Heartland Institute Experts React to Obama’s Tax Hike Proposal
President Barack Obama today proposed extending for one year the Bush-era tax rates for families with annual incomes below $250,000 – which would mean a tax hike starting on January 1, 2013 for families that earn more than that amount.
The following statements from tax and economic experts at The Heartland Institute – a free-market think tank – may be used for attribution. For more comments, refer to the contact information below. To book a Heartland guest on your program, please contact Tammy Nash at [email protected] and 312/377-4000. After regular business hours, contact Jim Lakely at [email protected] and 312/731-9364.
“With this proposal today, President Obama for the first time raises the possibility that the Bush tax rates will not be permanently extended for those making less than $250,000 a year. If that is not the case, why else would he propose only to extend the tax rates for them for just one year? Temporary tax relief does not work to promote the economy, as Obama should have learned by now. But this is not even tax relief because it involves no reduction in existing tax burdens.
“Of course, the proposal involves sweeping tax rate increases for the nation’s small businesses, job creators, and investors, who report their business and investment income as individuals on their personal tax returns, going into effect in January. The harm is to working people, who will not see the investment necessary to create jobs and increase the demand for labor to restore wage growth and rising, rather than falling, real incomes. This is not fighting for the middle class, it is trashing the middle class.”
Mr. Ferrara is the author of America’s Ticking Bankruptcy Bomb (2011)
“I’ve never understood what’s apparently magic about $250,000. But I think taxes should take a back seat to spending control. The national debt has nearly tripled since 2001. Annual federal spending has grown from $1.8 trillion in 2001 to nearly $3.8 trillion this year – faster growth than increases in gross domestic product, price inflation, wage inflation, population, or any other measure that could be used to justify such growth. Less spending would lead to less pressure on taxes and more money in the pockets of businesses and individuals.”
“Obama’s proposal is an obvious attempt to delay his intensely desired tax hike until after the election. The House should simply pass another bill extending all the early-2000s tax cuts, with no end date. That would provide a useful contrast to the president’s attempt to kick the can down the road.”
“The president’s call for extension of the middle-class tax cuts is mostly a political decision. From an economic standpoint, a major problem facing our economy today is federal spending. Using the 2012 Economic Report of the president, federal tax receipts are estimated today at 16 percent of GDP, while federal spending is estimated at 24 percent. In short, government spending is too high and has led to a federal budget deficit of $1.3 trillion.”
The Heartland Institute is a 28-year-old national nonprofit organization headquartered in Chicago, Illinois. Its mission is to discover, develop, and promote free-market solutions to social and economic problems. For more information, visit our Web site or call 312/377-4000.