Tax Hikes For All

Calling for a "rollback" of the tax cuts for "the wealthy" has been a populist mantra for President Obama and his allies in Congress. As with much of our president's rhetoric, the gulf between his promises and reality is rather wide. The truth is that come January most Americans, not just the rich, will see their taxes increase. The folks at smartmoney.com have looked at what will happen when the tax cuts expire:

You may have been led to believe that only individuals in the top two brackets will face higher federal income taxes when the Bush cuts go bye-bye. Not true!Just a few months ago, it seemed like a safe bet that Congress would make a fix to keep the existing 10%, 15%, 25% and 28% rate brackets to help out lower and middle-income folks. That bet is now looking iffy.

Are you married? Your taxes are going up. A senior citizen with investment income? Your taxes are going up.

Their bottom line:

The Bush tax cuts don't just offer tax relief to the wealthiest Americans. They offer it to just about anyone who pays federal income taxes.

The Democrat majorities in Congress aren't simply contenting themselves by letting tax cuts expire, they are seeking new ways to tax the American public. The borrow and spend spree they have been on since January 09 is just the beginning of their plans for an ever bigger government. When President Obama came to office our national debt equaled 40% of our Gross Domestic Product(GDP), at the end of this year it will be 62%. The president's budget blueprint calls for increasing the debt by a further $10-12 trillion over the next ten years. To pay for all this spending the Democrats have floated two ideas to find the revenue to pay for a government as big as their dreams.

The first is to enact a value added tax(VAT). This tax is very popular in Europe because being based on consumption, it's paid by rich and poor alike. Dictionary.com has the following definition for VAT:

a tax levied at each addition of value in the processing of a raw material, the performance of a service, or the production and distribution of a commodity with each payer except the consumer reimbursed from payment at the next stage.

Their latest brainstorm has been dubbed the ATM tax.This is from The Hill newspaper:

One idea for raising taxes to pay down the debt is the bill introduced this February by Rep. Chaka Fattah (D-Pa.). His “Debt Free America Act” (H.R. 4646) would impose a 1 percent “transaction tax” on every financial transaction — whether paid by cash, credit card or any form of financial transfer, the only exception being transactions involving the purchase or sale of stock. Theoretically, everyone would pay one cent on the dollar for every such transaction in America every day — whether $3 million on a $300 million business acquisition, $300 on the purchase of a $30,000 car, or $5 on a $500 ATM withdrawal.

The Democrats are pushing this idea because it would represent a revenue bonanza for big government.

Using 2008 numbers as an example: There was $755 trillion in total transactions that year. If you deduct the exempted $312 million in stock transactions, that leaves $443trillion in new revenues

What it means for Americans is a quadruple tax whammy. Not only will your income taxes increase, you'll be taxed an extra 1% on what's left when you deposit your paycheck. Also, thanks to the VAT, everything you buy: food, shelter, transportation etc. will cost more, plus the 1% transaction tax.

President Obama promised to "spread the wealth around", but what he's doing with the aid of Congress is to spread the debt around. Very soon, it will be the incomes of the working and middle classes as well as the poor that gets "redistributed" to Washington D.C. along with those of the rich.

Speaker Pelosi is planning a very busy lame duck session after November's election. Every member of Congress, whether they are on the ballot this Fall or not, should answer if they support passage of the VAT and ATM taxes.

DEMOCRAT: Begins with "D" For Debt

and ends with "T" for tax.



Mr. Volker seems to think that Congress will eventually pass the budget that President Obama proposed in toto. President Obama, along with the majority of Democrats in Congress believes that the U.S. needs to emulate the economic model of Western Europe to make life in America more "fair". This lifestyle doesn't come cheaply. Even with unrealistic economic growth projections the administration envisions trillion plus yearly deficits for as far as the eye can see. What does this level of borrow and spend mean for our country?

The debt is projected to equal 140 percent of gross domestic product within two decades. Add in the budget troubles of state governments, and the true shortfall grows even larger. Greece’s debt, by comparison, equals about 115 percent of its G.D.P. today

If 140% of GDP is hard to fathom, here's what President Obama envisions as a "fair" amount for the government to demand from you.

Before the recession, federal spending totaled $24,000 per U.S. household. President Obama would hike it to $36,000 per household by 2020 — an inflation-adjusted $12,000-per-household expansion of government.

Since Americans don't collectively earn enough to fork 36 grand over to the federal government per year without ruining our economy, President Obama intends to put it on our country's charge card. What happens when a nation wracks up that much debt in such a short time frame?

The gold-plated credit rating of the United States — an article of faith across America and, indeed, around the world — may be at risk in coming years as the nation copes with its growing debts.

That sobering assessment, issued Monday by Moody’s Investors Service, provided a reminder that even Aaa-rated United States Treasury bonds, supposedly the safest of safe investments, could be downgraded one day if Washington failed to manage the federal debt.

Moody’s said the United States and other major Western nations, particularly Britain, have moved “substantially” closer to losing their gilt-edged ratings.

In the case of the U.S., the downgrade could come as soon as 2013 at current and projected spending levels. At the same time that President Obama and the Democrats controlling Congress are rushing headlong to remake the U.S. into Europe, the New York Times, a vital cog in the progressive machine notices an inconvenient fact. Europe can't afford to be Europe:

Across Western Europe, the “lifestyle superpower,” the assumptions and gains of a lifetime are suddenly in doubt. The deficit crisis that threatens the euro has also undermined the sustainability of the European standard of social welfare, built by left-leaning governments since the end of World War II.

