The deal is an acknowledgment by the White House that in troubled economic times it is good for working people to keep more of their money to spur job creation. Mr. Obama recognized this connection when he announced the deal. “Make no mistake,” the President said yesterday, “allowing taxes to go up on all Americans would have raised taxes by $3,000 for a typical American family and that could cost our economy well over a million jobs.”I thought this was interesting. Haley believes the deal was the White House admitting that lower taxes on everyone spurs economic growth. While I don't think Big Government will cease to call Obama a socialist, I thought their view was a bit off.
Let’s hope the President heeds this lesson about the link between lower taxes and job creation if and when the economy starts to improve and job creation recovers. If not increasing taxes is good in a bad economy, not raising taxes is also good in an improving economy. And if the President is really in the lesson learning frame of mind, he’ll soon come to understand that lowering taxes is even better for job creation.
As Haley notes in his post, the average American family would have seen their taxes increase by $3,000 had all the taxes expired and that raising taxes on the middle class (the average person) would subsequently cost the economy over a million jobs. This has nothing to do with the wealthy getting tax breaks too - the middle class drives the economy. They buy clothes, cars, homes, gadgets, and more. With $3,000 extra in their pocket, these individuals could spend more. Companies would have to adjust accordingly to meet the increased supply, meaning the hiring of new employees to manufacture the goods that the average American desires (job growth). The owners of the companies don't lose out because they didn't get a tax break too - more customers purchasing their products equals more profits.
Of course Haley believes jobs are created by giving the rich more money and to make sure they keep that money to give to their born-rich children, they want to cap the estate tax so that the un-average American can accumulate even more wealth...