Higher taxes on the rich have been the holy grail of Barack Obama’s presidency. He spent four years talking about it, ran his reelection campaign on it and was willing to take the nation over the fiscal cliff to get it.
Now, he has gotten his wish. Taxes on the wealthy have gone up.
1) So, is this going to fix the deficit? No, the deficit is actually getting larger because of new spending in the fiscal cliff deal.
2) Did we only raise taxes on the rich? No, of course not. The payroll tax went up, too.
3) Will it create more jobs? No, in fact it will slow down job creation a bit because it will take money that job creators could have used for investment and move it into the government’s coffers.
4) Will it help the economy? No, in fact it will probably slow down the economy a bit by transferring money from the private sector to the government.
5) So, what did raising taxes on the rich actually accomplish? It reduced “inequality” by helping to make everyone a little poorer and it made a great campaign issue for Obama. So, there’s that.
So, if as expected, the economy continues to splutter along, the jobless rate stays high and the deficit remains huge, the question for Obama then becomes, “Now what?”