Friday, October 17, 2008

Taxes: Election 2008 & Beyond

It is widely known that you never raise taxes when the economy is in crisis. That will cause a recession to last for years, or even go into a depression. Economists also agree that raising taxes caused the great depression to last as long as it did. It also caused the long period of stagflation during the ‘70s. More and more economists from a wide political spectrum are starting to realize that Senator Barack Obama’s plan would raise taxes on the very people that will get this economy going. The very people Obama thinks he is helping will make less and lose jobs. They will be worse off. The unemployment rate will skyrocket. There would be no incentive for the economy to grow, for jobs to be created. Economists also say that Obama’s tax and spending plan as it is now could cost 1 to 2 trillion dollars and his higher taxes come far short of paying for it all. We are all in danger of oppressive tax hikes.

Balancing a budget is done on paper. It is a forecast, just like determining if you have a surplus or a deficit during the year. When politicians see a deficit, their first reaction is to raise taxes. The economy slows so there is less revenue from taxes, lower taxes and the economy grows, there is more tax revenue. There is no formula for putting these results into the budget or applying it to the deficit. If a budget falls short and they decide to raise taxes to get $750,000 to balance the budget, they don’t realize they won’t get $750,000. The economy will slow, so there will be less income to base the tax increase on. So the government will get less than $750,000. So the next fiscal year there will still be a deficit, probably worse than the year before. If they had lowered taxes, there might even be a surplus. That is if they didn’t spend too much

The left has done a good job at misleading America into believing that business is separate from workers. They work together. If you hurt one you hurt the other. If there is no business, who is going to hire the worker? Jobs can’t be created by over-taxing and hurting business and those that create jobs. Entrepreneurs and achievers create jobs and do the investments that are in 401ks. You can’t make the poor rich by making the rich poor. Both groups will be worse off. Those that have their taxes increased are hit twice. First, they make less when their taxes are raised. Second, they make less when the economy slows. Socialism and redistribution schemes just push everyone down to the “lower-class”. We would all be equal at zero or close to zero, except the ruling elite and the “super rich”, empowering them to oppress the “lower-class”.

Listen to “Joe the Plumber” the man Obama talked with. Obama’s plan does sound like socialism. It is redistribution of wealth and class warfare. We are all in this together. It appears that we are being taught to resent and even hate those that work hard to achieve what they have; rather we should see it as an example that "I too can succeed". We cannot drag some down to pull others up. We will end up dragging everyone down. It will ensure the "middle-class" and below have lower incomes, lose jobs and push many into poverty. They will lose the opportunities they had to better themselves. Why should the government decide what to do with your hard earned money? You worked for it, you deserve it. Does the American dream end at $250,000? Where’s the incentive for the plumber to realize his dream to buy and then grow his business and create more jobs, when he knows he is going to be punished for it. The more you succeed the more you are a target. The 33% tax rate will go up to 36% and it begins to hit this year at incomes of $164,550 for an individual and $200,300 for joint filers. If you're an individual with taxable income of $164,550, you will pay more taxes.

Many small businesses file taxes as individuals and 70% of the larger more productive ones, those that have more than 10 employees, make over $200,000. The tax credits that Obama has for some businesses that file in the $200,000 bracket are not enough to offset their tax increase. In one recent year small businesses created 100% of the new jobs while big business was cutting hundreds of thousands of jobs. A lot of the larger small businesses will cut workers pay, cut jobs or even go out of business under Obama’s plan. “Middle-class” workers work for someone. They will be hurt, not helped by Obama’s plan. Small business hiring will be a critical part of bringing our economy out of the crisis we are in today.

The other part of Obama’s tax plan, raising capital gains and dividends taxes will cause investors to invest overseas instead of in America. At a time when many have lost money in the stock market now is not the time to raise taxes and make them lose even more. This will also encourage people to take their money out of the stock market causing it to crash even more. Lower taxes will encourage investment in the stock market creating more tax revenue. Higher taxes will keep businesses from raising capital to grow and create jobs. If you raise corporate tax on business they will pass the cost on to the consumer. If they feel that is not possible, they may cut jobs or even move jobs out of the US to other countries. You are actually hurting the individual. This will also put more of the tax burden on those that make over $250,000.

