I try and stay away from all this political talk, especially after the last few weeks of constant blogging, but enough is enough. I step away for a week only to find that this situation has gotten worse, that even with all the scandals, even with all this wasteful spending that Republicans like John McCain and Judd Gregg can’t even support out of the spirit of bipartisanship, politics in the United States have continued its downward slide into the socialist gutter. NEWSFLASH, you can’t spend money you don’t have, no bank would lend you the money knowing that it won’t give it back, so why is this same flawed mentally being used on a grander scale? Mind-boggling…
On Tuesday, he left the impression that we need merely end “tax breaks for the wealthiest 2% of Americans,” and he promised that households earning less than $250,000 won’t see their taxes increased by “one single dime”… This is going to be some trick. Even the most basic inspection of the IRS income tax statistics shows that raising taxes on the salaries, dividends and capital gains of those making more than $250,000 can’t possibly raise enough revenue to fund Mr. Obama’s new spending ambitions.
Consider the IRS data for 2006, the most recent year that such tax data are available and a good year for the economy and “the wealthiest 2%.” Roughly 3.8 million filers had adjusted gross incomes above $200,000 in 2006. (That’s about 7% of all returns; the data aren’t broken down at the $250,000 point.) These people paid about $522 billion in income taxes, or roughly 62% of all federal individual income receipts. The richest 1% — about 1.65 million filers making above $388,806 — paid some $408 billion, or 39.9% of all income tax revenues, while earning about 22% of all reported U.S. income…
Fast forward to this year (and 2010) when the Wall Street meltdown and recession are going to mean far few taxpayers earning more than $500,000. Profits are plunging, businesses are cutting or eliminating dividends, hedge funds are rolling up, and, most of all, capital nationwide is on strike. Raising taxes now will thus yield far less revenue than it would have in 2006.
Mr. Obama is of course counting on an economic recovery. And he’s also assuming along with the new liberal economic consensus that taxes don’t matter to growth or job creation. The truth, though, is that they do. Small- and medium-sized businesses are the nation’s primary employers, and lower individual tax rates have induced thousands of them to shift from filing under the corporate tax system to the individual system, often as limited liability companies or Subchapter S corporations. The Tax Foundation calculates that merely restoring the higher, Clinton-era tax rates on the top two brackets would hit 45% to 55% of small-business income, depending on how inclusively “small business” is defined. These owners will find a way to declare less taxable income.
This article is also being covered by Allahpundit at Hot Air, but that isn’t all. Ed Morrissey is covering an article by ABC’s Jack Tapper, probably one of the more respected journalists in this now left-leaning “propaganda machine” which called itself the MSM, which discusses the slew of new tax hikes being proposed by Obama to meet the unattainable demands of his administrations spending…
1) On people making more than $250,000.
$338 billion – Bush tax cuts expire
$179 billlion – eliminate itemized deduction
$118 billion – capital gains tax hike
Total: $636 billion/10 years
$17 billion – Reinstate Superfund taxes
$24 billion – tax carried-interest as income
$5 billion – codify “economic substance doctrine”
$61 billion – repeal LIFO
$210 billion – international enforcement, reform deferral, other tax reform
$4 billion – information reporting for rental payments
$5.3 billion – excise tax on Gulf of Mexico oil and gas
$3.4 billion – repeal expensing of tangible drilling costs
$62 million – repeal deduction for tertiary injectants
$49 million – repeal passive loss exception for working interests in oil and natural gas properties
$13 billion – repeal manufacturing tax deduction for oil and natural gas companies
$1 billion – increase to 7 years geological and geophysical amortization period for independent producers
$882 million – eliminate advanced earned income tax credit
Total: $353 billion/10 years
What does all this mean? As I have stated before, by over taxing America’s wealthy, you scare off business and jobs. Why would a company want to pay heavy taxes to employ uneducated union workers in America, when they can hire uneducated non-union workers in other countries, like China, for a fraction of the cost? Why would they want to set up factories on American soil and have to pay heavy taxes which they wouldn’t incur in other countries, like Ireland or even Canada? It is called the fragmentation of the production process, and while certain costs are incurred by doing this, many see it as being more cost effective, especially when the government has taken such a hostile stand against capitalism. One has to wonder whether or not these people have taken a class in economics, whether they have ventured out of their “socialist cliques”, their “elitist clubs”, and see how the world actually operates. All this talk of spreading the wealth, making sure everyone gets “an equal slice of the pie”, leads to shrinking said pie, and reducing the overall amount that people get… It isn’t just me that thinks this…
Michelle Malkin herself has taken part in anti-stimulus protests, rallying her readers and those concerned with the amount of spending this administration has already signed on for. Go on her site, take a look at some of the stories, especially this one which outlines much of the wasteful spending, ACTUALLY EDUCATE YOURSELF on what is going on because you won’t hear about this from CNN, the news station which would rather discuss their love for Michelle Obama than actual news (since when did she become a legitimate topic for Showbiz Tonight?). It is getting downright disturbing…
Spending on this level can’t even be justified, especially when it is simply Democrats paying back those who helped get them into office… Old Chicago politics is now the new “Hope and Change” way of Washington…