Tag Archives: taxes

My Thought on the Debt Crisis & Government Shutdown

I am truly scared for the future of the United States. Wasn’t it just a few months ago that we were having another discussion in Congress related to raising the debt limit? That disaster was averted by allowing the sequestration cuts. What I don’t understand is how this is all happening again. It should simply be a matter of not spending more than you make.

Rather than continuing to raise the debt limit, why don’t we decrease spending or at least hold it at the level of inflation. Congress should be forced to pass a balanced budget each year that does not spend more than it takes in in taxes (exceptions could be made for War and other emergencies). The welfare and entitlement system should be overhauled so that only truly qualified people are allowed to be on it as a temporizing measure. Revenue increasing (code word for increasing taxes) is not the way to go about it.

The United States, I think, is not too far gone that we could still save ourselves if the federal government just stepped out of the way. Lower taxes to encourage productivity. Increase the number of green cards available for the talented foreigners that would still love to come to this country. And, we must do this before China grabs them with talks of their version of what has always been called, ‘the American Dream.’

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What Stimulus?

They call it “stimulus” legislation, but the economic measures racing through Congress would devote tens of billions of dollars to causes that have little to do with jolting the country out of recession.

Yes, there are many billions of dollars in “ready-to-go” job-creating projects in President Barack Obama’s economic stimulus bill. But there are also plenty of items that are just unfinished business for Congress’ old bulls.

Analysis: Stimulus bill that’s not all stimulating

According to Congressional Budget Office estimates, a mere $26 billion of the House stimulus bill’s $355 billion in new spending would actually be spent in the current fiscal year, and just $110 billion would be spent by the end of 2010. This is highly embarrassing given that Congress’s justification for passing this bill so urgently is to help the economy right now, if not sooner.
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Middle Class Would Pay Less Under McCain Tax Plan

A closer look at the Obama and McCain tax plans for the reveals that it is not just the “rich” taxpayers earning more than $200,000 that would face higher rates under Obama than under McCain’s tax proposal.

The reason for this is simple: McCain expands the exemptions families can take under both the regular and alternative minimum tax schedules. Obama offers nothing new to this group. Our analysis shows that for an Adjusted Gross Income (AGI) of $50,000 or more, a household would face a higher rate under Obama’s tax plan than under McCain’s. That is hardly a “rich” household. Adjusted Gross Income is the pre-exemptions and deductions income reported on tax forms, and many middle class households would have AGI of at least $50,000.

Continue reading on The Foundry.

Sacrifice and Big Promises

One of the most interesting questions at last week’s debate was from a woman asking what sacrifices John McCain and Barack Obama would ask of Americans “to get out of the economic morass.”

The questioner alluded to World War II, the hallmark usually cited by people miffed that the war on terror doesn’t involve meatless days. Of course, our troops do not lack for meat and, what with blue bins, every day’s a mandatory scrap-metal drive, so WW II’s hardly a relevant template.

McCain’s answer, then, was encouragingly blunt: “There are some programs we may have to eliminate.”

The federal budget has become a $2.9 trillion buffet with delicacies for everyone — the nonpartisan Tax Foundation last year estimated that 67% of American households are treated to more in government spending than they ever pay in taxes. If you’re talking shared sacrifice, the only realistic starting point is government spending.

Obama, meanwhile, said that maybe you should get a higher-mileage car. Any ex-Hummer dealer could tell you that most people did that without Obama’s help.

Then Obama went on to say this shared sacrifice would entail a tax cut for 95% of us.

Bluntly: No. First, it’s not a tax cut if you’re already paying nothing, net, to the feds, as 40% of households do. It’s a refundable credit, which means Uncle Sam takes money from someone else and gives it to you. The old-fashioned word for this is “welfare.”

More practically, you’re not going to get even that. The nonpartisan U.S. Budget Watch calculates that Obama has proposed $990 billion in new spending for his first term. The equally nonpartisan National Taxpayers Union pegs Obama’s promises at $293 billion a year, three times its estimate for McCain. None of this accounts for the cost of rescuing our economy. So, no, 95% of us won’t get a nicer cut of federal pelf. …

Continue reading on JSOnline, Sacrifice and big promises.

Obama’s Economic Agenda

Presidential candidate Barack Obama’s mantra for change in economic policies amounts to this: a huge increase in redistribution of income at the hands of the federal government. While Obama refers to this as a “net” tax cut, raising taxes on the top 5 percent and lowering taxes or increasing outright benefits for the other 95 percent simply amounts to an indisputably massive increase in redistribution and ultimately very little meaningful change.

To hear Obama and other Democrats describe our current policies, one might think that we do very little to help the poor and disadvantaged. But Americans already transfer more than a trillion dollars a year to low-income households. That’s a lot of money. Before we endorse Obama’s agenda of more of the same, shouldn’t we ask him what benefits a trillion dollars a year have yielded so far? Has that money reduced dependency? Has it solved the problems associated with poverty and inequality? Are more disadvantaged children being raised in stable two-parent families today than 50 years ago?

