A horrifying combination of expiring pro-growth tax policies from 2001 and 2003, the end of the once-temporary payroll tax cut, and just a few of Obamacare’s 18 new tax hikes, Taxmageddon will be the largest tax increase EVER to hit Americans. It’s nearly $500 billion in one year, starting January 1. That’s two months away.
What that means per person:
One result you can count on:
The businesses that would pay the higher tax rates proposed by President Obama earn almost all the income earned by small businesses that employ workers. According to President Obama’s own Treasury Department, these job creators earn 91 percent of the income earned by flow-through employer-businesses. These are the biggest, most successful small businesses. They employ more than half the private workforce, according to an Ernst and Young study. Raising their taxes would destroy more than 700,000 jobs.
Meanwhile the guy in charge? Well he’s got other things on his mind:
It is worth recollecting the array of attacks from the Obama camp that failed to carry the day. Romney’s approval rating is now higher than Obama’s and the Obama team tried portraying Romney as: 1) the “vulture” capitalist; 2) a tax evader and/or a felon for signing (or not signing) Bain documents after he left to run the Olympics; 3) killer of Joe Soptic’s wife; 4) outsourcer of jobs to China; 5) determined to take contraception away from women; 6) ready to give a tax cut to the rich and hike middle-class taxes; 7) egging on the auto industry’s demise; 8) willing to throw granny over the cliff on Medicare; 9) President George W. Bush’s political twin; and 10) Big Bird terminator.
Taxmageddon? Yeah, not so much. Romeny wants that, apparently. No mention of the 18 ObamaCare taxes by our man. Wonder why? Jobs? See result of Taxmageddon. But he’ll tell you he’s focused like a laser beam. Or is that Uncle Joe’s job? Sequestration? What’s that?
He does have a shiny new booklet out that he calls “a plan”. Nothing new, but lots of pictures.
No sweat though … after the 700,000 jobs are destroyed, he’ll talk some more about a “Department of Business”, okay?
I tend to be more optimistic than Dale about the near-to-intermediate future for the economy and for the culture. This may be unusual for a libertarian, but I’m heartened by many of the ways in which our opponents’ system is unsustainable.
Let me start by saying that, given a certain size of central government, libertarians could do worse than spending almost two-thirds of the budget on a few wealth transfer programs (Social Security and Medicare, both mostly funded by flat taxes, plus Medicaid, which gets much of its funding from the states) and a military like ours. Imagine if that money was spent employing domestic police and busybodies.
But even that government is fiscally unsustainable, so we expect our government to eventually be forced to give up some of its “responsibilities.” Assuming the country avoids a sovereign debt crisis, that adjustment might not be so bad for libertarians. Continue reading
Obama 2012: “I never said it would be quick or easy”
Obama 2009: “If this isn’t done it three years, we’re talking about a one term proposition”
Last night we heard, well, we heard a speech that was not so hot. Oh he said lots of stuff, but we’ve all learned over the past 3 plus years not to really trust what he says, but instead to watch what he does. He knows how to own the rhetoric, he just rarely if ever lives up to it.
He’s the “I want to have it both ways” president.
For instance – last night he said this:
We don’t think the government can solve all of our problems, but we don’t think the government is the source of all of our problems …
And the truth is, it will take more than a few years for us to solve challenges that have built up over decades. It’ll require common effort, shared responsibility, and the kind of bold, persistent experimentation that Franklin Roosevelt pursued during the only crisis worse than this one.
On the one hand he tells us government isn’t the answer and on the other, he claims it more government is the answer. Which should we believe?
Well in this case, the latter, given his actions (see ObamaCare which he never once mentioned last night, just like the number “8.2%.). He spent two years going the FDR route with a Democratic Congress and had he not seen his party go down in flames in 2010 and a check put on him in the House of Representatives, you can be assured he and the Democrats would have attempted to grow government even more.
This is a guy on whose watch we almost doubled the debt. Yet not a mention of that last night. Instead he tried to tell us how much he was going to take off the debt . 4 trillion he claims.
