Think we can close the federal government’s funding gap by raising taxes solely on “millionaires and billionaires”? Think again, warns Thomas Sowell in a new column. Not even the Obama administration believes it can rely only on taxing the wealthiest Americans to meet its goals.
The actual tax-increase plans being proposed by Obama do not start with people who have an income of a million dollars a year. They start with people who have incomes of $250,000 and up.
That is more than most people make, but it is far short of a million dollars, and miles away from a billion dollars. How many of the people who stand to get hit with Obama’s higher-tax-rate plan are in fact either millionaires or billionaires?
According to the Internal Revenue Service, there are more than 2,700,000 people who earn $250,000 a year or more — and fewer than one-tenth of them earn a million dollars or more. So more than nine-tenths of the people who would be hit with the higher taxes supposedly aimed at “millionaires and billionaires” are neither.
When businesses advertise one thing and then actually sell something else, it is called “bait and switch” advertising. That is exactly what President Obama is doing with his proposed tax increases on “millionaires and billionaires.”
It gets worse when you look at the potential economic consequences of the tax-rate increases being proposed. The small proportion of the people targeted for Obama’s higher tax rates who are in fact millionaires and billionaires have the least likelihood of actually paying the higher tax rates.