The 2% Illusion
I'll admit that as I watched President Barack Obama's speech Tuesday night I did have a sense of hope that he truly did understand the importance and urgency of the current economic crisis. My boss's words were ringing in my ears from what he mentioned the day before, "Your second job may be your only job next month." As I listened to him explain how he was going to distribute rebates and not raise taxes for essentially the working and middle-classes, his idea of taxing those that make over $250,000 seemed fine to me. However, good intentions and hope have never made money appear out of thin air. "The 2% Illusion" takes the most recent data available from 2006 on the tax revenue generated from the wealthiest portion of tax payers (the same portion President Obama is now proposing we increase taxes on) and finds that if taxed even at 100% of taxable income (generating $1.3 trillion), that was not enough to cover even half of the governments fiscal budget. The current stimulus plan released today has a price tag of $3.6 trillion. That was conveniently left out of Tuesday night's speech. Simply put, yes the rich have deep pockets, but not that deep. It is going to be very hard for President Obama to sell his concern that he does not want future generations to have to deal with paying for the current debt if he simply does not have a viable way to come up with the money.