Independent experts say that my plan would cut our deficit by $4 trillion.
But another thing you learn listening to this president is to take his claims with a grain of salt. 4 trillion? Only if you believe in “creative” accounting. Jennifer Rubin, quoting the Washington Post’s Glenn Kessler’s fact check of that claim points out why it is a load of rubbish:
By the administration’s math, you have nearly $3.8 trillion in spending cuts, compared to $1.5 trillion in tax increases (letting the Bush tax cuts expire for high-income Americans). Presto, $1 of tax increases for every $2.50 of spending cuts.
But virtually no serious budget analyst agreed with this accounting. The $4 trillion figure, for instance, includes counting some $1 trillion in cuts reached a year ago in budget negotiations with Congress. So no matter who is the president, the savings are already in the bank.
Moreover, the administration is also counting $848 billion in phantom savings from winding down the wars in Iraq and Afghanistan, even though the administration had long made clear those wars would end.
In other words, by projecting war spending far in the future, the administration is able to claim credit for saving money it never intended to spend. (Imagine taking credit for saving money on buying a new car every year, even though you intended to keep your car for 10 years.)
Rather than good arithmetic, independent budget analysts called the maneuver “a major budget gimmick.”
The administration also counts $800 billion in savings in debt payments (from lower deficits) as a “spending cut,” which is a dubious claim. We didn’t realize that debt payments were now considered a government program.
There are a number of other games being played, so fake money is being used to pay for real spending projects. In effect, most of Obama’s claimed deficit reduction comes from his proposed tax increases.
And, as we’ve all learned, those tax increases are but a drop in the sea of red ink this president has unleashed. His appeal to authority notwithstanding, his claim is as empty as his rhetoric.
As most have figured out, the problem isn’t about who is or isn’t “paying their fair share”, it’s about out-of-control spending. In the entire speech last night, that was not a subject that was addressed. Instead, as you saw above, we were given a real preview into what he has in store for us when he can be “more flexible”. FDR type experimentation.
What does FDR type experimentation require? More government and more spending.
Finally, if you missed this, you need to be reminded:
And yes, my plan will continue to reduce the carbon pollution that is heating our planet, because climate change is not a hoax.
That says two things. One, he plans to do the same sort of slow walking for fossil fuel he’s done this past four years while doubling down on his disastrous green policy. And part of the doubling down is undoubtedly to somehow impose a carbon tax that will help feed a ravenous spending machine.
The president who said he would return science to preeminence in decision making during his administration, is now planning on using the pseudo-science of AGW as an excuse to raise taxes on everyone. If that’s not clear, you’ve just not been paying attention.
So he’s right, there’s never been a more clear choice. Continued disaster, keeping a country on the wrong track on that track or an attempt to change that.
Will Romney be better?
He’s actually a turn-around specialist with experience and success in the field. How could he be worse?
I say we make Obama stick with the 2009 statement – for the good of the country.
Let’s see … if I’m a CEO and I can cut my corporate taxes by about 14% by moving overseas, why wouldn’t I?
Feel free to answer that question. And when you do, then perhaps you can figure out one thing that the politicos could have done a loooong time ago to keep corporations here and to spur business expansion and create jobs but haven’t?
Here we go again. Unaccountable bureaucracy has decided it needs to tax you some more:
The Federal Communications Commission is eyeing a proposal to tax broadband Internet service.
The move would funnel money to the Connect America Fund, a subsidy the agency created last year to expand Internet access.
The FCC issued a request for comments on the proposal in April. Dozens of companies and trade associations have weighed in, but the issue has largely flown under the public’s radar.
Well, for the usual reasons, of course:
"Today we propose three goals for contribution reform: efficiency, fairness, and sustainability," Genachowski said. "And we underscore that any reforms to the contribution system must safeguard core Commission objectives, including the promotion of broadband innovation, investment, and adoption."
That’s right friends, they have first claim to your earnings out of "fairness". Because, you know, not everyone has internet and well, it’s a "right" now, or something.
