Gibbs is certain there will be no middle-class tax hikes, but President Obama’s economic advisors Geithner and Summers aren’t so sure. On a repeated basis, the two advisers declined to commit to not raising taxes on families making less than $250,000 a year. Despite Gibbs’ insistence that Obama will not raise taxes on Americans making less than $250,000 a year, the current health care bill would directly increase taxes on those families in three different ways. If Obama places more taxes (he already has) on the middle-class, Obama will lose favor with the American people at an even faster rate.
If, however, Obama salvages his broken promise and instead raises taxes on the top 5% of income earners yet again, he still won’t raise revenues. Political pundit Larry Sabato tweeted, “Loading all new taxes for heath care, deficit reduction & everything else on those making $250g+ is unwise–and mathematically impossible.” Bruce Bartlett, a Treasury official during the Reagan administration said, “You can only go to the same well so many times.” Tax evasion and avoidance will increase as Americans seek to preserve their earnings. Other Americans may choose to work less as tax rates continue to rise.
President Obama is in a lose-lose situation, but more importantly, so is America. Either Obama raises taxes on families making less than $250,000, or else Obama chooses to incentivize the rich to work less or place their earnings in tax-free investments. Both stifle productivity and decrease economic standards of well-being. President Obama can choose his poison, but everyone is better off if he doesn’t choose either.