Obama’s “Millionaire Tax” and the Jobs Bill

The game has gone from t-ball to softball to hardball as Barack Obama – he of job performance ratings that are going down faster than Larry Craig in a Minnesota airport men’s room – turns up the political heat and amps up the rhetorical volume in a desperate effort to finish off the American economy and create nationwide anarchy and chaos before his reign of terror comes to a close in January of 2013.

Even as his union thug minions co-opt the “Occupy Wall Street” movement in an effort to create a firewall against what is sure to be an all-out political assault against the Regime on the part of the Tea Party movement early next year, President Obama has made immediate passage by Congress of the so-called “American Jobs Bill” the mantra of his ongoing campaign speeches (yes, they ARE campaign speeches).

But now a different tack is being taken: instead of going after households with incomes of $250,000 and higher, Mr. Obama has targeted those who can truly be called millionaires and billionaires:

Giving a bit of ground on his own plan, Obama endorsed a new proposal by Senate Democrats to tax millionaires – not households making $250,000 or more – to pay for his jobs program.

“If the goal is to create jobs, then why are we even talking about tax hikes?” said Senate Minority Leader Mitch McConnell, R-Ky.

Republicans also shrugged off Obama’s complaints that they have not explained their opposition or proposed alternatives, saying they had done both.

About 392,000 households would get hit by the Senate Democrats’ proposed 5.6 percent tax on income above $1 million, according to an analysis by the Tax Policy Center, a Washington think tank. In 2013, the first year the tax would take effect, those households would see their taxes increase by an average of $110,500, according to the analysis.

The average total dollar amount of revenue projected to be raised by this new tax surcharge is $43.6 billion dollars – assuming a static environment where those upon whom the new tax falls meekly accept it and render unto Caesar even more of their hard-earned wealth as they work even harder to create that wealth. Human nature being what it is, you can safely bet that most – if not all – of the 392,000 households affected will employ strategies to avoid this new tax, strategies that will likely involve shifting or reducing income dollars to minimize the impact of the tax.

That said, for the sake of this argument, let’s assume that all the affected households happily hand over an additional $110,500 in extra taxes for a total of $43.6 billion to be spent creating new jobs.

How many new jobs will be created? Fortunately, we have sufficient data from the 2009 Stimulus Package to make an informed estimate:

In a report released Wednesday—”Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output from October Through December 2010″—the CBO said it now estimates the stimulus law cost a total of $821 billion, up from CBO’s original estimate that the stimulus would cost $787 billion.

In the same report, the CBO estimated that in the fourth quarter of 2010 there were somewhere between 1.3 million and 3.5 million people who were then employed who would not have been had the stimulus not been enacted. “CBO estimates,” says the report, “that ARRA’s policies had the following effects in the fourth quarter of calendar year 2010: … Increased the number of people employed by between 1.3 million and 3.5 million.”

Let’s be generous and go with the higher number of jobs “created or saved.” The math tells us that each job created or saved cost the taxpayers $228,000 each.

Now let’s apply this cost per job to the $43.6 billion that the Obama surtax would purportedly raise in 2013. How many jobs will this new tax create at a cost of $228,000 each? About  190,000. And I suspect all of these will be found in – where else? – the public sector.

Meanwhile, a grand total of about 100,000 jobs were created last month without increasing taxes a single penny.

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One Response to Obama’s “Millionaire Tax” and the Jobs Bill

  1. owleyepundit says:

    If Obamanomics continues, the inevitable hyperinflation will make us all millionaires. Utterly impoverished, begging millionaires, but millionaires nonetheless.