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Why is Obama robbing the rich?

Updated: 2011-09-27 07:50

(China Daily)

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US President Barack Obama announced a new deficit-reduction plan to tide over the massive $4.4 trillion debt of the United States. The most controversial aspect of the plan is that it will impose more taxes on the rich, who will be subjected to higher tax rates than the middle class. This has evoked strong opposition from the Republicans, who allege that Obama is supporting class struggle, says an article on southcn.com. Excerpts:

The republicans' reaction is understandable, because for long they have favored tax reduction, which ostensibly favors the rich. Given their close relation with Wall Street, such a stand can get them more support from consortiums and the wealthy.

Obama's new deficit-reduction plan challenges the Republicans because it does not extend the many tax reduction policies that were common during George W. Bush's presidency.

Obama has rubbished the "class struggle" barb of the Republicans, and has Warren Buffett as one of his staunchest supporters. Buffett has said he paid about $6.4 million in tax last year because his tax rate was lower than over 20 of his employees. Buffett also said that US Congress has spoiled American billionaires and multimillionaires.

Raising the tax rates for the rich, the Obama administration said it was applying "the rule of Buffett" or "Buffett tax".

That Obama went ahead with his tax plan despite his falling popularity ratings shows that he is preparing for the 2012 presidential election, because such actions will get him the support of the Democratic Party and the majority of American people.

But this should not be seen only as a political move to garner more votes. For one thing, the gulf between the rich and the poor in the US is widening. In spite of the global financial crisis, which started in the US in 2008, the number of American millionaires has increased, for which Bush's tax reduction plan is partly responsible.

Whether or not Obama's actions produce the desired political results will be known only after next year's US election.??

(China Daily 09/27/2011 page9)

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