Free Markets, Free People
Quote of the Day: How big and intrusive has government gotten edition
The quote comes from a Heritage Foundation post on taxes and notes that today is “tax freedom day”, or the day in which what you earn from now on actually is supposed to belong to you:
In other words, for the first 111 days of the year, everything you earned went straight to Uncle Sam. Compare that to back in 1900, when Americans paid only 5.9% of their income in taxes and Tax Freedom Day came on January 22.
And in 1900, Americans felt that amount was outrageous. But this puts in context the huge growth of government in the last century.
Here’s the problem though, it’s going to get worse – 2013 would be the year of the Obama tax increases if he’s re-elected and Congress doesn’t move to keep the current tax rates (which the left insists on calling the “Bush tax cuts” but which have, instead, been our current tax rates for years).
If those tax rates are allowed to expire, you can tack on another 11 days before we see “tax freedom day”.
That’s all due to Taxmageddon — a slew of expiring tax cuts and new tax increases that will hit Americans on January 1, 2013, amounting to a $494 billion tax hike. Heritage’s Curtis Dubay reports that American households can expect to face an average tax increase of $3,800 and that 70 percent of Taxmageddon’s impact will fall directly on low-income and middle-income families, leaving them with $346 billion less to spend.
Like sequestration, these tax increases are scheduled to happen on January 1st of next year. Both are likely to have huge negative economic impacts.
On the tax side, Heritage’s Dubay points to immediate impact of some of the taxes that will become effective on that day:
If Congress fails to act, workers won’t have to wait very long to feel the effects. Every payday, they would see a jump in their payroll tax as it takes a bigger bite out of every paycheck. And that only reflects one of the direct hits they’ll face. They’ll feel the pain of other tax hikes they won’t pay directly, like the health care surtax on investment income and salaries over $250,000 — which begins in 2013 along with five other Obamacare tax hikes — because these hikes will slow job creation by taking away resources from businesses, investors, and entrepreneurs.
James Pethakoukis puts it into a chart for you:
If you combine all the other tax increases from 1980-1993, they add up to 3.3% of GDP, according to the brilliant budget team at Strategas Research. The coming “taxmageddon” of 2013 surpasses all those tax hikes combined! How could the Obama White House even toy with the idea, which it has, of letting them happen?
If they happen, can anyone guess what will happen to the economy?
So obviously, stopping this is a priority with President Obama, right?
That fact, though, isn’t making its way into President Obama’s talking points. He’s not mentioning that, absent action, Americans will pay higher income taxes, payroll taxes, and death taxes. He hasn’t spoken about the impending increase in the marriage penalty, the decrease in the child tax credit and the adoption credit, or how those who get tax breaks for education or dependent care costs will see them decreased. He hasn’t mentioned the new taxes under Obamacare, or how middle-income families will be forced to pay higher taxes under the Alternative Minimum Tax — a measure that was only supposed to impact “the rich.” Sound familiar?
Instead of dealing with Taxmageddon, President Obama wants to change the subject with a gimmicky policy like the “Buffett Tax.” The Senate obliged him yesterday by voting on this distraction. Fortunately, it was rejected. Still, while President Obama trains his fire on this class warfare policy, he ignores that if Taxmageddon strikes, the lower and middle class Americans that he says he is fighting for will pay substantially more in taxes to the federal government starting on January 1. Call it the unadvertised side effect of Barack Obama’s failed leadership.
So many “unadvertised” leadership failures in so few years. Let this happen and watch the economy head toward the bottom again. Of course, Obama won’t particularly care if he’s re-elected. He’ll no longer be answerable to the American people. He’ll have more “flexibility”. He’ll be free to move more to the left.
A wonderful scenario and, in answer to the question in the title – you ain’t seen nothin’ yet.