Charlie Rangle, Chairman of the House Ways and Means Committee (the committee responsible for initiating tax legislation), has put forth a new plan to propel the economy forward -- soak the rich. There's a new idea. For incomes above $ 280,000, Charlie proposes a 1 percent surcharge that increases at the $ 400,000 and then $800,000 level. That works about to above 3/4 of an employee at the $ 280,000 level, rising to nearly three employees at the $ 800,000 level, for every small business showing those income levels. This plan would basically stimulate more job losses, probably several hundred thousand lost jobs in the next two to three years.
But, it may not be that bad. Wealthy folks have a unique ability to shift their income from one category to another and minimize taxes. In fact, there is no reason for folks like Bill Gates or Warren Buffet to even have taxable income. They could simply borrow enough to live and not even bother file a tax return. That's probably not their plan, but it is suggestive of the moves that wealthy folks take to avoid onerous taxes. More likely, the new tax rates will just create incentives for wealthy taxpayers to income-shift and therefore pay lower taxes overall. So, realistically, under Charlie's new tax proposal revenues will most likely fall, adding to the already astronomical federal deficit. Sounds like a plan.
The great middle class can't income-shift. They receive w-2's and 1099's every year, leaving no place to hide. Eventually, their tax rates will rise to make up for Charlie's soak the rich scheme. It is now estimated that middle income tax rates (folks making between $ 25,000 and $ 65,000 per year) will face marginal tax rates above 65 percent to finance Obama's schemes. This sounds like "change you can believe in." It is certainly change.
The grand Obama wealth redistribution scheme is, in reality, a wealth destruction scheme. Charlie Rangle is certainly doing his part. Tax hikes in the middle of a devastating recession is a stroke of brilliance!