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What do the wealthy think about Obama's tax plans?

Mark Mardell | 17:12 UK time, Wednesday, 8 September 2010

San Francisco

Gary Kremen is enthusiastic about his business past and present, if a little gloomy about the state of the economy and the economy of his state. He tells me he has made his fortune by "creating love around the planet". His first online business, dating agency Match.com, was a huge success, and he sold it for millions. In a very Californian way he moved on to the next success, making more money buying up a collection of website names including housing.com and sex.com.

He is exactly the sort of wealthy business person who benefited from the Bush tax cuts. President Barack Obama is making it clear to his audience today that he is not going to extend them, despite the worries of even some Democrats that this will damage the fragile recovery.

Mr Kremen's latest passion and investment is a company called CrowdFlower. I've never been to a Silicon Valley-style start-up before, but I am told the one we are in is typical, even if it is in San Francisco's Mission district rather than the valley itself.

You walk straight through the front door into a large open space with a high ceiling. Young men - and a couple of women - sit at long tables topped with Apple computers of various different sizes. There's a hubbub, people talking about their music projects, some about work, others just chatting. It's very relaxed. Reception, if there is one, is another young man, heavily tattooed and pierced, sitting to one side at another smaller table.

CrowdFlower is a new idea. The people in this room out-source repetitive tasks for other companies to people who do them from their homes for a few cents a task.

The projects are enormous in scale but each individual task takes just a few minutes. Some of the workers are in America, others are not. Some are college kids wanting to earn a few dollars. Some are refugees who might have lost a home but still have a laptop or a mobile phone.

They are engaging in big projects like finding the opening time of every petrol station in America and the start dates of every college, or comparing the merits of new search engines. The sooner the companies want their information, the more they pay.

What does Mr Kremen think about Mr Obama's plan to scrap the tax break for those earning more than $250,000 (£161,801), which he is talking about in Ohio today? At first he says he is ambivalent, then continues:

There is definitely one school of thought that a rising tide lifts all ships. I partially agree: the rich tend to be more job-creating. It depends who they are. The dividend-receiving people may not be job-growth people compared to the capital gains people, like start-ups.

If the tax cut were taken away would he personally create fewer jobs?

On the margin, yes, I think that's true. It may not be a 50% effect but a 10-15% effect. With the lack of jobs around that makes a difference.

So he really wouldn't spend as much money?

Why should I take the risk? Maybe I should hold onto it.

He says ending the tax break is a bad move when the country may already be in a double-dip recession.

Of course this is the view of one man, but in all the debate I hadn't seen the views of entrepreneurs themselves so I thought it worthwhile asking one. Some others we contacted at first said personal taxation wasn't an issue, it was corporate tax rates that worried them. Most turned us down for an interview.

This is going to be a very tough fight for Mr Obama. It looks political, targeting the rich when not much revenue is to be raised. I suspect he will have to spell out where he would spend the new money. Increasingly the president is setting out a clear difference, a choice between him and his opponents. It is not too late for him to shift the conversation ahead of this year's elections and to use his position to change the tone and frame the debate, but this is all really about 2012.

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