Obamas Tax Plan to Reduce The Debt And How it Might Affect Small Business
On Monday, President Obama revealed a new tax plan that represents not only a change in his economic policy, but also a shift in how he conducts his political strategy. Whereas Obama has become notorious for a strategy of offering substantial concessions to Republicans when it comes to economic issues, his new tax plan shows that he is less willing to compromise when it comes to taxation and debt reduction. Obama's plan includes plans to reduce the national deficit by "more than $3 trillion over 10 years" by increasing taxes on the wealthiest fraction of American citizens. The announcement comes days after a speech made by Speaker John Boehner, which essentially stated the opposite: Republicans would not support any economic bill intended to increase taxes on any sect of the population.
However, to demonstrate how serious he was about his approach, Obama claimed that he would use his veto power on any bill that proposed spending cuts without a simultaneous increase in taxes.According to??several analysts, Obama's statement on reducing the national debt comes at a crucial point in his presidency because it represents a much more combative approach to negotiating with Republicans on economic issues than what he has demonstrated so far. Because Obama has developed a reputation for being too flexible when it comes to negotiating on issues with significant implications for the nation and the economy, his recent move could be interpreted as a way of getting back in touch with his party base before the 2012 election.As for how Obama's new strategy might affect small businesses, what matters first is to what extent Obama's ideas will be implemented. With Republicans seemingly unwilling to negotiate about taxation, Obama might not be successful in getting any legislation through that succeeds in increasing taxes on the rich.
Furthermore, a policy of increasing taxation could have the effect of increasing employment through government spending on investment on projects that promote job creation, but these expenditures might not be seen for months or years. While some may argue that cutting taxes on the wealthiest Americans will reduce investments in big businesses and therefore hurt job creation, others may see it as a more fair approach to distributing the tax burden across the American population.What is your take on Obama's new stance? Do you think it will be successful, and what do you think the repercussions may be? Share your thoughts!