When someone says the Bush tax cuts were only on the rich, they are misleading you. About 10 million people in the lower tax brackets don’t pay income taxes now. Even “middle-class” families received a tax cut. In 2010 these tax cuts will expire. Will that mean even higher taxes for everyone? The latest IRS statistics confirm that the “rich” already carry more of the tax burden than ever before.

Obama is cleverly misleading us when he says that 95% of Americans will get a tax cut. Obama’s plan is a complicated tax credit mess. Around 40% of Americans do not pay income taxes, so they would get what could be classified as "welfare". Our tax code is a mess because politicians like to use it as a way to get votes.

The $3000 tax credit to employers for up to two years for each worker they hire is a slap in the face. When the economy is slow and businesses have to cut back to stay afloat, they don’t have the money and there isn’t enough business to hire. $3000 is not enough to offset say a $40,000 a year salary. They would go out of business.

Raising the cap on the social security payroll tax would be one of the largest tax increases ever. Millions of “middle-class” workers would receive a direct tax increase, up to $2000 or $3000. The hardest hit would be small business owners and the self-employed. The self-employed would be hit twice as hard because they have to pay both sides of the payroll tax. The wealthy would receive more benefits as well. It would destroy economic growth and job creation. This could be one of the worse things that could ever be done, especially during a recession.

One more thing that would devastate small business and take away workers’ and employers’ freedom of choice is the Free Choice Employee Act. It would take away secret-ballot elections that protect workers from union and employer harassment and intimidation. It would allow unions to be invoked by a card-check majority, doing away with an election. It could force contract arbitration forcing employers into contracts that could cause them to go out of business. This legislation would allow corruption to enter the system by taking away the checks and balances that are built in. Democrats in congress are set to impose this on America. This is just more legislation from congress that makes it easier for corruption to enter our society.

At a time when our economy is expected to enter a recession that could last a while, when businesses are already laying off workers, Obama’s tax plan would take even more from them and slow the economy causing businesses to lay off even more workers and even causing many to close. How does it help the “middle-class” and below by causing them to make less, lose benefits and jobs? What good is a tax cut if you lose your job and there are no jobs to replace it with? His tax plans would cause a perpetual recession or depression. We need to do what history proves works every time that is lowering taxes to create economic growth and job creation.

Now Senator Obama, Senator Biden and the media are insulting and trying to discredit Joe Wurzelbacher, a “middle-class” voter. The very people they claim they want to help. Why? Is it because he asked a question that caused Obama to answer in a way that exposed his true view, “I think when you spread the wealth around, it's good for everybody,” a view many Americans don’t agree with? Is it because this one “middle-class” American managed to expose Barack Obama in a way the McCain campaign has not been able to? Is it because this “middle-class” American resonates with millions of Americans? How can they expect to win over the average American by insulting them? Is this how everyday Americans will be treated under an Obama administration?

[1] The Election Choice: Taxes
[2] The Election Choice: Unions
[3] The Obama and McCain Tax Plans: How Do They Compare?
[4] Statistics About Business Size From the U.S. Census Bureau
[5] Obama Tax Cut 'Refunds' Those Who Don't Pay
[6] Raising the Social Security Payroll Tax Cap Does Not Fix Social Security
[7] Ten Myths About the Bush Tax Cuts
[8] How the Employee Free Choice Act Takes Away Workers' Rights

Tax Increases Mean Less Revenue: Your Common Sense Guide
Obama's Plan For A Debt-Ridden Future
The Progressive Tax Rate Myth
Obama's '$4 Billion for Exxon' Myth
Socking It To Small Business
An Obamanomics Preview
Obama's Plan for a Second-Class Economy
Obama's 95% Illusion
'Senator Government'
Obama Talks Nonsense on Tax Cuts
The Founding Fathers On Redistribution

Obama Redistribution of Wealth Video

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