Mar 25, 2010
TAXES, More Taxes and Trickle up Poverty
...the wealthy are getting way, way too wealthy, and the middle income class is left behind. Wages have not kept up with increased income of the highest income in America. This legislation will have the effect of addressing that mal-distribution of income in America.
But don't you dare call it socialism!
President Obama campaigned on the promise that any tax increases proposed by his Administration would be imposed only on the highest five percent of the population and that taxes for the rest of the people would not go up by a dime. His cutoff point is often said to be $250,000 per annum....later changed to $200,000.
Our annual deficit, now running close to $2 trillion, it's obvious that annual income tax collections are not sufficient to support the level of government we have, nor the debt service on the accumulated debt, which we have already incurred.
So what can we do? Here's the Obama solution. We can service our debt and provide government services either by rolling over and expanding the nation’s debt, print new money, thereby cheapening our currency and risking massive inflation, and find more and more sources to tax, thereby taking more money from the private sector. Sadly, cutting spending is not part of the solution. Congress recently passed a program into law, which requires that each new expenditure be accompanied by a corresponding expenditure cut or a new source of revenue. A step in the right direction, you might think. Not more than three weeks later, however, they passed an $80 billion spending bill and waived the pay-as-you-go requirement.
We all know, tax increases reduce incentives, drive business to cut costs or move outside the United States and reduce research and development expenses and innovative risk taking.
This country evolved from a standing start in the 18th century with a puny population, to an international economic engine, which lifted millions of people worldwide out of poverty as a result of private effort, private capital and private risk taking. We created industry after industry and millions of jobs, yet the 'left' focuses on the successes of the few and those they employ. They get targeted to share their wealth with everyone. Where's the Incentive?
Risk + Success = Tax More.
Then there's the estate tax (or as conservatives call it “the death tax”). Prior to the Bush tax cuts the government taxed (confiscated some might say) 55 percent of a decedent’s taxable estate over $1 million. Under the Bush program the estate tax was to be phased out until there was no such tax in 2010 … only to spring back to life, just like the Bush income tax cuts, in 2011 at the 2001 rate. Everyone believed a compromise would be reached by Congress, not only to prevent the expiration of the tax in 2010, but also to have a lower rate and a higher exemption amount thereafter. Since Congress rarely misses an opportunity to be irresponsible, that hasn’t happened. This clumsy handling of tax policy regarding residual wealth, the net of all taxes paid during someone’s working life, has cost the public billions of dollars in legal fees trying to adjust wills, trusts and marital deductions to this unresolved matter.
Summary: After having one’s income taxed at rates up to 39.6 percent, paying Social Security tax of 6.2% if you are an employee (or 12.4% if you are self employed) on the first $106,800 of earnings, state income taxes of up to 12 percent in some states, Medicare tax of 1.45 percent on total taxable income (2.9% if you are self employed going up to 3.8% on ALL income, including interest, dividends and capital gains, which the left refers to as “unearned income,” under Obamacare), sales taxes up to ten percent in some cities and states, the government under this most hideous of taxes would take 55% of anything you might have left over, from the children or grandchildren.
Like the Picture so far?
Essentially the United States is heading toward what might be called a tipping point. The more we have a society where substantial numbers of people pay no taxes (now close to 40%), the more we create a voting bloc of citizens who will inevitably support new programs for which they don’t have to pay. Business people have a term for this. It is called having “skin in the game” another way of saying that we all need to give up something of value. Are you a morally bad person if you do not want to shoulder an ever-increasing government appetite to provide more and more benefits to a segment of the population who view these benefits as if they are birthrights?
Should we be a nation that looks to government to provide more and more of what people need or desire OR are we Americans that depend on our personal efforts and family support systems and our own labor and intelligence. THAT is the question. What the current adninistration is hellbent on doing is growing the government to the point that we will not recognize our country that immigrants once declared, that in America your work is your reward and you have the freedom to be anything you want to be.
Instead, Obamanomics = Trickle up poverty.