Lets start with the President's semantics. Obama keeps talking about tax cuts for the middle class and for the millionaires. There are no tax cuts for anyone. The so-called Bush tax cuts were put in place twelve years ago. What the President's pushing is maintaining tax rates for the families making < $250K (individuals making <$200K) and raising it for families making more than $250K (and individuals making >$200K) NOT just millionaires.
The taxes increases proposed by the progressives will not do much to close the deficit. The federal deficit for the 2012 budget year totaled $1.1 trillion. According to the CBO the progressive plan to punish people and small businesses making over $250K will generate $82.4 billion a year for the next ten years, or a little over 7% of this year's deficit (if you assume the tax increase doesn't lead to a loss of total revenue people moving their money, etc).
When you add money to the economy there is a multiplier (for example I buy widgets from you-- you make more money---you buy more widgets from someone else and so on). When you take money out of the economy, such as the $82.4 billion Obama is pushing there is also a multiplier. Therefore the $82.4 billion represents a much bigger draining income than the Obama tax hike.
It isn't a matter of "paying their fair share" either. The charts below were produced from information generated provided by the Tax Policy Center
First lets take a look at who makes what? In the chart below the % rank of income earners represent the actual % of total American tax payers.
Based on the numbers above the lowest 20% of income earners have an average income of $11,002. The top 0.1% of earners with an income of over $8,315K.
In the chart below, the red bars represents share of total U.S. pre-tax income and the blue represents share of 2012 federal taxes (includes individual and corporate income tax, payroll taxes for Social Security and Medicare, and the estate tax)for each of the income groups.
We find that, the Occupy Wall street groups were wrong because it is that bottom 99% of earners not paying their fair share of taxes. They represent 82% of total U.S. income but only 73% of total taxes. The lower the income group the larger the "fair share of taxes deficit."
Looking at each individual group we see that beginning with the 80%-90% of income group (average income $125K) the more "upscale" earners are paying much more than their fair share of taxes. That top 1% of earners (average income $1,724K) represents 18% of total income and 27% of total taxes. To put it another way they are paying about 50% MORE than their fair share.
Any way you look at it, the highest earning Americans are paying more than their fair share of taxes, and the President is being fraudulent.
Sadly it looks as if the GOP may cave on to the president on his class warfare effort, without explaining the real "fair share" story, without showing how little this show of populism really raises, without even asking the president what his plan for budget cuts are.
If the GOP leadership caves the Democrats get a big win as they show the GOP to be liars about taxes, and enhance their reputation as "the party of the little people."
The country however, will be the big loser as the capital will be taken out of the economy through higher taxes on "income generators." Because the GOP seems to be conceding first, negotiating later we cannot even expect any major spending cuts from the progressives.