Poll Shows Rich Support Taxes To Reduce Deficit, Help Middle Class To Buy More Products

The tax debate that is playing out in Washington is one that pits the Republicans who never saw a tax cut they did not like against the Democrats who want a more level playing field for Middle America. The problem is that there seems to be no one concerned about how to pay for the tax cuts, or what the cuts mean for the long-term needs of the nation.

The GOP do not care about how to pay for the cuts for the wealthy, and Democrats are not interested in paying for the middle class cuts.  In these rancorous days of no one being able to talk honestly about the need for stimulas funding, or planning for the economy of the future, these cuts only serve to further undermine the long-term stability of the nation.

Sensible people outside of the process in Washington understand that more tax cuts will only exacerbate the deficit.  I consider all the tax cuts that are being debated in need of ending.  President Obama wants all of them extended except for the wealthy, those making over $250,000 a year.  My views on not extending any of them has not changed since before the 2008 election.

The Republicans howl about the shabby treatment the rich are getting at the hands of the President in regards to taxes.  But now according to a recent poll even the rich are not in favor of more tax cuts.  They too seem more interested in the long-term deficits that would be created by extending the tax cuts.   Some of the rich are also echoing the concerns that Democrats have made for over a decade.  That is, without a middle class able to buy products, the wealthy at the top will not make as much money.

But a Quinnipiac University poll this year showed nearly two-thirds of those with household incomes of more than $250,000 a year support raising their own taxes to reduce the federal deficit.

An op-ed piece in the Los Angeles Times by Garrett Gruener, an entrepreneur and venture capitalist, makes two important points about taxing the rich. (Mr. Gruener founded Ask.com and is the CEO of Nanomix and is a co-founder of Alta Partners, so he’s got street cred.)

First, he says tax rates don’t make or break the success of an entrepreneur – or the jobs he creates. He says he’s paying the lowest rates of his working life. But “if you want the simple, honest truth, from my perspective as an entrepreneur, the fluctuation didn’t affect what I did with my money. None of my investments has ever been motivated by the rate at which I would have to pay personal income tax,” Mr. Gruener writes.

History, he says, shows that “modest changes in the tax rate for wealthy taxpayers don’t make much of a difference if the goal is to build new companies, drive technological development and stimulate new industries.”

Second, an economy built only on the rich – who account for the lion’s share of income and spending – is unsustainable.

“What American businesspeople know, and have known since Henry Ford insisted that his employees be able to afford to buy the cars they made, is that a thriving economy doesn’t just need investors; it needs people who can buy the goods and services businesses create.”

He says the tax hikes for the rich should be invested by government in infrastructure and research. Preserving his tax rates won’t lead him to start new companies in the U.S.