Obama and the "Buffett" Rule

As stated in a previous article, President Obama's Administration has provided details on the Jobs Plan he promised to release after Labor Day. This plan is set to cost around 300 Billion Dollars and seems to be round 2 of where Speaker Boehner and the President ended last time while discussing the debt ceiling. 

Besides the tax cuts that are set to give incentives for businesses to hire within the United States, media outlets are hooked on has been coined the "Buffett" Rule. Obama discussed the situation in which Warren Buffett, A successful investor on Wall Street, pays less taxes that his receptionist does.

Therefore, the Obama Administration proposed that when "Buffett"-like tax situations millionaires get into,  their taxes would default to the middle class tax rate. Thus eliminating the complicated minimum alternative tax as well as changing the concept of a "flat tax," only the flat tax would be for the wealthy income earners. 

In the article, Lampe: Its the Economy Stupid, Mike Lampe had recommended to get rid of the Bush Tax Cuts to the rich and implement a tax break that is more job specific. Although not getting rid of the Bush Tax Cut for the wealthy entirely, this approach sends a message of compromise and the perception that fresh ideas are going through the Oval Office at the White House. 

Although it is quite clear that Obama will not get everything he asks for, it will be interesting to see how the Republicans will respond to this bill. There is already the anti-tax movement of the Republican Party that suggest the government should not tax "job creators."

Lampe: Its the Labor Markets Stupid... (Obama announces Jobs Plan after Labor Day)

Prior to the new Jobs Plan President Obama is set to announce after Labor Day, the un- and underemployed people in the United States are asking, 'what have you done for us lately?' With unemployment at over 9%, both Democratic and Republican officials are trying to pitch the failure of the other party.

Let's face it, the Republicans are being hypocritical by slashing social programs and fundraising machines from Democrats (unions) without touching revenues; and Democrats are asking to keep key governmental programs without putting much of a fight to keep revenues (taxes) on the table.

But all this bickering does not solve the issue at hand. Yes, the federal budget will help ease political uncertainty in the markets, but it will not do much to increase employment as dramatically as the public wants. Although the Republicans' minds are in the right place, they are not thorough in their tax cut approach for the high income earners.

Would it not be a fair compromise to replace the high income tax break for a tax break specifically for companies employing people in the United States?

MAKING IT SIMPLE: Remember in school where we learned the basic process of our economy. You had the banks, industries, and the laborers. The bank would loan money to the industries to invest in their businesses. After the business is set up, they would pay employees to run the business. When the employees get paid, they go back to the banks and industries to start the process over again and expand the economy.

The question for our time is this, 'Are we becoming too efficient?' If we are not giving people the opportunity to earn money then spend it in the US Economy, does that mean the economy slows down because goods and services are not being purchased by the consumer powerhouse of Americans?

My three points of what I would ask President Obama to do:
1. Expire the tax cuts to the higher income brakets
2. Reform former tax cuts into a job-creating tax cut
3. Initiate these steps in your new jobs plan


Blog/Article by the Situationalist - Mike Lampe