As the U.S. economy continues its slow but steady march into economic depression, the Obama obsession with taxing millionaires and billionaires continues. Consider, Obama Tax Plan Would Ask More of Millonaires.
President Obama on Monday will call for a new minimum tax rate for individuals making more than $1 million a year to ensure that they pay at least the same percentage of their earnings as middle-income taxpayers, according to administration officials.
With a special joint Congressional committee starting work to reach a bipartisan budget deal by late November, the proposal adds a new and populist feature to Mr. Obama’s effort to raise the political pressure on Republicans to agree to higher revenues from the wealthy in return for Democrats’ support of future cuts from Medicaid.
Mr. Obama’s proposal is certain to draw opposition from Republicans, who have staunchly opposed raising taxes on the affluent because, they say, it would discourage investment. It could also invite scrutiny from some economists who have disputed Mr. Buffett’s assertion that the megarich pay a lower tax rate over all, because many in that group actually make more from wages than from investments.
In a speech on Thursday, Speaker John A. Boehner, Republican of Ohio, agreed with Mr. Obama that the deficit-reduction committee “can tackle tax reform, and it should,” to get rid of many tax breaks and allow for lower marginal rates. “Tax increases, however, are not a viable option for the joint committee,” Mr. Boehner said. Instead, he emphasized that meeting the deficit-reduction target should come largely from overhauling benefit programs like Medicare, Medicaid and Social Security.
The Obama proposal has little chance of becoming law unless Republican lawmakers bend. But by focusing on the wealthiest Americans, the president is sharpening the contrast between Republicans and Democrats with a theme he can carry into his bid for re-election in 2012.
Does the latest Obama tax proposal have merit or is it simply an attempt to capture votes based on a class warfare strategy? Half of all American households already pay zero income tax and the top 5% of Americans by income already pay 60% of all income taxes. As pointed out by the Wall Street Journal, there is No Easy Answer On Tax Issue.
“We’re approaching nearly half of the United States population that doesn’t pay any income taxes,” Mr. Perry said in Iowa, when asked about combating an “entitlement culture” in the U.S. “And I think one of the ways is to let everybody, as many people as possible…be able to be helping pay for the government that we have in this country.” In Nashua, N.H., Mr. Romney hit a similar theme: “We want to make sure people do pay their fair share.”
Of the poorest 20% of American households, those earning less than $16,812 a year, 93.4% pay no income tax. But even 30% of the middle class earning between $33,542 and $59,386 are exempt. Some Republican economists say the tax policies that cause this phenomenon have gone too far, contending that people who don’t pay income taxes have an incentive to support politicians who promise more federal programs, since they aren’t paying for them.
Moreover, they argue the tax code has become too dependent on too few people. Sixty percent of the income tax is paid by 5% of U.S. households, said Douglas Holtz-Eakin, a former Congressional Budget Office director who led domestic policy for John McCain’s 2008 campaign. “We’re going to have to have tax reform,” he said. “The system is broken.”
The U.S. tax code is a disgrace from every aspect but the odds of it being reformed by a deeply divided Congress are zero. Taxes on all income groups have been too low to cover massive government spending programs and the result is a debt crisis that threatens the solvency of the Nation. Our political leaders have promised unaffordable benefits to a vast array of constituents and paid for it by maxing out the Nation’s credit limits.
Ultimately, a solution to the Nation’s looming insolvency will require not only dramatic reductions of promised benefits but also large tax increases across all income levels.
After signing into law legislation that increased the national debt by a massive $2.4 trillion, the President said he wants to solve other issues including tax cuts for the middle class and extended unemployment benefits. No mention was made of focusing on job creation but the President said he understood what the voters really wanted. President Obama said “They want us to solve problems.” - Barrack Obama 2011
How would Ronald Reagan respond to the profound crises that the Country faces today? Does the massive power grab by the government and crippling levels of debt, taxes and regulation have any connection to an unemployment rate of almost 20%? Are small business owners, the engine of job creation in America, being killed by the government?
