For the blinded sheeple-More facts on Obama’s Tax Plan


From Protein Wisdom, a preview of Andrew Boucher’s column for the Fort Collins Now weekend edition.   Andrew Boucher sums it up well here:

This election hinges on some very basic questions: Higher taxes or lower taxes?  More government or less government?  When times are tough, who should decide how to spend the money you earn? 

What the column makes clear is that for all of the rhetoric, the numbers don’t lie: Barack Obama and the Democrats are calling for higher taxes, the kind of taxes that kill job creation, threaten retirement savings and, in some cases, are painfully regressive – taking more money, job security and opportunity from those who can least afford it. 

Here’s the analysis of Obama’s Job-killing Socialist Plans Tax Plans by Boucher:

Obama’s tax plan includes four main components: Higher marginal rates; higher estate taxes; higher corporate taxes; and higher taxes on investments. Let’s go through them, one-by-one.

 

[…]

The “Joe the Plumber” tax raises taxes on small businesses, crushing entrepreneurial job creation at the most basic level. Most small businesses are LLC’s or S-Corporations. Every net dollar they earn is taxed as “income” for the owner. Even if a small business owner decides to take a small salary each year and leave money in his or her business for future investment or payroll, all of that money is taxed as “personal income”. Moreover, many small businesses live from contract to contract. They might receive a large check at the end of a year and then set that money aside to make sure they can make payroll for upcoming lean months. Obama’s plan raises taxes on that money, perversely calling it “income”. In the real world, that money is often next month’s paycheck or next year’s job security for employees.

Barack Obama is also calling for higher estate taxes: More “tax the rich” class warfare, more real-world pain for working Americans. The current estate tax rate is scheduled to sunset over the next few years. Barack Obama will set it at 45 percent. For Bill Gates and Warren Buffet, that might not be that big a deal, but what about a family farm or small business? Many are worth enough to trigger the estate tax but only produce a modest income for the owners. Those farms or businesses are taxed at the “value” of the company, not for the revenue they produce. All too often, the only way the next generation can cover their estate tax bill is to sell off the farm or business. Most “Mom and Pop” small businesses don’t survive to the next generation. The estate tax destroys them.

[…] do your parents own their home? If they passed away, would you be able to write a check to cover the estate taxes on the value of that home, or would you have to put it on the market in order to pay the government? On December 31, 2010, the estate tax is scheduled to expire. Barack Obama wants to set it to 45 percent for the highest marginal rates. Part of the American Dream is that our children will live better than we do, that we’ll be able to create something and pass it on. Barack Obama’s tax plan makes that dream unattainable for many Americans.

Barack Obama will raise taxes on “big oil.” Who do you think actually pays for those taxes on “big oil”? We do, of course. Everyone pays, regardless of whether or not we can afford it. We pay higher prices at the gas pump and higher prices for our groceries. (It takes gas to run farm equipment and the trucks that get the groceries to the supermarket.) Barack Obama’s higher taxes on “big oil” will hurt lower-income Americans the most. While they might make for a nice sound bite, taxes on “big oil” are among the most regressive and punitive taxes. Remember those 40 percent who don’t owe federal income taxes? Ironically, Barack Obama’s plan means they take less money home at the end of the week.

Finally, a question: How’s your 401k these days? Your pension? Stocks have plummeted as investors have pulled their money out of the market. Yet just as the market is crashing, Barack Obama is planning to raise taxes on capital gains and dividends, further discouraging investment and cutting an even larger chunk of money out of the stock market. Were you planning on retiring anytime soon? Under an Obama administration, you might be working a few extra years.

We’ve seen this type of “tax the rich” mentality before. In 1989, President George H.W. Bush and the Democrat-controlled Congress passed a ten percent “luxury tax” on yachts priced at more than $100,000, thinking that the “rich” would easily be able to afford the surcharge. What happened? Just two years after the new tax went into effect, the New York Times reported that “In the last two years, about 100 builders of luxury boats — recreational craft costing more than $100,000 — cut their operations severely and laid off thousands of workers.”

Thousands of workers lost their jobs: Machinists, tradesmen, carpenters, laborers, designers. The “tax the rich” mentality – especially higher taxes on business – sends lower and middle income workers to the unemployment office. Higher estate taxes destroy the ability to pass small businesses, family farms or homes on to the next generation. Higher taxes on “big oil” lead to regressive cost increases at the gas pump and the grocery checkout lane. Higher taxes on investments leads to reduced values for retirement accounts, 401k’s and pensions.

