Posted by | September 13, 2011 15:29 | Filed under: Top Stories

By Yashwanth Manjunath

I wasn’t expecting much out of President Obama’s jobs speech last week, but it was actually a very pleasant surprise. At $447 billion, it is still only about half as big as it needs to be, but the provisions in the president’s jobs bill (if passed) would create over 1.3 million jobs in 2012 and boost the level of GDP by 1.3%, just in time for Obama’s reelection campaign. But the really good news out of the Obama administration came yesterday when he announced how he would pay for the bill.

Obama’s jobs plan would be paid for by eliminating a series of tax breaks for the rich including:

  • Limit on itemized deductions ($200,000 individuals, $250,000 families)
  • Carried interest would be treated as “ordinary income” rather than at capital-gains rate
  • Oil- and gas-company tax breaks ended
  • Corporate-jet depreciation would change

For those of you unaware with how carried interest works, it is the tax break that allows hedge-fund managers to only pay 15% of their income in taxes, less than most secretaries. They get to treat money they make from investing other people’s money, as capital gains.

Not only is this great policy, but Obama is finally framing the politics perfectly:

We’ve got to decide what our priorities are. Do we keep tax loopholes for oil companies, or do we put teachers back to work? Should we keep tax breaks for millionaires and billionaires, or should we invest in education and technology and infrastructure?

The chances of this legislation actually passing with a Republican majority on the House is approximately 0.1% (and I’m being optimistic), but that does not really matter. The politics here, with the election right around the corner, is more important than the policy. He has finally come out strongly with a policy proposal in touch with what the vast majority of the country desperately wants, on the most important issue heading into the next election.

Now all he needs to do is sit back and let the Republicans defend tax breaks for Big Oil, hedge fund managers, and corporate jet owners, at the expense of a robust jobs plan, critical infrastructure investments for the future, and the education of this nation’s children. And the Republicans, being the loathsome corporate shills that they are, have been more than happy to oblige.

It would be fair to say this tax increase on job creators is the kind of proposal both parties have opposed in the past, said Michael Steel, a spokesman for House Speaker John Boehner (R., Ohio). We remain eager to work together on ways to support job growth, but this proposal doesn’t appear to have been offered in that bipartisan spirit.

Translation: We don’t care if we have to pack 50 kids into a classroom at once and we don’t care if this proposal will eliminate unemployment to 0%, under no circumstance will we allow you to raise taxes on the rich.

If President Obama can stay on point and keep hammering the Republicans for opposing to this very reasonable and necessary piece of legislation, the American people will eventually get the message. They’ll know who is fighting for jobs for the middle class, and who is fighting for corporate special interests. But for this strategy to really pay off, Obama must not back down under any circumstance. If he buckles, all of the great work up until this point will have been for nothing.

Let’s hope he stays strong.

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