“In this present crisis, government is not the solution to our problem; government is the problem. From time to time we’ve been tempted to believe that society has become too complex to be managed by self-rule, that government by an elite group is superior to government for, by, and of the people.” - Ronald Reagan 1981
“I’m convinced that today the majority of Americans want what those first Americans wanted: A better life for themselves and their children; a minimum of government authority. Very simply, they want to be left alone in peace and safety to take care of the family by earning an honest dollar and putting away some savings.” - Ronald Reagan 1976
It’s time for new tactics and new leadership. Socialism does not work as we can observe by looking at two of the biggest national financial disasters in history - Cuba and Venezuela. The command and control economic policies of these two countries have condemned their entire populations to a life of grinding poverty and hopelessness.
The Two Stupidest Men On Earth
Here’s the Wall Street Journal’s score card on the performance of Obama after 923 days, in alphabetical order.
A is for the Arab world, and our standing in it: This year, Zogby International found that 5% of Egyptians had a favorable view of the U.S. In 2008, when George W. Bush was president, it was 9%.
B is for the federal budget deficit, which is estimated to come in at around 11% of GDP in 2011, up from about 3% in 2008.
C is for China’s military budget. For 2012, Beijing plans to increase spending on defense by 12.7%. The Obama administration, by contrast, proposed Pentagon cuts in April averaging out to $40 billion per year over the next decade, and Congress may soon cut a lot more.
D is for—what else—the federal debt, which grew to $14.3 trillion this month from $10.7 trillion at the end of 2008. D is also for the dollar, which has lost almost half its value against gold since Aug. 2008.
E is for energy. The average retail price of a gallon of gas hovered near the $1.80 mark when Mr. Obama was inaugurated. It has since more than doubled. E is also for ethanol, the non-wonder fuel the U.S. continues to subsidize to the tune of $5 billion a year.
F is for free trade. Bill Clinton signed Nafta in 1994, which facilitates $1.6 trillion in the trade of goods and services between the U.S., Mexico and Canada. George W. Bush midwifed more than a dozen FTAs, from Australia to Singapore to Morocco to Bahrain. Number of FTA’s signed by the current president: zero.
G is for Guantanamo, which remains open, and for Gadhafi, who remains in power, and for Greece, which offers a vision of America’s future if we don’t reform our entitlement state.
H is for Hillary Clinton, who—I can’t believe I’m writing this—would have made a better president than Mr. Obama.
I is for Israel, a Middle Eastern country the president claims to support even as he routinely disses its prime minister, seeks to shrink its borders and—why not?—divide its capital.
J is for jobs. In November 2008, president-elect Obama promised he would create 2.5 million jobs by 2011. By October 2010 the economy had shed 3.3 million jobs.
K is for Karzai, Hamid, Afghanistan’s feckless leader. Still, the Obama administration probably did itself no favors by publicly dumping on the man, leading him to seek new best friends in Tehran.
L is for Laden, Osama bin. The president’s greatest triumph, which will forever put him one notch—if only one notch—above Jimmy Carter.
M is for Mexico, a country that manages 5.4% unemployment and 4.2% annual growth even as it fights a war against the drug cartels.
N is for NATO, once a pillar of Western security, which Mr. Obama is in the process of destroying through his decision to withdraw from Afghanistan and his refusal to give NATO the push it needs to win in Libya.
O is for ObamaCare, which goes far to explain B, D, J as well as the Greek part of G.
P is for Pyongyang, whose ruler the administration is once again attempting to engage in the six-party talks. This is after the Kim regime welcomed Mr. Obama’s plea for a nuclear-free world by testing a nuclear bomb, torpedoing a South Korean ship, shelling a South Korean village, and unveiling a state-of-the-art uranium enrichment facility.
Q is for QE2, the most disastrous experiment in monetary policy since Fed Chairman William Miller’s low-interest rate policy crashed the dollar in 1978.
R is for the reset with Russia, the principal result of which is an arms-control treaty that brings us to parity in strategic nuclear weapons, leaves us behind in the tactical category, and ill-equips us for the challenge of a proliferating world.
