Debunking the Millionaires and Billionaires Tax Cut Rhetoric

Debunking the Millionaires and Billionaires Tax Cut Rhetoric
By Matt Towery
12/10/2010

I am amazed when I hear not just liberal Democrats but also some Republicans being suckered into the belief that "the wealthiest 2 percent of taxpayers, these millionaires and billionaires" should see their tax rates rise. It is class warfare, yes. More importantly, it is not true!

According to Bloomberg News, an overwhelming percentage of the people being called "the ultra rich" come nowhere near to earning $1 million dollars a year. Of this so-called "privileged class," 3.8 million of those filing taxes who the liberal wing of the Democratic party believes to be "the very wealthy" are earning somewhere between $200,000 and $500,000 a year. Only 608,000 taxpayers earn between $500,000 and $1 million a year. That leaves a grand total of 315,000 individuals or families that earn more than $1 million a year. And if you separate out from that number the Oprah Winfreys of the world -- megastar celebrities, professional athletes, and the true, few elites of the business and finance worlds -- the percentage of "ultra rich" is even lower.

But let's get back to that overwhelming majority of the highest tax bracket that liberals are so eager to see punished, even to the point of turning on their own president, who already has earned the reputation with many Americans of being the most liberal president since FDR. This tax class is made up of the small business owners, doctors, and small retail and manufacturing entrepreneurs who collectively employ nearly half of the nation's workforce.

While every big corporation and bank was getting a bailout during the economic collapse, and while those on welfare were seeing extension after extension of their benefits, this small group of Americans -- who already carry the brunt of the nation's tax burden -- struggled. And they are still struggling to keep their businesses and practices going. They are trying to avoid layoffs. They are cutting every possible expense.

These are the nation's most frustrated workers. Even while they have been balancing the economic viability of their enterprises on their own backs and out of their own pockets, they have had to watch as the bailed-out banks have made fortunes. And yet these same banks continue in their unwillingness and inability to lend money to the so-called "super wealthy" owners of small businesses so that they can keep their companies alive.

I have been a frequent critic of President Obama, but I must note that despite his clear left-of-center agenda, he was smart enough to realize that these 3.8 million non-millionaires, attacked as they have been by a mindless left wing, are the only hope he has for an economic recovery. Increase their taxes and inevitably they will have to cut back more in their own spending and, likely, on the number of people they hire and the services they use. Of course the president will never admit to this, but it is undeniable.

Now some conservatives are ready to sink the extension of the "Bush tax cuts" because of the extension of unemployment benefits that comes as a trade-off to get this deal done. Believe me, I want to see welfare reform back in place, just as it was passed by Newt Gingrich and the Republicans in the 1990s. But if conservatives kill the extension of the George W. Bush tax rates over the cost of the additional extension in unemployment benefits, they will be cutting their off their noses to spite their faces. The failure to extend the cuts would lead to a significant rise in unemployment and to the spending of more big money on a fresh new crop of unemployed Americans. And the "super wealthy" wouldn't be putting much back into the economy.

It seems that too few recognize what a critical moment we face on this tax issue. Increasing taxes on these so-called "wealthy" would be a guarantee of a new round of economic disasters. Let those who want to make a point about class warfare risk such a situation at their own peril.

Regardless, the next time you hear someone talk about taxing the "millionaires and billionaires," you will have these facts and can make clear to them that their desire to "spread the wealth" would only guarantee years more of economic misery. Maybe that's what they want.
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To read another article by Matt Towery, click here.