Since Obama believes that “in America, prosperity has always risen from the bottom up,” he should be genuinely concerned with imposing higher marginal tax rates on non-rich Americans. But economists will be more concerned with the higher rates on that top 5 percent because we know that the “rich” play a crucial role in financing the economy’s investments and new business start-ups and in producing the technological innovations so critical to improving our prosperity. Higher marginal tax rates on the “rich” are certain to reduce the contributions they make to the well being of all Americans.

Increasing marginal tax rates as Obama proposes may in the short run improve the material well-being of lower income Americans (at the expense of higher income Americans), but in the long run it will lead to slower economic growth and lower incomes for most people in the future. Economic research suggests that our current redistributive policies have already reduced the average American’s before-tax income by 25 percent. This is the hidden cost of redistribution that is well documented in economics literature, but rarely acknowledged in media discussions. That cost will become larger in the future if Obama’s economic agenda is put into place.

Continue reading, Obama’s Economic Agenda: This Is Change?

Different Tax Plans, Different Futures

Obama has a bad record when it comes to taxes:


It looks more and more like Joe the Plumber was on to something about taxes, though you wouldn’t know if from most of the polls and media. The Heritage Foundation has the details in our new study: If a President McCain got his way on tax reform, Americans could expect to see jobs, the economy and their own disposable income grow much faster than if a President Obama were to push through his proposals.

As this chart shows, the economy would grow by $320 billion more in 10 years under John McCain’s tax plan than under Barack Obama’s, adjusted for inflation. More than twice as many jobs would be created by the McCain plan — 3.43 million, compared with 1.58 million under the Obama plan…

Continue reading on Cato-at-liberty

2. Transcript of Democratic Debate

MR. GIBSON: And in each instance, when the rate dropped, revenues from the tax increased. The government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down. So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?

SENATOR OBAMA: Well, Charlie, what I’ve said is that I would look at raising the capital gains tax for purposes of fairness. We saw an article today which showed that the top 50 hedge fund managers made $29 billion last year — $29 billion for 50 individuals. And part of what has happened is that those who are able to work the stock market and amass huge fortunes on capital gains are paying a lower tax rate than their secretaries. That’s not fair. [. . . .]

MR. GIBSON: But history shows that when you drop the capital gains tax, the revenues go up.

SENATOR OBAMA: Well, that might happen or it might not. It depends on what’s happening on Wall Street and how business is going.

Marching Towards Socialism

Quote of the week from a liberal caller that I heard on talk radio: “It is the government’s job to create equality through taxation.”

Wow! What a horrible idea. With less incentive to work hard, this equality would drop to the least common denominator and the economy would crumble. Kind of like Obama’s idea of taxing the profitable companies that support this country and distributing the wealth to the people that don’t even pay taxes. This isn’t even a tax cut for them but simply a handout by redistribution.

Here’s John McCain’s take on this in one of his radio addresses:

Joe explained that he works for a small plumbing and heating company. He’s been thinking about maybe taking over the business when his boss retires. Problem is, that would make Joe one of millions of small business owners who face a sudden increase in taxes under my opponent’s tax plan.

That didn’t seem fair to Joe. He wanted to know why Barack Obama plans to raise taxes on folks who are trying to start or grow a business and create jobs for others. And fairness aside, at a time of serious economic crisis, punishing job creators didn’t seem like a real good way to kick-start a recovery.

My opponent’s answer showed that economic recovery isn’t even his top priority. His goal, as Senator Obama put it, is to “spread the wealth around.”

You see, he believes in redistributing wealth, not in policies that help us all make more of it. Joe, in his plainspoken way, said this sounded a lot like socialism. And a lot of Americans are thinking along those same lines. In the best case, “spreading the wealth around” is a familiar idea from the American left. And that kind of class warfare sure doesn’t sound like a “new kind of politics.”

This would also explain some big problems with my opponent’s claim that he will cut income taxes for 95 percent of Americans. You might ask: How do you cut income taxes for 95 percent of Americans, when more than 40 percent pay no income taxes right now? How do you reduce the number zero?

Well, that’s the key to Barack Obama’s whole plan: Since you can’t reduce taxes on those who pay zero, the government will write them all checks called a tax credit. And the Treasury will cover those checks by taxing other people, including a lot of folks just like Joe.

In other words, Barack Obama’s tax plan would convert the IRS into a giant welfare agency, redistributing massive amounts of wealth at the direction of politicians in Washington. I suppose when you’ve voted against lowering taxes 94 times, as Senator Obama has done, a new definition of the term “tax credit” comes in handy.

At least in Europe, the Socialist leaders who so admire my opponent are upfront about their objectives. They use real numbers and honest language. And we should demand equal candor from Senator Obama. Raising taxes on some in order to give checks to others is not a tax cut it’s just another government giveaway.