If you’ve ever looked at your phone bill, you know that you’re already paying a fee (tax) called the Universal Service Fund . But that fund just isn’t making it:
Consumers already pay a fee on their landline and cellular phone bills to support the FCC’s Universal Service Fund. The fund was created to ensure that everyone in the country has access to telephone service, even if they live in remote areas.
So last year the FCC established the Connect America Fund to funnel subsidy money (taxes) into construction of an internet infrastructure, because, you know, private companies, the one’s who’ve made the internet what it is today, simply can’t be left to do that.
And in recent years, with more people sending emails instead of making long-distance phone calls, the money flowing into the program has begun to dry up. The Universal Service fee has had to grow to a larger and larger portion of phone bills to compensate.
As more and more homes go fully wireless that fund (taxes) they had is drying up.
Time to update the fee (tax) and fund. How? It’s only "fair" of course.
The FCC could run into legal problems with the Internet Tax Freedom Act, a 1998 law that bans the government from taxing Internet access. But the FCC has long argued that Universal Service is a fee that the providers choose to pass on to consumers and not a tax.
Ah, providers chose to pass that along to consumers so it’s not a tax. Right. I see how that works.
Numerous companies, including AT&T, Sprint and even Google have expressed support for the idea.
Gee, there's a surprise (*cough* cronyism *cough*).
Stephen Moore does yeoman’s work via the Manhattan Institute debunking the left’s class warfare mantra of “tax the rich”. He does it with thousands of words accompanied by many charts. I’m just going to concentrate on a few the charts (do read the piece, it’s good) since they tell the story quite succinctly.
Remember it’s about those nasty rich paying their “fair share”:
For instance, we’re constantly told by those who would tax us more that we’re woefully under taxed compared to the rest of the world (like that’s a good reason to raise taxes). Well that really depends on what income group you’re in, doesn’t it:
So it’s not really true if you’re among the upper 10% in this country is it?
Who is so under taxed then. Well if you look at the tax rolls you’ll find that almost 40% of those filing tax returns had zero or negative tax liability.
That’s right, they paid nothing or actually got money from the government. I’m not talking about a tax refund either. I’m talking about redistributed wealth.
The United States taxes the top 10% of its “richest” people more than anyone else and well above the average tax found in all OECD nations.
That sort of takes the starch out of the “fair share” nonsense that we constantly hear the left prattle on about doesn’t it?
But wait, there’s more as the old Ronco commercial used to say. What about the share of taxes collected. It’s about “fair share”. Surely they’re not really paying what any thinking adult would consider their fair share of taxes are they? Well I don’t know about you, but yes, I think they are. In fact, the top 1% are paying twice as much in taxes as they were in 1980. That seems to go against the conventional wisdom, or at least the claims of the left, doesn’t it?
Why yes, it does. The chart at the right also shows that the top 20% are paying 84% of all income taxes collected. I don’t know what you consider a “fair share”, but I’d guess for most we’re way beyond fairness with this structure.
How much more? And where does fairness enter the question. Looking at this next chart on the left, why should those on the higher end pay more than they are now given the information available? If you have the bottom 50% paying 3% and the bottom 40% paying nothing or getting money via redistribution, yet benefiting from the infrastructure that the left likes to use to claim “you didn’t build that”, who really did build it?
Those paying 3% or those paying 40%? The government has no money and can’t build anything without taxes so who paid to build all that infrastructure that President Obama likes to claim? The chart tells that story, doesn’t it. In fact the top 25% of taxpayers ought to be yelling back at him every time he says that, “well we paid for it”.
There are a ton more examples and charts. There’s one more I want you to see as the left continues to point to taxes on the rich as some sort of panacea to all the revenue shortfalls that ail us (btw, it’s not about revenue, it’s about spending).
Look at what the recession has done to the “golden goose” of the rich.
