Wolf Blitzer delivers the most important breaking news and political, international, and national security stories of the day. Tune to The Situation Room weekdays 5-6:30pm ET on CNN.
(CNN) – Words in Washington are important. President Obama and the Democrats always say that “millionaires and billionaires” can afford to pay higher taxes, especially when spending cuts will impact middle class families and the elderly. Given the nation’s high unemployment, House Speaker John Boehner and the Republicans counter by always saying that this is no time to increase taxes on “job creators.”
You won’t be surprised to find out that politicians on both sides are exaggerating.
Individuals earning $200,000 a year and families earning $250,000 a year are not necessarily “millionaires and billionaires.” President Obama and the Democrats would like to see their federal income tax rate increase from the current 35% to 39%, where it was during the Clinton Administration.
On the other hand, not all the changes in the tax code that Obama and the Democrats are proposing would necessarily impact “job creators.”
Take the case of New York hedge fund manager John Paulson. His story has often been highlighted, including the other day by New York Times columnist Nicholas Kristof. Paulson made nearly $5 billion (with a B) last year. Under a "carried interest" loophole in the tax code, a major part of his income was taxed at the long-term capital gains rate of 15% – instead of regular highest-income tax rate of 35%. The Democrats would like to close that loophole.
So here’s my question: Is Paulson really a “job creator”? I’m sure he spends a lot of money every year, but how many jobs has he actually created?
It’s a fair question for politicians to consider.