Chicago Tea Party Patriots rally for a Tax Day Party at Daley Center Plaza on April 15. | Al Podgorski~Sun-Times
Updated: August 11, 2012 6:12AM
Faced with mounting evidence of slow job growth and a slowing economy maybe teetering on the brink of a downturn, President Barack Obama proposes . . . a tax increase on small business and job creators! Again this administration proves that it’s clueless about what government can do to help revive a stalled economy.
What it can do is to get out of the way — avoid increasing taxes, reduce costly regulation, remove uncertainty about fiscal policy from the horizon.
Best of all would be fundamental tax reform to lower rates, eliminate loopholes and replace a Byzantine tax code that runs tens of thousands of pages and promotes corporate welfare.
None of that was proposed by Obama. Instead, it was back to his past failed prescriptions and the politics of class resentment. He called for raising taxes on households earning more than $250,000 while preserving the Bush tax cuts for everyone else.
When Obama reached a 2010 deal with Republicans to extend all the Bush tax cuts for two years, he made the rational argument that no one raises taxes in a bad economy. Now that sound economic reasoning has gone out the window in the interest of re-election politics.
Obama has to try to divert the voters’ attention from the latest jobs report — the third in a row to show tepid employment growth.
The June numbers were ugly. The unemployment rate was 8.2 percent to mark 41 months of joblessness over 8 percent. About 12.7 million Americans were out of work, 5.4 million for 27 weeks or more. The joblessness rate for African Americans rose to 14.4 percent, for Hispanics it was 11 percent and for young adults 12.8 percent. Add the millions who stopped looking for work or who work part time because they can’t find full-time jobs and you have an under-employment rate of 14.9 percent.
Recall that the White House’s biggest economic initiative — the $830 billion stimulus bill — was supposed to keep the jobless rate from rising above 8 percent. Administration numbers predicted it would have reduced unemployment to 5.5 percent by now.
That’s failure with a capital F. Now a National Federation of Independent Business survey finds the most important problem facing small business is taxes. A Heritage Foundation analysis found that small businesses in the highest brackets, the most successful, pay 82 percent of all small business taxes.
Obama initially greeted the June numbers by saying the paltry number of jobs created — 84,000 — were part of a months-long trend in job growth that was “a step in the right direction.” That fell flat and recalled Obama’s notorious and quickly retracted comment just weeks ago that “the private sector is doing fine.”
The White House obviously wanted to change the topic of conversation. His tax proposal pushes the “fairness” issue — the rich, he claims, don’t pay enough. And stoking this notion will, he hopes, do damage to presumptive Republican presidential nominee Mitt Romney, a wealthy businessman with, gasp, a Swiss bank account.
The problem for the White House is that Americans care more about their own job prospects than Romney’s offshore accounts. Romney is wealthy because he is successful. And he made lots of money for people who invested in his expertise, including pension funds benefitting millions.
Come November, voters might decide they’d like someone with a record of success in the White House working to help them be successful.