Europeans have boasted about their social model, with its generous vacations and early retirements, its national health care systems and extensive welfare benefits, contrasting it with the comparative harshness of American capitalism.

Being the Times, they can't seem to comprehend that trying to be a "lifestyle superpower" in the first place caused the massive debts that are now endangering the "benefits" of todays would be European welfare staters. In short, the economic path that President Obama and his Congressional companions have us on is unsustainable and the proof, Greece, is unfolding before our eyes yet they refuse to see it.

What do this year's budget and the president's ballyhooed "debt commission" have in common? Neither will be finished before this Fall's elections. For the first time since 1974 Congress will not pass a budget. Many have speculated that the Democrats don't want to to go "on the record" endorsing massive spending just before they must face the voters in November. The same goes for the debt commission. Congressional Democrats don't want to be saddled with enacting the massive tax increases the commission is guaranteed to recommend. Remember, Peter Orzag downgraded candidate Obama's promise not to raise taxes on the middle class to a pledge to try not to.

Maybe it's watching too many episodes of the X-Files, but I can't help but wonder that this is more than Democrats being afraid of voter wrath at the polls. Senate rules stipulate that the budget can't be filibustered. What if Congressional Democrats are waiting until after the election to pass a budget with the inevitable VAT tax that the president's commission recommends? With all the shady manoevres the Democrats pulled to pass the nationalization of health care I don't think it's a stretch to believe they would pass a VAT tax in a lame-duck session.

Every incumbent Democrat should have to answer where they stand on President Obama's budget proposal and whether or not they would vote for any tax increase in the lame-duck session of Congress. American voters have a right to know where they stand before they head to the polls.

Pres. Obama's Debt Bomb

Yesterday President Obama unveiled his budget for fiscal year 2011 and it comes in at a whopping $3.8 trillion, running a deficit of $ 1.6 trillion. For those of you keeping score at home, this deficit is the largest in our nation's history, beating the previous record of $1.4 trillion set just last year. President Obama promised that he and the Democratic majorities in Congress were going to "bring real change" to Washington DC. In the first three years of his administration President Obama will increase our national debt by $4.4 trillion. Somehow, I don't think the American people had this kind of change in mind back in 2008, when candidate Obama promised to actually cut federal spending.


Right wing zealot Rush Limbaugh lost no time attacking our president's fiscal profligacy "By President Obama's own optimistic projections, American deficits will not return to what are widely considered sustainable levels over the next 10 years." Oh wait, that's from the New York Times.


What are the spending levels that has the Times so concerned? President Obama envisions growing government to the point that even after raising taxes by $2.3 trillion, federal spending will outstrip revenues by $8.5 trillion from 2011-2020. If Congress agrees to go along with the president's spending requests our national debt will be $18 trillion by 2020. The president has traded in his "spread the wealth" rhetoric for a policy of spreading debt to future generations of Americans. President Obama's agenda is a budget buster of epic proportions. The American people simply can't afford his vision for turning our country into a European-style social democracy.

In considering the president's proposed budget and what it means for our future. I hope you take a moment to reflect on these words from our fortieth president.

"This is the issue of this election: Whether we believe in our capacity for self-government or whether we abandon the American revolution and confess that a little intellectual elite in a far-distant capitol can plan our lives for us better than we can plan them ourselves."

"We're broke"

President Obama used those words not that long ago. The reason he dropped all the hopey changiness.

“Is the U.S. Government Bankrupt?” which was asked by Pete Morin in his article published today in American Thinker.
Here are some exerpts:
Before we continue to debate the merits of any Obama health care plan, we need to consider a few important facts.
“By any rational means, we must consider the present condition of our Government’s financial situation. An honest look at those finances would have a prudent person conclude that our government is tacitly bankrupt. Our unfunded liabilities far exceed our assets. Adding up all unfunded liabilities for Social Security, Medicare, Medicaid and Government sponsored pension funds gives us a figure slightly in excess of $100 TRILLION dollars. That’s TRILLION with a ‘T’. The Federal budget deficit for fiscal 2009 will be approximately $1.84 TRILLION. That’s TRILLION with a ‘T’. Over the next ten years the projected deficit will be $9 TRILLION +. That’s TRILLION with a ‘T’. Of course, this projected deficit comes from the Congressional Budget Office and has to be considered a conservative estimate. In 1966 the feds estimated that the cost of the Medicare program by 1990 would be approximately $9 billion dollars/year; the actual cost was $67 billion dollars/year.

Yup. The U.S. government already has 100 trillion dollars worth of bills that it has no ability to pay. I'm sure the president must be thinking that another trillion to nationalize health care is a drop in the bucket. And the benefit to the democratic party of making people dependent on the government is well worth the measley 1% increase in our unfunded liabilities.

The problem for the American taxpayer is that our government's current solution to our deficit problem of printing money to buy our own debt is not sustainable. The dollar is already dropping in value in relation to other currencies. There are only two solutions: to rescind our promises to social security, medicare etc. or the largest tax increase the world has ever seen. While I'm not a gambler, I'd put all my money on the tax increase. Either way I lose.