Barack Obama ran his campaign on a promise not to raise taxes on Americans earning under $250,000 a year. He has broken that pledge multiple times, though not by using the income tax. Now he wants to hammer the nation’s most productive workers with an increase in taxes, in the heart of an economic trough. It should be taken as fact that the government does not multiply money nearly as efficiently as the private sector. Government has no profit motive, and therefore no reason to deploy assets in such a way as to maximize return. Since government doesn’t multiply money, during an economic trough it makes little sense to give the government more of the private sector’s economy. So Americans are rightly wondering why their president wants to tax them more, rather than making the cuts to spending that this country desperately needs to balance the budget.
The president’s own bipartisan Deficit Commission has urged him to cut spending and taxes. That would be a great start. (Ed. note: I’m not endorsing the Commission’s recommendation here, the final recommendation hasn’t been released yet.) The path to a growth economy is clear. Cuts in taxes that will allow American businesses to compete with developed world peers, and cuts to government spending that will free up America’s capital to pursue positive growth projects, rather than bridges to nowhere.
Instead, Americans are looking forward to increased taxes next month. You should start to see your paycheck diminish in January if Congress and the president can’t agree to extend the Bush tax cuts. The Wall Street Journal concisely reports that:
Capital gains and dividend tax rates will climb to 20% and 39.6%, respectively, from 15%, and the top two income tax rates will climb to 38% and 41% (including deduction phaseouts), from 33% and 35%. The typical family with an income between $40,000 and $75,000 a year will pay as much as $2,000 more in 2011, as the 10% tax rate bracket and the $1,000 per child tax credit vanish.
It makes one wonder why the president is so hell bent on raising taxes? The progressive tax system, used to redistribute wealth is at the very core of the 10 point plan laid out by Karl Marx for running a communist country. This is, as has been proven by the collapse of so many Marxist countries, not a good game plan for a country.
Retired and soon to be retired Americans will be seeing a major reduction in their standard of living under the president’s proposed tax plan. As they are hammered by the government for their income, no doubt the president will offer the elderly assistance to offset the taxation. Is that what America stands for? Taxing people until they are forced onto the public dole is not a strategy for freedom, it’s a strategy for oppression. The elderly in the formerly communist countries today face a hard existence because they weren’t given the ability to build a retirement fund or own any assets at all during their lifetime. Now what do they have to survive on? Only shrinking government pensions as their countries turn to austerity measures. American retirees survive off the wealth they generated during their lifetimes, but if all that wealth is given to Uncle Sam, they will only have Uncle Sam to turn to during their old age.
Another tax, poised to be resurrected is the Estate Tax, better known as the death tax. The death tax is about to rise to 55% on assets over $1 million. Say you own a home worth $500,000, and have an investment portfolio worth $1,000,000. If you were unlucky enough to meet the grim reaper on January 1st, $500,000 of your wealth would be subject to Uncle Sam’s 55% tax rate. That’s $275,000 your children will be forced to pay.
This doesn’t even include the many family businesses that are sacrificed at Uncle Sam’s alter when their owner passes away. Family farms have borne the brunt of the death tax for sure. How any senator from a farm state, or any state, could allow small businesses like farms to be ravages in such a way is outrageous. Where are the calls from Democratic senators like Ben Nelson to stop the death tax?
I would think folk would be bombarding their congressmen and senators telling them to stop the tax increases. Especially the retired and soon to be retired. A great way to do that without a lot of hassle is to use the tools supplied by FreedomWorks. You can instantly contact your congressmen about the death tax by clicking here. It won’t take you long at all.
It is hard to imagine how anyone could support the president in his drive to raise taxes at this juncture in American economic history. It is even harder how some economists argue that he should. Paul Krugman wants you to pay even higher taxes. Take a look at my featured video today for a horrific interview with Krugman.