President Obama devoted 75 minutes in a press conference earlier this week to his jobs bill. The Wall Street Journal gets it spot-on when it describes the bill as: 1) having zero prospects of passing, and 2) being the last idea the Left has left.
At issue today is the 5% millionaire surtax tacked on by Harry Reid. Democrats are fond of bashing millionaires. Actually, thousandaires too. Come to think of it, Democrats are fond of bashing most anyone who makes anything more than a living wage, political donors excepted.
A 5% tax on “millionaires” appears at first to be an issue of fairness. When the average person thinks of a millionaire, he/she probably has visions of a heated pool and a Mercedes. In truth, many people who make millions on paper are owners of small businesses.
Because of pass-through tax reporting, the business income of many small businesses counts as personal income. For example, a Subchapter S corporation avoids double taxation in this way. Otherwise, income would be taxed at the corporate level, and then whatever the owner took out to live on would be taxed as well.
These taxes proposed for four months from now, along with the ones Obama wants implemented in 2013, would bring the tax rate on such small businesses to nearly 50% Do we need to wonder why businesses are not gung ho about hiring and expanding?
What the economy needs is precisely what this Administration will never do–get out of the way. Businesses have gobs of cash, and they are not going to part with it as long as Obama and his minions drool at the prospect of sticking it to the “rich,” people who coincidentally are the ones who provide jobs. Oh, I almost forgot–this is a jobs bill, isn’t it?
So prepare for another useless showdown in Congress over how to save the economy. Obama will vacillate between anger and frustration, Democrats will trot out another lame version of class warfare, and Republicans will stymie it all. Obama will then cry foul and Democrats will wring their hands over how to get elected with such a wimp in the White House. Republicans will fail to convince anyone that they can loose the stranglehold of big government on business.
All the while, the people who can actually do something about jobs will stockpile more and more cash, waiting for the day when they can count on politicians to busy themselves with the legitimate functions of government rather than tinkering with the economy. It may be a long wait.