s driving our debt and fueling economic uncertainty. Instead, while he provided few real details, the president proposed a tax hike that would punish innovative American entrepreneurs, and steer private capital away from job-creating investments and into federal coffers for politicians to spend as they see fit. Economists John B. Taylor and Diana Furchtgott-Roth warned the House Oversight & Government Reform Committee that tax hikes are an impediment to job growth.
- IGNORE REFORMS NEEDED TO PREVENT FURTHER DOWNGRADES: Ratings agency Standard & Poor’s (S&P) said strengthening and preventing our entitlement programs from going bankrupt is the “key to long-term fiscal sustainability.” Moody’s said America’s “status could be threatened if further measures to address the long-term fiscal situation are not adopted.” The president’s proposal ignores the need for reforms, leaving Americans exposed to the possibility of further downgrades that will make job creation more difficult.
While Obama was giving his speech at the White House, House Majority Leader Eric Cantor, R-7th, was about 120 miles south, standing before a high school auditorium full of students giving a talk on how to grow the economy. So he got to give react to Obama’s speech in front of a roomful of skulls full of mush. What an opportunity, let’s see how he did.
Cantor said small business people often choose to be taxed as individuals rather than as a corporation to pay less taxes, so raising taxes on people making $200,000 or more would make it more difficult for businesses to create jobs.
“That’s the bottom line,” he said. “Bad policy makes for bad politics.”
He emphasized his aversion to tax increases — “The president knows that we’re not passing tax hikes” – but pressed efforts to work on areas where the two sides agree, including tax relief for small businesses, regulatory relief and trade agreements.
After the program, during which an arranged slate of students asked questions, one James River senior approached Cantor to follow up on the proposal to increase taxes on the wealthiest Americans.
“The point is this: it’s about jobs right now. You don’t create jobs by raising taxes. We’ve seen that,” Cantor told him.
“The question is do you want to grow the economy and you lower tax rates or do you want to grow the government in Washington and we all know the government doesn’t spend money as well as you can or your family can or the businesses can. I think this is the real crux of the difference in Washington right now.”
At The House Committee on the Budget website, Paul Ryan issues this press release: Still Waiting for Credible Plan from President Obama:
President Insists on Tax Hikes for Job Creators, No Plan to Lift Crushing Burden of Debt
September 19, 2011
WASHINGTON – In response to the President’s latest proposal to raise taxes on job creators, House Budget Committee Chairman Paul Ryan issued the following statement:
“The President’s partisan speech and misguided proposals are disappointing, but not surprising. Having overseen an unprecedented surge in government spending – from his failed stimulus law, to the creation of new trillion-dollar health entitlements, to double-digit percentage increases in the budgets of many federal agencies – the President has finally admitted that he plans to send the bill for Washington’s reckless spending straight to American businesses and families. A $1.6 trillion tax hike on job creators is never a good idea. But taking more money from private savers and investors, and giving it to the same government bureaucrats who brought us the Solyndra debacle, is an even worse idea – especially in a weak economy.
“Unfortunately, none of the President’s proposals this year – from his February budget to his April budget speech, to his recommendations today – offers a credible plan to lift our crushing burden of debt while restoring economic growth. Instead of renewed prosperity, the President has offered us a plan for shared scarcity. The nation deserves better.”
On a lighter note, Republican Rep. Dennis Ross of Florida suggested that the president doesn’t quite understand “Talk Like a Pirate Day”:
“Perhaps the Pres misunderstood,” Ross tweeted. “It is TALK like a pirate day…not ACT like one. Watch ye purses & bury yr loot, the taxman cometh.” Then, just to be sure followers knew he meant it good-naturedly, he added the hashtag
So far, I don’t know of any Republicans mentioning the fact that Obama egregiously misrepresented the Republican position on tax reform during his speech:
In today’s speech unveiling his new tax increase, President Obama said Speaker of the House John Boehner had ruled out “any additional revenues whatsoever.” Yet Mr. Boehner specifically said he was in favor of closing tax loopholes in conjunction with fundamental reform of the tax code, which would result in increased revenues. He is against increasing taxes, but not increasing revenues. They are not the same thing.
Watch the video at Breitbart TV.