Once again, the issue of raising taxes on the wealthy is rearing its ugly head as President Obama unveiled a $3.8 trillion budget request today that hikes taxes on the rich.
I don’t understand why some people refuse to accept that raising taxes on the very wealthy will affect everyone. Few business owners would deny the trickle-down theory.
I have owned and managed several service and product related businesses. One of the first things I needed to do whenever I incurred any additional mandatory expense, including a raise in taxes, was to raise my prices to my customers. Other solutions included cutting back on the business’ products and services or laying off personnel. Raising prices almost always results in laying off personnel, eventually because the higher the prices, the fewer people who can afford them. Fewer customers mean less need for employees. Frequently, it also means companies go out of business, offering no chance for the laid off employees to return to their previous positions.
Yes, I know that not all wealthy people own businesses but they do patronize them and they do hire service personnel. When prices increase, even the wealthy have to make spending adjustments that adversely affect the economy.
Rather than threatening once again to increase taxes on the wealthy, perhaps Obama should be cutting out the deadwood in Washington DC and reforming entitlement programs.
Whatever happened to Obama’s 2009 promise to cut the deficit in half by the end of his first term?