S is for shovel-ready. Enough said.
T is for taxes, which Mr. Obama would like to see raised for “millionaires and billionaires”—curiously defined as people making $200K and up.
U is for Iran’s uranium enrichment. When Mr. Obama came to office promising to extend his hand to the mullahs, Iran had enriched 1,000 kilos of uranium. Today they have produced more than 4,000 kilos.
V is for Venezuela, a country whose extensive subterranean links to Iran the administration has consistently downplayed.
W is for the Dubya, whose presidency now looks like a model of spending restraint.
X is for Liu Xiaobo, an example of what a deserving winner of the Nobel Peace Prize looks like. X is also for Xanax, likely to be remembered as the drug of choice of the Obama years.
Y is for Yes, We Can! Unfortunately, it’s also for Yemen.
Z is for zero, which is the likelihood that one of the current GOP hopefuls will defeat Mr. Obama in 2012.
Congress and the Obama administration continue to move forward with economy killing legislation such as Cap & Trade, Health Care Reform and Card Check legislation, to name a few. The gorilla in the room that no one wants to talk about is the massive deficit being forced on future generations.
The way Michael Whalen of the National Center for Policy Analysis figures it, the national debt is $11 trillion, but there’s also $107 trillion in unfunded entitlement liabilities for a total of $118 trillion, more than eight times the gross domestic product. More ominously, the Federal Reserve Board says federal liabilities are 2.3 times America’s total private net, which is just $51.5 trillion. “Ask any accountant, banker, or anyone remotely familiar with simple accounting knowledge if we can service this debt, and the collective answer is a resounding ‘no.’ Any business with these ratios would be a complete basket case, hopelessly bankrupt.” Hence, the headline on Mr. Whalen’s Washington Times op-ed Aug. 11: “We broke the bank.”
This is by far the greatest problem that our country will be facing, assuming that our economy and country can survive this onslaught of Socialist Programs. How much of the Federal Budget can be spent on debt repayment as our economy continues to shrink?
In other words….”I’m sorry Mr Geithner , based on your current situation, we can not approve your loan at this time. Feel free to visit Beijing again when your situation improves”.
The United States is functionally bankrupt. Our collective capacity to deal with this astonishing fact is seemingly nonexistent. Our national politics have become show business, exhibiting a complete refusal to strategically respond to this reality.
Even if we significantly slash the federal entitlements by half, we cannot fix this problem. Even if we increase federal receipts from the 50 year average of 18 1/2 percent of GDP to say 27 percent, killing private-sector growth, we cannot fix the problem.
Perhaps President Obama is planning on a fast track bankruptcy for the federal government, just as he did for General Motors and Chrysler. The result would be SEIU (Service Employees International Union) making the decisions for Congress and ACORN running the Treasury.
President On A Roll
It seems as if the President is enjoying an extended honeymoon with both the press and voters, while the Republicans remain disarrayed and powerless. Public optimism and confidence is surging based on the hope that the steps taken by the Obama administration will lead to brighter economic days. The voters and Congress have effectively given the President what almost amounts to dictatorial powers.
The Obama infatuation is a great unreported story of our time. Has any recent president basked in so much favorable media coverage? Well, maybe John Kennedy for a moment, but no president since. On the whole, this is not healthy for America.
Our political system works best when a president faces checks on his power. But the main checks on Obama are modest.
The study examined 1,261 stories by The Post, the New York Times, ABC, CBS and NBC, Newsweek magazine and the “NewsHour” on PBS. Favorable articles (42 percent) were double the unfavorable (20 percent), while the rest were “neutral” or “mixed.” Obama’s treatment contrasts sharply with coverage in the first two months of the Bush (22 percent of stories favorable) and Clinton (27 percent) presidencies.
The infatuation matters because Obama’s ambitions are so grand.
The press has become Obama’s silent ally and seems in a state of denial. But the story goes untold: Unsurprisingly, the study of all the favorable coverage received little coverage.