Oh, my … they’ve actually seen huge percentage drops. Note how many there are in the bottom rung ($200k and above). Sorry folks but that simply isn’t “rich” in the terms I think of rich. That’s likely to be the guy next door who has a family of 5 and is trying to make ends meet. Anyone who thinks $200k is rich isn’t living in the same world as I am. But many of those in that category are going to be the small-business owners and entrepreneurs that help drive the economy.
The plan? Tax them even more. In France, since their tax the rich scheme has been unveiled, the “rich” are looking across borders into friendlier countries. We’ve seen a reduction in all categories of “rich” since 2007. Do you suppose those in those categories now are going to lay back and just accept more taxation without trying to do something to hold on to their hard earned money?
Anyway, rant ends. Read the whole thing. Peruse the graphs. It is very interesting and telling information.
The “you didn’t build that” gang’s attempt to get the “rich” to pay what they characterize as their “fair share” in taxes (when in fact in almost every western country they pay more than their fair share) is about to get tested in France:
The call to Vincent Grandil’s Paris law firm began like many others that have rolled in recently. On the line was the well-paid chief executive of one of France’s most profitable companies, and he was feeling nervous.
President François Hollande is vowing to impose a 75 percent tax on the portion of anyone’s income above a million euros ($1.24 million) a year. “Should I be preparing to leave the country?” the executive asked Mr. Grandil.
The question asked by the client is typical of what will happen if such a tax is imposed … anywhere. If you believe “the rich” are going to lay back and take it, you’re crazy. They will do what is in their best interest and paying 75% taxes on what they earn isn’t in their best interest. We’ve often talked about the Laffer curve and how it applies to taxes. How at some percentage of taxation, revenues will drop and in some cases drop dramatically.
That’s precisely what that client’s question indicates will happen in France with a 75% “rich” tax.
France has a history of punitive taxation which is one reason it no longer is considered much of a economic power:
[T]he proposal is the latest red flag in a country that has long labored under the image of being a difficult place to do business. France has a 33 percent corporate tax rate — the euro zone’s second-highest, after Malta’s 35 percent. That contrasts with the 12.5 percent rate in Ireland, which has deliberately kept a lid on corporate taxes as a lure to businesses.
Businesses don’t have to stay and take France’s coercive tax rates anymore. There are countries more than happy to accept their businesses and the boost to the economy they bring.
And, that goes for “le rich” as well. ‘Leaving the country’, in the case of France, doesn’t necessarily mean moving too far:
“It is a ridiculous proposal, but it’s great for us,” said Jean Dekerchove, the manager of Immobilièr Le Lion, a high-end real estate agency based in Brussels. Calls to his office have picked up in recent months, he said, as wealthy French citizens look to invest or simply move across the border amid worries about the latest tax.
“It’s a huge loss for France because people and businesses come to Belgium and bring their wealth with them,” Mr. Dekerchove said. “But we’re thrilled because they create jobs, they buy houses and spend money — and it’s our economy that profits.”
You’d think, for anyone with an ounce of common sense, this outcome would be obvious. Apparently not. And so France will drive off its rich, see revenues in that income bracket drop even while the tax percentage is increased to 75% and attack those who’ve avoided those taxes as “greedy”. Just watch.
Of course I agree with the words of Dr. Thomas Sowell in that regard:
“I’ve never understood why it is “greed” to keep money you’ve earned, but not greed to take somebody else’s money”.
Yeah … me neither. Right now, the greediest entities on earth are governments.
I know there are some out there that will say, “hey you were whining the other day about taxing the winnings of Olympians”, weren’t you? And now a politician plans to fix it and you bitch?!”
Yes. Yes, I do. Because this is exactly the wrong way to go about it:
Sen. Marco Rubio introduced a bill Wednesday to eliminate the federal government’s tax on Olympic medals, saying the levy amounted to yet another way the government tries to punish those who succeed.
Athletes who win a gold medal also earn a $25,000 honorarium — and with it an $8,986 tax bill to the IRS, according to Americans for Tax Reform, which crunched the numbers. That covers both the honorarium and the tax on the value of the gold in the medal itself.
