President Barack Obama's $787 billion stimulus has left America sputtering, like a Chevy Volt without its extension cord. Having learned nothing from this failure, Obama recently unveiled Stimulus Jr. — the American Jobs Act. Costing $447 billion, Stimulus Jr. boasts roughly half of its predecessor's audacity.
Citing Moody's data, the Center for American Progress crows that Stimulus, Jr. will create 1.9 million jobs in 2012. That equals $235,263 each — quadruple the $57,491 cost of an average private-sector position.
Even worse, major tax hikes fuel Stimulus Jr. Too bad Obama ignores House Budget Committee Chairman Paul Ryan's loophole-closing, tax-rate-slashing vision.
"Obama spent $800 billion of our money in Stimulus One, and the economy sickened," says Grover Norquist of Americans for Tax Reform. "Now he is back with another $400 billion in stimulus. Leeches! He gives us more leeches!"
ATR's Ryan Ellis describes Stimulus Jr. as "a series of permanent tax increases funding temporary tax relief and new spending programs."
Obama proposes a brand-new tax, literally on thin air.
Americans who use cellphones, iPads, and other wireless instruments should brace for Stimulus Jr.'s Section 278: a $4.8 billion spectrum tax.
Stimulus Jr. also would hike 13 existing taxes, including:
An itemized-deduction ceiling would treat the charitable, mortgage, and state-tax write-offs of Americans in the 39 and 35 percent brackets, as if they only paid 28 percent. Nonprofits should worry that this will curb the enthusiasm for their causes among affluent taxpayers. And, as the philanthropic sector watches its support wane, where will the needy run? Into the shriveled arms of the debt-addicted state!
Investment partners' capital gains would be taxed at 39.6 percent starting in 2013, up from 15 percent today. This will give financial risk takers one more reason to idle their money, or export it to nations that welcome it.
Obama's war on corporate jets would invade the entire world of aircraft purchases by business. All such planes would have to be depreciated across 12 years, not seven. This will reduce aircraft demand and kill jobs among aviation-assembly workers, much as Daddy Bush's 1990 luxury tax on yachts sank the pleasure-craft market and torpedoed some 25,000 boat-making jobs.
Beyond smacking aircraft, Stimulus Jr. would slam the energy industry by reducing or ending its access to depreciation, deduction, and double-taxation benefits that remain open to every other industry. Obama might as well siphon unleaded from drivers' gas tanks.
These 14 proposed tax hikes would augment the 21 new or increased taxes that Obama already has signed, mainly within ObamaCare. Among them: A $2.7 billion indoor tanning tax, a $20 billion medical device tax, a $22.2 billion pharmaceutical tax, a combined $65 billion individual and employer mandate tax, and a $123 billion investment income surtax.
Rep. Paul Ryan, R-Wisc., couldn't disagree more. As he explained Wednesday, "The last thing we need to be doing is to complicate job creation in America with this complicated tax code." He notes that individuals and companies devote 6 billion hours and $160 billion just to complete their tax paperwork. And taxes are a moving target: Ryan says that the tax code has endured some 4,500 changes in just the last 10 years.
Many of these amendments are loopholes that companies purchase through lobbying. "Every dollar that a business spends lobbying for a better tax deal is a dollar it's not spending to make a better product," Ryan observes.
Instead, Ryan would trim or toss loopholes by the truckload. This would allow individual and corporate tax rates to fall from 39 and 35 percent, respectively, to 25 percent each. The corporate tax would plunge from the industrial world's second highest (after Japan) to a far more competitive 17th highest, tied with Austria, Denmark and Holland.
If President Obama could resist his class-warfare instincts long enough to heed Congressman Ryan, he finally could liberate job creators to create jobs.
Deroy Murdock is a columnist with Scripps Howard News Service and a media fellow with the Hoover Institution on War, Revolution and Peace at Stanford University.