Congressional Republicans, clearly fearing not the fate of a Jon Stewart tongue-lashing for hypocrisy, have decided on their talking point against President Barack Obama's proposed changes to the tax code. The payroll tax cuts Obama has proposed are bad, says the party of tax cuts, because there's no way they'll be permanent. Once lowered, taxes will inevitably rise back up again. From that certainty about future tax cuts will come uncertainty in the present: businesses don't know when, where or how their taxes will rise again, and thus will not take the risk of adding new employees now.
So goes the dissatisfaction with Obama's cuts. The president's jobs bill has provided just as much ammunition to critics in the way it raises taxes, too. For one, the threshold at which taxes begin to rise could be too low, argues Karen Hube of the Fiscal Times. In proposing his jobs plan, Obama cited Warren Buffett's oft-repeated observation that he pays taxes at a lower rate than his secretary. Could it be, Hube asks, that Obama is actually asking more of the secretarial class than he is of Buffett.
The jobs plan calls for a hike in the rate of tax on carried interest, setting up a certain fight with hedge fund managers and others investors who now take their income as interest, to take advantage of the current 15 percent rate. But it also caps itemized deductions for individuals making $200,000 or more, an income level that Hube and others say may be low enough to qualify as the middle class Obama wants to protect. And simply raising the tax rate on carried interest -- as if passing that hike would be simple -- will not reverse the perverse tax situation Buffett identified, Hube argues. Obama's proposal "doesn’t impose nearly enough of an additional tax buden on the likes of Buffett, Bill Gates and Mark Zuckerberg, even though those financial titans and others have said they would be willing to pay more."