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Le Figaro, France

The Illusion of the Wealthy’s
Hidden Treasure

By Pierre-Yves Dugua

Translated By Meredith O'Connell

31 December 2012

Edited by Lau­ren Gerken

France - Le Figaro - Original Article (French)

As for the sad saga of the "fiscal cliff," I'll be brief:

Barack Obama succeeded in convincing most Americans that the regulation of the deficit problem has succeeded in raising the taxes on the wealthy.

Naturally, in a country where the majority of people don't pay federal income taxes, the idea of raising someone else's taxes is brilliant and tempting.

Over the past five years Barack Obama has been asking for a raise in taxes on those households with annual incomes higher than $250,000. Republicans have conceded after having initially held back. A majority of Republicans accept raising taxes on annual incomes higher than $450,000 ($550,000 for couples).

Unfortunately, this fight is a diversion: The mounting revenue brought in by the tax hike on households with more than $250,000 is... $60 billion a year! A loss, when one remembers that there's $2.5 trillion in annual revenues and $3.8 trillion in debt.

The solution to the deficit is tax hikes on the middle class and a cut in funds to the most important programs: health care, Social Security and the Pentagon.

All the rest is just a smokescreen.

The middle class benefits the most from the deficit. Assuming that they can't touch their short-term interests in view of a deficit reduction guarantees that they won't find a solution to the deficit.



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