When President Obama’s tax plan was revealed, international accounting giant Ernst & Young (E&Y) was asked to analyze it by the National Federation of Independent Business and the U.S. Chamber of Commerce. When the firm announced its conclusions that his plan would slow the weak economy even further, the White House attacked the study as containing “major flaws, errors and misleading statements.”
Obama’s tax plan is more than just “tax the rich” — it contains a mixture of tax credits for hiring new employees, a mortgage credit, an “American Opportunity Tax Credit” to entice more young people to get into debt to fund their college educations, an increase in the child and dependent care tax credits, and an extension of and increase in the earned income tax credit.
It would also eliminate all income taxes for seniors with incomes less than $50,000 per year, and would temporarily eliminate income tax on unemployment insurance benefits — both clear political plays for the senior and unemployed vote in the November elections.
It also reinstates the estate tax and would eliminate “loopholes” for oil and gas firms, while providing tax credits for green “renewable” investments. It would create a watch list of international tax havens in order to force “greater financial disclosure” to discourage the use of tax shelters by the wealthy trying to avoid taxes.
But the centerpiece of Obama’s plan is allowing the Bush tax cuts on incomes, capital gains, and dividends for those making over $250,000 a year to expire — essentially a huge tax increase on those with capital. And that’s what the report's authors, Drs. Robert Carroll and Gerald Prante, focused on: What impact would the imposition of those new taxes have on the economy and job creation? Simply put, from the perspective of those harboring an “anti-capitalist” mentality, it works just fine.
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Photo: President Barack Obama lays out his tax plan during an announcement from the East Room of the White House in Washington, July 9, 2012: AP Images