That is what Barack Obama is proposing. That is his change for America. Look at it this way: Maybe you can use your government check – oops, I mean “refundable tax credit” – to pay for it all. You might even want to spend it on some new resume paper. You’re going to need it.

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One Response

  1. Campaign promises often wilt after the election. Tax-cut promises are a frequent casualty.

    By backtracking on tax-cut pledges even before the election, Barack Obama threatens to break Bill Clinton’s speed record. It wasn’t until a week before his first inauguration that Clinton openly reneged on his promise to cut taxes for the middle class.

    There’s another similarity. Candidate Clinton and Candidate Obama both promised to raise taxes, too, but only on “the wealthy.” And both proceeded to widen the definition of “wealthy” to encompass more and more taxpayers.

    During his campaign, Clinton said, “The only people who will pay more income taxes are the wealthiest 2 percent, those living in households making over $200,000 a year.” After the election, he proceeded to raise taxes across-the-board.

    Less than a month into his presidency, the Washington Post headlined, “Clinton Asks Middle Class to Pay Higher Taxes; President Issues `Call to Arms’ To Restore Economic Vitality.” After Clinton’s Jan. 14, 1993, news conference, the Post wrote that Clinton “complained that it was only the press, not voters, who considered that issue [tax cuts] important.”

    (Column continues below)

    At first, Clinton maintained that only those earning over $100,000 would pay more under his revised tax plan. But The Heritage Foundation noted it would hit far more broadly, raising taxes for individuals making $25,000 and couples making $32,000. The Los Angeles Times headline echoed that finding: “Clinton Threshold on Tax Bite Dips to $30,000 Incomes.”

    Fast forward to now. Even before the election, Obama is downsizing his tax promises. First he advertised that nobody would pay higher taxes unless they earned over $250,000 a year. Now his TV ads say the threshold is $200,000. And in campaign remarks in Pennsylvania, running mate Joe Biden lowered it again, to $150,000.

    It all parallels the gradual tax plan changes Bill Clinton started making shortly before his election. Then, after his election, the gradual changes turned into dramatic transformation.

    As the New York Times noted in February 1993, “… beginning about a month before Election Day, Mr. Clinton took care to say he was not making a read-my-lips pledge on middle-class taxes. He was making the more narrow pledge that he would not raise taxes to pay for his new spending programs. But the overall thrust of what he promised ran in the opposite direction.”

    On Feb. 15, 1993, just weeks after he was inaugurated, Clinton completed the course change in a national TV address, telling the nation, “I’ve worked harder than I’ve ever worked in my life to meet that goal. But I can’t.”

    His excuse was two-fold. First, he “hadn’t realized” just how bad the deficit was. Second, he believed the people wanted the new spending he had proposed during his campaign.

    Clinton sought to defuse the political damage by promising to hit “the wealthy” harder. His Feb. 6, 1993, radio address told the nation he would “get rid of windfalls for the wealthy before I ask any of the rest of the American people to make a contribution,” and that, “We’re going to ask the most from those who have got the most and gave the least during the past dozen years.”

    Clinton blamed Washington politicians – prior presidents in particular – for supposedly concealing just how bad the federal deficit was, thereby justifying his reneging on his campaign promises.

    In 2008, our deficit is far worse and Obama’s spending pledges are far greater than Clinton’s. Only someone who has been locked in a cave is unaware that this year’s deficit spending is approaching a trillion dollars.

    This is no proof that Obama will renege, Clinton-style. But his recent adjustments in describing whose taxes will go up certainly are not reassuring.

    Obama also is using a looser definition of wealth than Clinton did. The $200,000 threshold that Clinton applied in 1992 equates to $311,000 today, according to the Bureau of Labor Statistics. Obama’s most-recent $200,000 threshold is the same as a $128,255 income would have been in 1992.

    The week before Bill Clinton was inaugurated, Sen. Daniel Patrick Moynihan, D-N.Y., observed, “This week has been rather the clatter of campaign promises being tossed out the window.”

    Those who fear that this year’s campaign promises will also be thrown out the window should keep their eyes wide open and be ready to dodge whatever might fall on their heads

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