Unlimited power allows one man to accomplish what could not otherwise be done with a gridlocked political system, but also allows for potentially unwise policy decision implementations that may have dangerous long term consequences. Our basic governmental structure of checks and balances seems to be in peril. Here are some more thoughts on this matter.
American Capitalism Gone With A Whimper
It must be said, that like the breaking of a great dam, the American decent into Marxism is happening with breath taking speed, against the back drop of a passive, hapless sheeple, excuse me dear reader, I meant people.
The final collapse has come with the election of Barack Obama. His speed in the past three months has been truly impressive. His spending and money printing has been a record setting, not just in America’s short history but in the world. If this keeps up for more then another year, and there is no sign that it will not, America at best will resemble the Wiemar Republic and at worst Zimbabwe.
Obama Led the US Economy Into a Fiscal Trap Containing a Monetary Time Bomb
The majority of Americans elected an arrogant and bumbling ideologue to the presidency and so the rest of the world — little Israel in particular — will have to pay the price. However, Economics is what invariably brings the Obama’s of this world undone.
Despite the bitter lessons of history — a subject that Obama is as deeply ignorant of as he is of economics — he does not really believe in the existence of economic laws. Let us not forget that this is the same man who thinks he can regulate bubbles out of existence, even though he and his cronies are totally ignorant as to the origin and nature of this economic phenomenon.
Obama and his brilliant economic advisors have driven the US economy into a fiscal trap containing a monetary time bomb. And the markets are taking notice.
It’s a pretty state of affairs when China feels impelled to lecture the US on the need for exercising greater fiscal and monetary responsibility. Nevertheless Bernanke and the Obama administration appear to be completely oblivious to the situation. So much so that the Fed was authorised to print $1.75 trillion in new money so as to buy Treasury bonds. It’s almost as if they were deliberately thumbing their noses at the rest of world.
If the economy resumes its downward decline or the average American does not see his financial situation improving soon, expect the Obama administration’s honeymoon to come to an abrupt end. In the final analysis, it is always about jobs and incomes.
Can debt create prosperity?
A common question asked these days is, if too much debt caused the financial crisis, how can more debt solve the problem? Most American families know that their basic problem is too little income and too much debt. Common sense tells us that unless debt is balanced by inceasing income to service the payments, the end result is bankruptcy, and this rule applies equally to individuals and nations.
WASHINGTON — Just how much government debt does a president have to endorse before he’s labeled “irresponsible”? Well, apparently much more than the massive amounts envisioned by President Obama. The final version of his 2010 budget, released last week, is a case study in political expediency and economic gambling.
Let’s see. From 2010 to 2019, Obama projects annual deficits totaling $7.1 trillion; that’s atop the $1.8 trillion deficit for 2009.
One reason Obama is so popular is that he has promised almost everyone lower taxes and higher spending. Beyond the undeserving who make more than $250,000, 95 percent of “working families” receive a tax cut.
Consider the extra debt as a proxy for political evasion. The president doesn’t want to confront Americans with choices between lower spending and higher taxes — or, given the existing deficits, perhaps less spending and more taxes.
At best, the rising cost of the debt would intensify pressures to increase taxes, cut spending — or create bigger, unsustainable deficits.
At worst, the burgeoning debt could trigger a future financial crisis. The danger is that “we won’t be able to sell it (Treasury debt) at reasonable interest rates,” says economist Rudy Penner, head of the CBO from 1983 to 1987. In today’s anxious climate, this hasn’t happened. American and foreign investors have favored “safe” U.S. Treasuries. But a glut of bonds, fears of inflation — or something else — might one day shatter confidence. Bond prices might fall sharply; interest rates would rise. The consequences could be worldwide because foreigners own half of U.S. Treasury debt.
The Obama budgets flirt with deferred distress, though we can’t know what form it might take or when it might occur. Present gain comes with the risk of future pain. As the present economic crisis shows, imprudent policies ultimately backfire, even if the reversal’s timing and nature are unpredictable.
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