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Will America Call His Bluff?
President Obama is relying on his payroll tax cuts for the middle class to kick off his 2012 campaign. Rassmussen Reports recently found that Mr. Obama only holds a 22% strong approval rating. 39% have a strong disapproval of the way the president is doing his job. With a low national approval rating, the president has much at stake. However, he already shows that he will be putting up quite a fight.
But, a fight might not cut it. Recent reports also show that the money that the American middle class will pocket with temporary tax cuts will likely be shelled out in higher prices elsewhere. Why? The Obama job’s plan heavily increases taxes on the upper class, including energy companies, permanently.
A report by American’s for Tax Reform show’s exactly how Obama will do this. Here are a few examples:
• For individuals and married couples making $200,000 or more, the American Jobs Act will limit tax deductions.
• Currently employers are allowed to deduct 9% of domestic manufacturing. However, this does not include energy companies. Energy companies are only allowed to deduct 6%. Obama’s jobs plan would eliminate this deduction completely. Ryan Ellis of ATR says Obama is, “singling them out by picking winners and losers in the tax code.”
• There is a current tax credit for oil companies to encourage greater oil production. However, it is only attainable when oil prices are at $42/barrel or below. Oil has come nowhere close to this price in quite a while. However, the jobs plan completely repeals this credit.
• Companies that do business in America and overseas can claim a tax credit for income taxes that need to be paid overseas. Obama’s jobs plan targets energy companies by making it exceedingly harder for them to claim this credit. If the plan is put into law, it could drive jobs overseas.
Taxing companies more will cause them to adjust due to an increase in costs. The consumer will have to endure higher prices. With Obama targeting energy companies, this could immensely harm our country given that much of everything we do uses energy. We may also see many jobs shipped overseas.
A recent Investor’s Business Daily article asked business owners what President Obama could do to get them to hire more permanent employers. One of the main suggestions: “Eliminate the capital gains tax and remove income caps, which would promote capitalization of companies so they can hire and expand. This would also help close the budget gap. Even Obama has admitted previous cap-gains tax cuts have generated more government receipts. The move would also promote more home buying and construction jobs.”
This, unfortunately, is not a part of the president’s agenda. Republicans who oppose Obama’s “temporary middle class tax cuts plus permanent corporate tax hikes” plan will inevitably be portrayed as favoring wealthy corporations over teachers, construction workers, and the unemployed. The ploy may help him keep his job, but it is not likely to create jobs in this country.