What’s more, the Obama tax increase would come at the worst possible time for America, and especially for small businesses like the one Joe dreams of owning. Small businesses provide 16 million jobs in America. And a sudden tax hike will kill those jobs at a time when need to be creating more jobs.

Fortunately, America has an alternative to the phony tax cut my opponent started talking about only months ago. The McCain-Palin tax cut is the real thing. Among our other serious tax reforms, we’re going to reduce every income tax bill in America, and double the child deduction for every family. We will cut the capital gains tax. And we will cut business taxes to help create jobs, and keep American businesses in America.

Obama’s Tax Increase

Senator Obama’s proposed “tax cuts for the middle class” are actually marginal rate hikes in disguise.

It’s pretty simple. If you have an adjusted gross income of between $85,000 and $100,000 or so, Obama won’t raise your marginal tax rates. If you’re anywhere else in the income scale, you’re not so lucky.

Although Obama is offering a new series of tax breaks, they undermine rather than improve economic incentives. First, whether or not you get those breaks will depend on your income. In Washington, taking away tax breaks as families work harder to make more money is called a “phase-out.” Economists have a different name for it—we call it a tax. Reducing a person’s tax credit as his income goes up also reduces his incentive to earn more income.

Source: http://www.american.com/archive/2008/august-08-08/the-folly-of-obama2019s-tax-plan

Taxes, According to Glenn Beck

In his article, entitled Arguments against Idiots, Glenn Beck goes on the offensive against “liberal whiners:”

What the liberal whiners say:

1.’The rich don’t pay their fair share’

2.’The working class carries the full load in this country, while the rich just keep getting richer, and paying LESS’

3.’How about those 50 hedge fund managers Barack Obama talks about all the time who made $29 billion, but actually paid less in taxes than their $60,000 a year SECRETARIES!’

4.’I’m sick and tired of all the corporate welfare in this country’

Your winning, logical, reasoned arguments:

1.Really? According to the Tax Foundation, the top 1% of wage-earners in this country pays nearly 40% of the burden (an 11% INCREASE over 1999, when WHO was President? Oh that’s right…Bill Clinton). Not fair? Well, you may be saying, ‘that’s because they have ALL the wealth!’ Wrong again. The top 1% of earners account for just 21% of the total adjusted gross income. Hmm. Come to think of it…you’re RIGHT! That really isn’t fair. They’re paying DOUBLE what they should be. By the way, the top 10% of earners pay 70% of the load. When you get all the way down to the top 50% of earners, they account for 96.4% of the entire tax burden. The next 10% pays 3.6%. And the bottom 40% of wage earners…pay NOTHING. That’s right, nothing. In fact, they pay nothing, and then often get a “refund” (handout) at years end.

To see his other responses, continue reading on glennbeck.com

A Roadmap for America’s Future

Here is the introduction by Paul D. Ryan, a Republican congressman from Wisconsin and a member of the Budget Committee and the Ways and Means Committee, to his legislative plan to secure the fiscal future of the United States:

merica faces a choice between two fiscal and economic futures.

In one, ever-rising levels of government spending overwhelm the Federal budget and the U.S. economy with crushing burdens of debt and higher taxes. It is a future in which America’s best century is the past century.

The second future is one in which the principles that created America’s freedom and prosperity are restored. It is the path set out in my plan, A Roadmap for America’s Future.

Currently, we are on a path of unsustainable Federal spending. The main problem is the looming crisis of entitlement spending. The well-intentioned social insurance strategies of the past century – particularly Social Security, Medicare, and Medicaid – are headed toward financial collapse.

Not only will these programs grow themselves into extinction, they will immensely burden our economy and budget – piling massive amounts of debt on future generations, crippling our ability to compete in the international marketplace, and dramatically reducing Americans’ standards of living.

We can and must set a different course. But the time for talk has passed. We need a plan.

Based on the input of many, I developed A Roadmap for America’s Future to:

1. Ensure universal access to health insurance, fulfill the missions of Medicare, Medicaid, and Social Security, and make these programs permanently solvent.

2. Return Federal spending growth to sustainable levels and lift the debt burden looming over future generations.

3. Promote sustained economic and job growth and put the U.S. in a position to lead – not merely survive – in the international marketplace.

We are going to have to tackle these problems, or they’re going to tackle us. My plan addresses all these issues at once because piecemeal, incremental “fixes” cannot match the magnitude, the urgency, and the interrelated nature of these challenges.

It’s an ambitious proposal. Not everyone will agree with every aspect of it, and that’s fine. But if nothing else, it’s my sincere hope that it will spur Congress to move beyond simply rehashing the problem – to debating and implementing actual solutions for the American people.

It is a real plan, with real proposals, real numbers to back them, and real legislation to implement it.

The details, including an independent analysis by the Congressional Budget Office, is available here: American Roadmap