Many who march in the army of the president say that all they want is to return to the good old days when Bill ClintonBill ClintonScott Walker plans major welfare overhaul in Wisconsin Of biscuits and footballs: The perils of presidents and the nuclear codes Attacks on transparency take many forms MORE rode the range and rich people paid their fair share of taxes. Back then, they say, all was good.
If this is their cause, they should be happy. We are there.
After the “fiscal cliff” tax increase, the top rate is now 39.6 percent and on top of that there is a new 3.8 percent Medicare tax rate for people with incomes over $200,000. This means that the top stated rate for taxes is now 43.4 percent — a rate that is higher than that paid in Clintonian times.
The capital gains rate on small businesses and high-income people is also now higher than in the Clinton years. It is 23.6 percent today as compared with 20 percent in Clinton’s last years.
Even if you look at the effective rate, high-income people are paying more today than in the last decade of the last century. The effective rate is 27.6 percent today as compared with 26.4 percent back then.
There should be happiness in Obama-land. But, alas, there is not. The president and his minions in Congress continue to call for the rich, also known as small business-owners, to pay more.
What is the goal here?
Obviously, it is not to return to the tax policies of the Clinton years regarding wealthy Americans and small businesses, since we have already done so.
Rather, this seems to be about carrying the language of the campaign regarding class warfare to fruition. If the effort is successful, it will accomplish a long-time goal of the utopian left: to increase the size and pervasiveness of the federal government, and thus influence the nation’s underlying culture. This effort is to be funded through a high burden of taxation on one part of that society.
This is a push for a fundamental change.
One of the great advantages of America — and the one that has drawn so many people to our shores — is the opportunity our way of life affords to people who work hard, take risks and want to succeed financially. At its core, the nation has been, and to a large extent continues to be, a meritocracy.
To be more accurate, we have developed over the years into a benign meritocracy. We have social and government structures that funnel huge resources to helping those who need help in participating fully in our society. But, even so, much of our success as a nation and culture is due to the fact that people can succeed on their own initiative. We do not overly penalize those who accomplish this success, and we certainly do not vilify them.
If the logic of this administration carries the day, however, it will lead to a significant increase in the tax burden placed on successful Americans.
The result will be a broad-based shift away from actions that generate significant economic activity and job creation towards a culture of redistribution. The energy that would otherwise fuel economic expansion will dissipate. It is an approach the outer limits of which are now being tested in France.
The imposition of unconscionable levels of taxation in the name of social justice ends up undermining the economic well being of a nation. The forces that drive economic growth are reduced.
It is therefore correct that the Republicans in Congress are strongly resisting this continued push by the White House and its followers to move to a tax burden well beyond that of the Clintonian period on people who have done well.
These people, and the small businesses they operate, are the job creators and economic energizers of our nation.
Judd Gregg is a former governor and three-term senator from New Hampshire who served as chairman and ranking member of the Senate Budget Committee and as ranking member of the Senate Appropriations subcommittee on Foreign Operations. He also is an international adviser to Goldman Sachs.