Let's Cut Through Some of the Tax Nonsense

I am sure that you have heard the dispute about the efficacy of raising taxes on those making $200,000 or more. President Obama and the Obamacrats say that it is just calling on these folks to do their "fair share" even though they already pay a huge percentage of total tax revenue. The Republicans say that this is nothing but a tax increase on small businesses which create the majority of the jobs in America. I recently heard a brief debate on this topic on MSNBC and I heard the Obamacrat state that a big increase in tax revenue would far outweigh the impact of a loss of 2 or 3% of the new jobs. This is total nonsense and it needs to be explained.

Let's start with a few facts: According to the government, there were about 3.6 million people hired in June. This is not a net number. Indeed, when you subtract from this figure the number of people who lost or left jobs in June, the total number or net jobs created is only 80,000.

These are critical numbers. Think of it this way; if raising taxes reduces new jobs by 2 or 3%, that means that 2 or 3% of 3.6 million jobs would be lost. In other words, that means that between 72,000 and 108,000 jobs would be lost. In other words, with the tax increase, even the Obamacrats admit we would be LOSING jobs on the whole right now.

Of course, the 2 to 3% estimate put forward by the Obama folks has no basis in fact. No one knows just how bad the impact of raising taxes during this time of economic hardship would be. It could reduce jobs by 5% and that would mean that the economy would have shed 100,000 jobs in June.

The point is that raising taxes does not make sense at this point. The economy is just too fragile to withstand the blow that a tax raise would inflict.