What the President’s ‘Buffett Tax’ Means for the Middle-Class
Monday morning, President Obama presented a plan for long-term debt reduction that included a tax hike for the “wealthiest corporations and richest Americans” who should “pay their fair share.”
GE Capital, which brings in billions of dollars in revenue, legally pays almost nothing in taxes. And billionaires, such as Warren Buffett, hold most of their capital in business assets which are taxed differently.
“Those who have done well, including me, should pay our fair share in taxes to contribute to the nation that made our success possible,” insisted the President. “Nobody wants to punish success in America,” he added, “This is not class warfare. It’s math.”
The plan also called for an end to the Bush tax cuts (which were designed to be temporary) for those with incomes of $250,000 or more, with the idea that increased tax revenue will enable continued funding of entitlement programs, nibble away at the national debt and pay for his stimulus jobs plan.
So, what does this mean for middle-class America?
Not much, really. Don’t expect to see any extra zeros on your bank statement.
Income and age restrictions on food stamps, housing assistance and federally-funded health care limit availability to victims of the recession who are not unemployed but drastically underemployed. Those who were truly middle-class (not just stretching a $35,000 salary to pay for an adjusted rate mortgage on a $300,000 house) do not qualify for welfare programs. Therefore, the President’s pledge not to support a “one-sided deal that hurts folks that are most vulnerable” mostly applies to the poor—a large percentage of which already qualified as poor.
Likewise, what incentive do wealthy individuals have to contribute more of their earnings to a federal government that has proven itself inadequate when it comes to managing money, especially when there is no guarantee that additional tax funds will be used properly? Republicans refuse to pass anything to credit Obama’s presidency; Democrats want to keep minorities hooked on entitlements; and, together they’ve decided what is best isn’t more important than re-election. Few are interested in paying for more Congressional dysfunction.
Job creation is the only thing that can save the middle-class and this economy. Furthermore, who puts people to work? Small businesses and corporations. Since banks won’t lend to small business owners or take chances on budding entrepreneurs with less than stellar credit, employment rests on the shoulders of Big Business. With Bank of America, the U.S. Postal Service and Best Buy scheduled to slash thousands of jobs; presumably a tax increase would further hinder job growth.
Ultimately, the “Buffett Tax” still leaves middle-class people with two choices: pig feet or chitlins.
But hey, he’s trying.
LaShaun Williams is a Madame Noire contributor and columnist whose work has appeared in The New York Times and on several other sites, including the Grio and HuffPost Black Voices. For more commentary on love, race, pop culture and politics, visit her blog Politically Unapologetic or follow her on Twitter @itsmelashaun and Facebook.