Free Markets, Free People

The Coming Tax On Everything

Over the past few days, I’ve been highlighting the fact that the promise of tax cuts for 95% of Americans is illusory at best. If your bottom line is net spendable income, then despite the Obama promise, you’re going to have less of it when all his plans for your income are passed into law. Or, as I’ve been pointing out, while he’ll make a big deal of the tax cut for the 95% on the one hand, he’ll be taking what he’s cut back and more with the other.

The Detroit News editorial board seems to have figured that out:

President Barack Obama’s proposed cap-and-trade system on greenhouse gas emissions is a giant economic dagger aimed at the nation’s heartland — particularly Michigan. It is a multibillion-dollar tax hike on everything that Michigan does, including making things, driving cars and burning coal.

Tell me – who is it that has been whining for years about losing manufacturing jobs to overseas competitors? Who has thumped the podium about “outsourcing”? Who has claimed to be the champion of the working man?

The same crew that wants to enact draconian taxes which will affect the very companies and jobs they claim they want to save or create. And while the companies will do all they can to pass on the cost to the consumer (thereby negating any tax cut), they will have to absorb some of the cost to stay competitive.

Doing so will drive up the cost of nearly everything and will amount to a major tax increase for American consumers.

Or companies can go to countries who don’t have cap-and-trade laws such as China and India and set up there. Of course if they do, they’ll be called “unpatriotic” and the government who forced the issue will declare them the problem.

And the net result?

The proposed tax would take effect in 2012 and has the very real potential to throw the nation back into recession, if indeed the expected recovery has arrived by then. It’s impossible to raise costs for such basics as manufacturing and energy production by more than half a trillion dollars over a decade and not have the effects felt across the economy.

Economic common sense. But you see, the 2012 effective date is a result of political calculation. If we are seen to be climbing out of the recession by 2011, most likely the Obama administration will get a second term. After that they couldn’t care less how they or their policies are viewed. And it is far enough from 2016 that they think it may be politically survivable for the Democrats.

However it also means that if the GOP starts hammering on this now and making the same sense the Detroit News editorial board is making, there’s a chance they can use it as an issue to try to recapture power. That assumes, of course, they have the smarts and the spine to stand up, make the consequences known and ensure they frame the argument instead of letting the Democrats spin it away.

How likely is that?

Oh, and just for the record:

A similar program in Europe hasn’t worked. European automakers complained about carbon dioxide limits the European Union proposed in 2007 as damaging to the economy.

Ya think?

~McQ

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5 Responses to The Coming Tax On Everything

  • And I wondered why (for just a minute) you were so wound up.  I found my answer.  Hope you like the report.  Just a public service announcement.

    http://www.pbs.org/wgbh/pages/frontline/shows/workplace/view/

  • What’s fascinating is that this was an op-ed in the DETROIT paper.  A bastion of democrat (spit) strength.  Even they are smart enough to see that democrat (spit) policies are bloody lethal.

    The problem is that MiniTru – including (I presume) the Detroit News editorial board - has done a thorough job convincing enough people over the past several years that:

    (A) Global warming is real and will kill us all unless we drastically reduce carbon emissions;

    (B) Government and especially democrats (spit) know best;

    (C) Capitalism, including all those nasty ol’ industries that suddenly are important to the editorial board, is B-A-D and responsible not only for global warming and the oppression of the working class but also the current economic troubles.

    In other words, MiniTru has set the stage for TAO and his band of idiots to do… exactly what they promised during the campaign.  NOW some people in MiniTru are waking up and realizing just how destructive those things are, not only to the Wall Street fatcats that they pretend to despise, but to all the little people who (like it or not) are employed by those same fatcats’ corporations.

    They have sowed the wind and are starting to see that they must also reap the whirlwind.  God help us all.

  • President Barack Obama’s proposed cap-and-trade system on greenhouse gas emissions is a giant economic dagger aimed at the nation’s heartland — particularly Michigan. It is a multibillion-dollar tax hike on everything that Michigan does, including making things, driving cars and burning coal

    **

    So?  You knew what this guy was about. You voted for him in droves.

    Your cries of suprise now ring hollow. Too late now for buyers remorse. And to be honest, I doubt you even have that.  You know you’re going blue again next election.

    Suffer. Just stop whining about it. You wanted it, you’re getting it.

    Good and hard.

  •  
    Income tax rates will reset to the 2001 rates for 2011; 15%, 27.5%, 30.5%, 35.5% and 39.6%. President Obama said he would allow them to reset. Presently they are 10%, 15%, 25%, 28%, 33% and 35%. And look at the impact on the poorest Americans; the special low 10 percent bracket is eliminated. Also earnings were raised before having to pay taxes under Bush.  Mr. Obama continuously says that 95% of us will not see increased taxes!
     
    The media have and pundits have ignored the specific the tax reset info and concentrated on the >$250,000 earnings increased tax rate to the 39.6% level, the other increases, exemption limits and the indirect cap and trade costs for all of us. 
     
    Now I have provided this in my blog and others.  A commenter said that the low end tax rates were to stay, only the top rates would increase.  I have yet to find that in Google and I asked the commenter to direct me to the info so I could correct my blog post.  No reply yet. Can anyone direct me to the specific info to confirm the commenters statement?  

  • Ooooo.  Don’t forget jacking up the spectrum licensing fees for cell phone carriers from $50M per year to $500M per year.  Wonder who that cost gets passed along to…

    http://news.cnet.com/8301-13578_3-10173072-38.html