President Barack Obama plan to raise taxes on the wealthy to increase income equality, hinders the chances of those at the bottom of the economic ladder to realize the American dream, says T.J. Rodgers, CEO of Cypress Semiconductor.
"One of the signature themes of the Obama administration is that the American dream is under attack due to 'income disparity,'" Rodgers writes in
The Wall Street Journal.
"The words divide the country into haves and have-nots, suggesting a national condition that needs to be corrected — presumably by 'progressive' taxation as a mechanism for income redistribution."
The American dream traditionally involves people achieving their own success and being rewarded and admired for it, Rodgers says.
"But we are now urged to become a zero-sum society in which those achieving the American dream are envied and even resented."
It's not as if the wealthy aren't paying their fair share of taxes, Rodgers points out. IRS data for 2012 show that the top 1 percent of American taxpayers earned 20 percent of the nation's income and paid 36 percent of its taxes, he writes.
"Will even higher taxes help the economy?" Rodgers asks. "My experience in Silicon Valley tells me that high and so-called progressive taxes are a major cause of the country's current economic problems, not the solution."
In Silicon Valley, the rich often invest their money back into the technology sector, Rodgers says. "For example, I have reinvested most of my net worth in 8.5 percent of the shares of my own company," he says.
"My investment helps maintain 3,479 permanent, high-paying jobs with good healthcare benefits that are now threatened by more taxes." Rodgers also has put $1.2 million into a restaurant in his hometown of Oshkosh, Wis., creating 65 jobs.
That means he has invested from $18,000 per job for the restaurant. And Cypress has invested $198,000 per job, Rodgers says.
Meanwhile, Congressional Budget Office statistics show that each job created by the Obama administration's 2009 fiscal stimulus program cost $500,000 to $4 million, Rodgers says.
Broad research indicates that private investment does better creating jobs than government spending, he says.
The American Dream is best seen in Silicon Valley, Rodgers writes. Only the very wealthy can afford to invest in start-ups there, given that those investments often don't pay off for 10 years, Rodgers says. He himself has invested in prominent venture capital funds.
"Does anybody really believe that moving investment decisions from Silicon Valley to Washington by raising taxes on venture capitalists and their investors would make Silicon Valley more productive?" Rodgers asks rhetorically.
"Progressive taxation is just another tool used by government to take over an ever-larger part of the U.S. economy," he says. "The horrible irony is that the government keeps telling the very people whose jobs it destroys that if we only tax the rich more, everything will be better."
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