Posts Tagged ‘stimulus package’

Obama: Taxing Us toward Tyranny

January 7, 2009

I don’t particularly care for Dick Morris’ brand of politics, but if his assessment is accurate, we’re going to need to bundle up with a few strange bedfollows to save our nation from the tyranny that Obama’s stimulus plan implies:

It now looks like half of President-elect Barack Obama’s stimulus package will take the form of “tax cuts” for 95 percent of all Americans. Yet this wouldn’t so much boost the economy as trigger a massive, unhealthy shift in American politics.

Under Obama’s plan, the majority of American voters would pay no federal income taxes, but would get money from the government instead. That is, these “refundable tax credits” are basically welfare checks – and Obama’s plan would leave the most of us collecting, not paying.

A $200 billion giveaway won’t do much to get a $14 trillion economy rolling again. But the plan would leave any future taxpayer revolt no hope of majority support.

Today, the bottom 50 percent of US taxpayers pays a total of $30.6 billion in federal income taxes on a combined income of about $1 trillion. So about 3 percent of all federal income-tax payments come from the poorest half of the country. (The top 1 percent pays 40 percent; the top 25 percent pay 85 percent of the federal income tax.)

Obama’s plan – he’d give all couples a $1,000 refundable tax credit and all single people $500 – would funnel more than $50 billion to the lowest half of the country, thereby completely wiping out their total federal tax liability. In most cases, it would trigger a “refund” welfare check.
In one stroke, this would transform the majority of voters from taxpayers into tax eaters – and leave an increasingly small minority to pay the bill. Whether or not this is good economics, it is very dangerous politics.

Essentially, it would put those who actually pay the taxes that fund our government into much the same situation as landlords in New York City – hopelessly outvoted by their tenants, who use their political clout to limit rents and landlords’ profits.

Since Ronald Reagan, the anti-tax movement has been based on a blue-collar revolt against high taxes; it would lose that constituency under the Obama plan. Taxpayers would be politically helpless and the tax-eating majority would have free reign to impose any levies it wished.

Almost all of the 68 million tax filers in the country’s bottom economic half would get a check from Washington at tax time. Some would be among the 22 million who get money from the Earned Income Tax Credit (EITC). Others would get a $500 check through the (Bush-passed) Child Tax Credit – and all would get funds through the new Obama tax credit.

Welfare would no longer be only for the poor – the majority of the voters would depend on government handouts. This very system is what makes European social democracies so resistant to change.

In 1980, the bottom 50 percent of the nation paid 7 percent of the national tax bill, after refund and credits. It now pays 3 percent; under Obama’s plan, it would pay less than nothing (that is, it would net a profit from the IRS). In 1980, the top 1 percent paid 19 percent of the income-tax burden; now it’s 40 percent. Taxes have become the province only of the rich.

Of course, the shift in tax burden also mirrors the incredible increase in incomes of the wealthy in the last 30 years – the top 1 percent earned only 8 percent of the total national income in 1980; now it earns 22 percent. And the poorest half has seen its share of national income fall from 17 percent in 1980 to only 12.5 percent today.

So it is both fair and sensible to give the poor a tax break and to draw the bulk of federal revenues from the rich. But to exempt the bottom half – a majority of the voters – from paying any taxes and to award them refund checks instead would dangerously alter the fundamental balance of national politics. For the economically well off, it could effectively become taxation without representation – which, as the founders of our nation warned, leads to tyranny.

from Dick Morris.com

Some stimulus.

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Are Pelosi and Obama on the same page?

November 8, 2008

Speaking from behind a new seal of “The Office of the President Elect” (what the heck is that?), BHO proclaimed:

The No. 1 priority, Obama said, is to get Congress to approve an economic stimulus plan that would extend jobless benefits, send food aid to the poor, dispatch Medicaid funds to states and spend tens of billions of dollars on public works projects. If the plan is not approved this month, in a special session of Congress, Obama said that “it will be the first thing I get done as president of the United States.”

Hold on.  Is this the same two-step stimulus package being promoted by Nancy Pelosi?

The big question is what kind of a tax cut is it?  Is it an actual broad cut in income tax rates?  Or is it an Obama-style “tax cut” that’s really a tax hike on Americans already paying the most taxes and a check in the mail for those already paying nothing?

House Speaker Nancy Pelosi says she wants to hurry up and enact a stimulus package of between $60 billion and $100 billion, and then establish a permanent, direct tax cut early next year to help the flailing U.S. economy.

“Let’s see if we can’t do something, working together now, that gives us a two month jump,” she told The Wall Street Journal on Thursday.

The tax cut would not include a capital-gains cut and Pelosi doesn’t want a tax rebate like before. Instead, she favors an adjustment to tax withholding tables that would put more money in workers’ pockets immediately.

Pelosi’s aides later said any decision would be linked to both payroll and incomes taxes.

I don’t think the federal government can afford to be sending out any more checks, and certainly the economic impact of the last round of stimulus checks was short-lived.  At best.

The tax cuts interest me though.  Could tax rate cuts be in the works?  And if so, how do Democrats plan on cutting tax rates without *gasp* giving tax cuts for the rich?  The people who pay the highest rates and the most taxes?

The only way you can give the people Democrats define as not being rich a tax cut is by eliminating their tax burden altogether or sending them a check in the mail.  Which isn’t so much a tax cut as welfare.

This middle class American says “no, thanks.”  We’ve had enough stimulus …. The checks we received earlier this year didn’t work.  Let the first bailout package work itself out and give Wall Street an opportunity to heal itself.

Meanwhile … it appears that we may have the beginnings of a power struggle between the Office of the President Elect and the Office of the Speaker of the House Elect!!!