The silver medal tax comes to $5,385, and the bronze medal tax is $3,502 — including $2 for the value of the bronze medal itself, and the $10,000 honorarium.
That could leave amateur athletes — in many cases still teenagers — facing stiff tax bills when they return to the U.S.
Mr. Rubio said that shouldn’t happen.
Of course you can make special pleadings for all sorts of types of special interest taxpayers, can’t you?
But isn’t taxation supposed to fund the legitimate functions of government and be fairly applied to everyone?
How does exempting special constituencies because of their, well, “specialness”, do that?
Certainly Olympic level (and other) athletes compete in other competitive venues and it wouldn’t be at all unusual for them to win some sort of honorarium there. So why is that taxable and this isn’t?
Quite simply visibility and outrage.
That’s no way to run a government. There’s nothing rational about this exemption. It is as arbitrary as many of the taxes we suffer under.
Important issue? After the economy is up and running again, it is time to push – and push hard – for a total revamping of the tax structure and code in this country.
We suffer one of the least representative and certainly the least fair or equitable tax codes in the world.
Time to take it apart and start over again. And this time, let’s make it impossible for Congress to fiddle with it in terms of rewarding or punishing special constituencies arbitrarily at its whim
Are you watching the Olympics? Did you enjoy the gold medal performances of the US women’s gymnastics team?
It was nice to see them bask in the glory of the fruition of all those years of hard work and sacrifice. They reached the peak of accomplishment. They took the gold. The stories of the athletes were as interesting as the victory. Years of monetary sacrifice, hard work, dedication and practice. Families, who moved to avail their daughter of coaching, who lived from paycheck to paycheck to ensure money was available for their daughter’s training, the hundreds of meets and competitions, etc.
But hey, we all know they “didn’t build that” themselves. They traveled on roads to their practice sites and meets, used other common infrastructure improvements and now they get to pay the piper.
It’s time for them to pay up for winning those gold medals, and the IRS will ensure they do.
At today’s commodity prices, the value of a gold medal is about $675 according to Americans for Tax Reform. And the gold medal brings with it $25,000 in prize money. The IRS will tax them at 35%.
So for all those years of hard work, sacrifice and performance, our gold medalists will pay the IRS $8,986 for each gold medal they win. The silver will cost them $5,385 ($15,000 prize money, and $385 for the medal) and bronze $3,502 ($10,000 prize money, $5 for the medal).
Of course they’ll be about the only athletes in the world so treated because you see, the US is one of the few countries in the world that takes it upon itself to tax the world wide earnings of its citizens.
Because, you know, that infrastructure is everywhere and it’s expensive. </sarc>
But I’m sure we’ll hear from our usual apologists for intrusive government trying to spin these taxes as something both necessary and proper.
Just a note to them – most Americans don’t at all agree with the sentiment that they didn’t build what they now have. But you have to hope the Democrats keep trying to sell that. Our Olympians and their tax experience make as good a case against that as any I can imagine.
Pete DuPont does a little analysis of what should be major issues in the upcoming election. They don’t bode well for the current administration if, in fact, Republicans can get the media to actually pay attention and address them:
• Taxes. Big tax hikes coming in January will serve as dampers on economic growth.ObamaCare imposes a new 3.8% tax on investment income. On top of that, if the Bush tax [rates] aren’t extended, the top income tax rates will rise to 23.8% from 15% on capital gains and to 43.4% from 15% on dividends.
But beyond the economic impact, the Obama administration’s focus on class warfare fuels the nation’s dissatisfaction and plays on an unwise resentment towards successful businesspeople. Mr. Obama continues to push for higher taxes and does so in a way that is an attack on those who are successful–demanding that higher-income taxpayers pay their "fair share," when they already pay more than that.
