It is clear that taxes are going up for those who succeed in making $250,000 in the upcoming tax years. The proposed top rate will be 39.6 percent.

The are a number of ways to produce $250,000. Bill Clinton, for example has made some speeches that commanded fees of over $200,000. Some former cabinet members garner impressive consulting fees and book advances. For some accomplished people, skill, celebrity and charisma conspire to produce substantial rewards . Some of these same individuals currently have a hand in the bank rescue, the auto industry intervention and formulation of upcoming tax reform.

There is another more typical way of producing $250,000. The $250,000 was the result of a year's effort, not a day or a week or a month. The wealthy individual had to produce revenue of perhaps $600,000 or 3 million or 7 million dollars in that tax year to generate that $250,000. He or she almost certainly had employees. The entrepreneur paid wages, social security, state unemployment tax and worker's compensation on their behalf. The business was subject to personal property tax. There was probably state mandated coverages for general liability and commercial automobiles. and sales tax if applicable.

Revenue is not guaranteed from year to year and has no value in and of itself. General Motors has billions of dollars in revenue but no earnings. The taxpayer has no guarantee of earnings in future years. He could very well lose money.

If he does succeed in generating profit, it will be taxed at 39.6 percent, subject to state tax (Oregon is considering an increase to 11 percent) and perhaps municipal taxes. The owner, if he is drawing wages, is paying both the employee and employer contribution to Social Security amounting to $15.30 for every $100.00 in compensation. The combined Social Security/ Medicare tax is limited to the first $106,800 in income, but the limit is likely to be raised if not eliminated.  In some states, he may be subject to state unemployment tax even though he is virtually precluded from drawing a benefit. He may also be paying in to Worker's Compensation although owners are often allowed to opt out.

Unless the owner is a genius or a cheat, those earnings are reduced by more than 50 and maybe as much as 65 cents on the dollar before he gets to spend it.

The administration should understand that you can mandate anything for an ongoing enterprise but you cannot mandate anyone into business. You can require me to pay an employee a designated wage but you can't require me to hire said employee.

Simply put, all businesses do the same thing. They collect money and they pay it out. What distinguishes one from another is how much you keep. When the reward doesn't justify the risk the tent folds. When that happens, the employer is the one least likely to be out of work going forward. Like it or not, Mr Obama, the only policy that rescues this economy is one that encourages investment and risk-taking. You can't do that by limiting the potential reward.

The same person who makes $300,000 probably pays an equal or greater amount in wages and takes on an open-ended financial risk. It is an admirable trait. Don't discourage them