Tax Cut Extension

“I am glad the rich will get their tax cut extension… because I plan on becoming a billionaire, and I don’t want to be taxed unfairly in the future.”

The statement I made above is something that I think about 50% of the population does not grasp. That would be the 50% who favor raising taxes for the top 2%. Unfortunately, not seeing yourself as a potential billionaire means that you will not make efforts to get above your current financial level. It is a matter of striving to better yourself, setting financial goals and planning a way to get there. It has been my observation that average person who favors taxing the rich heavily does not see themselves as ever getting to that level. While the average person who is against taxing the rich heavily, can identify themselves with the rich in one way or another and see themselves as potentially getting there. This is an important difference in mindset. In a free market economy, prosperity is a self-fulfilling prophecy. Do you believe in yourself? Do you believe that your efforts today will lead to your prosperity in the future? Perhaps this makes you question if you are planning hard enough to get rich. Very few will every actually attain billionaire status, but the effort to become one will comfortably get you into the millionaire club.

As for Obama… what he should have done was raise the high-bar from $250,000 to 1 million per year for the highest tier. A lot of households make 250,000 to 500,00 even if they don’t report it. Look at every small retail store in your neighborhood. There is a good chance they are above the 250,000 income level. They have a lot of flexibility in reporting their moderate income, and certainly identify themselves as people who plan to be very rich some day. A lot of homeowners have more then 250,000 in capital gains locked into their homes that they bought 20 years ago, so that higher tax on income over 250,000 does not sit well with them (regardless of homeowner and capital gains tax limitations). Obama does not realize that the goal of the middle class is to become part of the upper class… not stay middle class. Obama is fighting against the middle class in this sense.

Obama would have been more successful if he attempted to change the tax tiers. He should have changed the highest tax tier so that instead of starting at 250,000, it started at 1 million or even 2 million. This might have brought over just enough support to his plan to pass. This should have been done before the 2010 election. After the election it was too late for even this to work. Obama took an “all or nothing” chance… and lost.