The economic impact shouldn’t be waved off. When and if both capital gains and dividend incomes are taxed at a higher rate, they will effect both investment and retirement incomes. Don’t forget those” rich folks” whose retirement income is structured to depend on dividends from blue chip stocks they’ve methodically bought in small quantities over their working years. It obviously doesn’t matter that their incomes really don’t reach the “rich” threshold that the Democrats want you to envy, their retirement incomes will take an almost 200% tax increase hit regardless if the current rates aren’t extended. Apparently to collect less than a trillion dollars over 10 years taxing the “rich” (so they’ll pay their “fair share”) vs. spending $46 trillion Democrats are happy to sacrifice those folks.
As for investments, there’ll be a recalculation given the increase on capital gains and it will dampen investments, thus business expansion and finally job growth.
• Energy. The American people hear Mr. Obama talk about a broad energy strategy, but they see an administration that has attacked the coal industry with onerous regulations, done little or nothing to assist the natural gas boom, done what it can to slow down oil production, and wasted money on other initiatives that please green supporters but don’t lower the cost of energy.
This administration’s energy policy is a joke, but unfortunately it’s a very expensive joke. Its priorities are completely backward, but purposefully so. To call what they are doing a “policy” is simply absurd. This is agenda fulfillment with the people’s money on pie-in-the-sky projects that have yet to yield (nor do they even promise to yield) the energy required to make them viable. Meanwhile they’ve done everything humanly possible to retard the fossil fuel industry’s growth at a critical time for our economy. On the issue of energy, this administration gets an F-.
• Health care. Although ObamaCare remains unpopular, the Supreme Court ruling upholding it means that a 17% transfer of our economy from the marketplace to the control of the federal government is coming unless Congress and a President Romney can stop it. At a time when our nation needs lower taxes and more flexibility in health-care decisions, ObamaCare has increased taxes by hundreds of billions of dollars and allowed government to regulate most of our health care decisions.
The secretary of health and human services can now set rules that constrain doctors and hospitals and mandate prices. Mr. Obama once promised us all that if you were happy with your current health plan, you’d be able to keep it. The more we learn about ObamaCare, the unlikelier that looks–and the more the government will intrude in the relationship between doctor and patient.
Despite the disapproval of a majority of Americans, Democrats and this President rammed the legislation through anyway. That should tell most Americans what they really think of their opinion. It is a classic “we know what’s best for you” elitist move.
The second paragraph gives a hint though to the powers this legislation has given an unaccountable government bureaucrat. The Secretary of HHS now has tremendous power to make unilateral decisions that will effect everyone’s health care. Of course, that’s been discussed by some on the right, but for the most part the level of intrusion these powers will confer won’t really begin to be felt until, conveniently, after the election.
• Spending. Federal expenditures under Mr. Obama is both unparalleled and unsustainable. As National Review’s Jonah Goldberg notes, from the end of World War II until the end of the George W. Bush administration, federal spending never exceeded 23.5% of GDP, and the Bush years’ average was around 20%. The Obama spending rates have stayed above 23.5% in every year of his presidency. In the past four years, America has added $5 trillion in federal debt, and around $4 trillion of that was from Obama policies, according to The Wall Street Journal. Federal debt held by the public was 40.5% of gross domestic product in 2008. It’s now 74.2% and rising.
Despite the attempts by Democrats using fudged numbers and trying to spin it so Bush gets the blame, the spending by this administration is, as DuPont points out, “both unparalleled and unsustainable”. And, don’t forget, the President hasn’t signed a budget in over 1,000 days because the Democratic Senate has refused to pass one, despite the Constitutional requirement it do so.
Those are the things we ought to be talking about. Not whether or not Romney pissed off the Palestinians (who doesn’t piss off the Palestinians when they take a principled stand on Israel? How is this even news?).
These are where Obama’s skeleton’s are to be found. He’d prefer to keep this closet door firmly closed. The media, for the most part, seems content to help in that endeavor.
This election isn’t about anything but his administration’s abysmal record. Spending time talking anything else is simply a distraction. Unfortunately, given its unprecedented level of economic intrusion, we’re going to live or die economically with the policies that government applies. Talking about whether a candidate may or may not have insulted the London Olympics isn’t going to change that fact one iota. But it sure does distract from examining the previous administration’s record, doesn’t it?