- Last Updated: 12:43 AM, July 11, 2012
- Posted: July 11, 2012
Word that Democratic sugar-mommy Denise Rich had renounced her US citizenship — apparently to avoid paying US taxes — came on the same day that President Obama called for a huge tax hike on people just like, well, Denise Rich.
A coincidence, no doubt — but Monday’s ironic confluence of events sure underscores one obvious economic fact: America will never tax its way to economic health.
Especially since Obama’s definition of “wealthy” starts with salaries of $200,000.
Obama’s plan is bizarre enough: Fresh off more grim economic news — anemic job growth and unemployment above 8 percent for the 41st straight month — his tax hike would be like hitting a struggling economy upside the head with a two-by-four.
“The core mission,” Obama said, must be “rebuilding an economy . . . in which everybody can have the confidence that if you work hard you can get ahead.”
Raising taxes on the “wealthy,” apparently, is his idea of how to do that.
Sound like a non sequitur? Absolutely.
But it’s also a naked attempt to win voters by stirring class resentments.
Fact is, Obama knows that tax hikes sap growth. That’s why he agreed to freeze rates in 2010: Jacking up levies, he said back then, would be “the last thing you want to do.” And it’s why — ostensibly, anyway — he’d now exempt those under $200,000 from the hike, at least until 2014.
Yet his plan would deal a rough blow to the nation’s job-creating engine: small businesses. “The folks who create most new jobs in America,” Obama admitted Monday, “are America’s small-business owners.”
But they’d be hit especially hard, because many of them declare their profits on their personal taxes, putting their incomes in the higher brackets that would be subject to the president’s hikes.
And it is precisely those now-at-risk profits that typically are reinvested in the business — fueling growth and, critically, new employment.
Congress’ non-partisan Joint Committee on Taxation figures that nearly a million owners — representing 53 percent of business income reported on personal tax returns — would feel the pinch.
And if each one laid off just two workers to offset the hike, nearly 2 million more Americans would land on the nation’s jobless rolls.
Rich’s flight out of the country itself tells the story: True, she’ll have to pay a hefty exit tax. But apparently it’s worth it to her, given the prospect of higher taxes here.
And when she leaves, no doubt she’ll take her bundles of cash with her — depriving the US economy further.
Indeed, that’s just what Facebook co-founder Eduardo Saverin did when he renounced his US citizenship recently to avoid US tax rates.
So, yes — the news certainly is “rich.”
But if Obama gets his way and raises taxes, the country sure won’t be.Follow @NYPostOpinion