The American dream used to consist of the one underlying principle that every generation had the opportunity to do better than the generation that preceded it. Sometimes this dream is realized in grand fashion as it is with our President, who was raised by a single mother with a father he barely knew living on another continent and who had access to school choice programs. Sometimes it simply means making a little more, living in a better neighborhood and sending your kids to a better school or even college through whatever opportunity exists.
Earlier this morning, Erin Burnett of CNBC said: “I just came back from Asia, and that’s a place where people talk about ‘Hey I made more money than my parents made’, and that’s the way this country used to feel. And we can go back to that again, where people have a broader optimism about where the country is going, and I think that’s what we’re suffering from. We can get that back.”
Erin is exactly right that the feeling in America today is less optimistic than it was even recently. However, it is unlikely that the nation will return to that perpetual state of hopefulness any time soon. Especially, when it makes more economic sense to earn less money in America, rather than do well and give it all to the government.
ABC News reports that upper income taxpayers are now searching for ways to cut their income rather than become a victim of President Obama’s agenda to penalize families making $250,000. It is unlikely that at any other time in American history, has a more compelling argument been made that is best to underachieve. That economic security means earning less money. And that the fear of the government targeting you as an entrepreneur, a small business owner, or even a moderately successful investor is a real and legitimate fear.
Take the 63 year old attorney in Lafayette, Louisiana who said: “We have to find a way out where we can make just what we need to just under the line so we can benefit from Obama’s tax plan,” She added, “why kill yourself working if you’re going to give it all away to people who aren’t working as hard?”
In order for her to do this, she tells ABC News that she is going to have to drop clients she has counseled for years. Or consider Dr. Sharon Poczatek, the dentist in Boulder, Colorado who said she would probably start working fewer days, “which means having fewer employees, seeing fewer patients and taking time off.”
Dr. Poczatek put it best when she said: “The motivation for a lot of people like me – dentists, entrepreneurs, lawyers – is that the more you work the more money you make, but if I’m going to be working just to give it back to the government — it’s de-motivating and demoralizing.”
This is coupled with President Obama’s plan to significantly cut tax deductions for charitable donations for the earners over $250,000. These cuts are “are projected to help raise $634 billion for a kind of big federal piggy bank that would be used to extend health coverage to the more than 47 million people in America who are uninsured and subsidize premiums for others who can’t afford what they have.”
Essentially this allows President Obama and Congress to decide who gets the charitable portion of your income as Robert F. Sharpe Jr., a fund-raising expert points out: “The administration’s proposal is doing just that, reordering charitable priorities by taking money wealthy people would have given to other charities and making it go into the health care system through higher taxes.” House Majority Leader Steny Hoyer (D-MD), said the potential loss of philanthropic giving is “clearly one of our concerns.”
So while charities that research cures for Lou Gehrig’s disease (ALS) or breast cancer struggle to maintain donation levels, and as donors decide what areas of their annual budget to trim in lieu of higher taxes; President Obama is planning on spending the government’s windfall to fund a national health care system that could mirror Canada and Britain’s. These systems, by design, limit access to early detection of ALS or breast cancer by stalling access to specialists and treatments through bureaucratic red tape. It could be labeled ironic if it wasn’t so preventable.
So while the debate continues on the President’s budget, and the omnibus and the stimulus and the trillions of dollars of new government debt, it is becoming increasingly clear who will be the victims of this tax and spend nightmare. First, it will be the entrepreneurs, doctors and lawyers who will cut back hours and eliminate jobs to get under the President’s threshold for redistribution. Second, it will be the charities that these Americans already gave to so generously.
Mark Ambinder of the Atlantic tells us to basically get over it. “If wealthy people want to give money, then they should give, regardless of tax benefits.” His presumption is that the wealthy will continue to give, and those that use charity as a “tax dodge” are beyond helping ignores the immediate argument that giving your money to the government means you have less to give in the first place. When you have less money, you make different decisions on how to spend it. Period. Although it is refreshing to see someone is optimistic.
So in the end, we should stop feeling “de-motivated” and “demoralized” and let the government make our hiring decisions, and our charitable contributions. They know better, right? America’s spirit isn’t exactly the deflation they had in mind, but after all, $250,000 is the new $300,000.