Please respond to this article about President Obama's recent tax proposal?
First of all, it is important to remember that Michelle Malkin is an extremely conservative writer who is likely to try to portray President Obama in a negative way as much as possible. It is important to know this sort of thing when reading so that you can be aware of possible bias.
Second, President Obama seems, in these proposals, to be giving up on trying to compromise with the Republicans. He has spent time this past year trying to compromise with them and seems to have come to the conclusion that compromise is impossible. Instead, he seems now to be proposing policies that will excite liberals and get them motivated to fight against the Republicans in the next election. This is why Obama is proposing this sort of a progressive tax.
So, the main point of this to me is political. President Obama seems to have decided that the Democrats' chances in the next election will be improved if he fights the Republicans instead of trying to compromise with them.
Mr Obama seems to care greatly about progressivity and not at all about efficiency. He does not bend from his absurd election promise that 98% of households should never pay higher tax rates, proposing only to raise rates and limit the tax deductions of the remainder. He also calls for a brand new “Buffett tax”, named for the billionaire Warren Buffett who has vociferously decried the ability of people of his means to pay such low taxes. The specifics are not provided, but it would require that people who make more than $1m pay at least the same rate that middle-income taxpayers do. Republicans have screamed “class warfare” at so many sensible policies that would raise taxes on the rich that one tends to tune them out these days. Yet in this case, they might have a point. The millionaire’s tax, depending on how it was implemented, would almost certainly make the tax code less efficient while raising little additional revenue. The same aim could be achieved simply by taxing capital gains and dividends at ordinary income rates, as they were before Bill Clinton and George Bush lowered the rates. Coupled with a corporate-tax reform that lowered the top corporate rate, such a proposal would both make the system more progressive and more efficient.