Recently in Taxation Category

The new stimulus plan being proposed by the soon-to-be Obama administration is said to contain "tax cuts" for businesses and individuals. No details as yet have been issued on the business "tax cuts."

But as far as individuals are concerned, these are not tax cuts, but Obama spreading the wealth around as he inadvertently blurted out to Joe the Plumber he would do when elected.

Every person earning less than some number will get a payment whether he's a taxpayer or not and the amount of the payment will have no relation to how much the taxpayers getting payments pay in taxes.

While it is suggested that payees may "mentally" treat the payments as offsetting some of their payroll or Social Security taxes they pay, in fact those taxes will not change. Nor will the income tax. In the somewhat hysterical bailout environment we are passing through, it's borrow now to make payments and do the tax thing later. And when it's time to pay off the debt, the second part of the "spread the wealth" plan will come into play, with the so-called "rich" paying for 2009 welfare payments to the people Obama favors.

If these were truly to be tax cuts, the government need only declare an income tax holiday for some period or, better yet, permanently lower income tax rates proportionately, leaving people to make their own spending decisions about their own money, not money they get in a check from the government.

Sorry to say, even before the Obama folks are in office they are engaging in Doublespeak.

The fiscal crisis will be on everyone's minds for quite awhile.

The world financial network hangs together because of confidence.

What shattered that confidence was the bursting of the housing bubble and the defaults beginning with the subprime loans encouraged, indeed, required by Democrats in Congress led by the likes of Massachusetts' own Congressman Barney Frank. Frank and other Democrats also twisted arms at Fannie Mae and Freddie Mac to buy the risky loans and package them up and send them around the world with the implicit U.S. guaranty behind them. Frank, the top Democrat in the House of Representatives on financial matters, kept telling concerned Republicans that Fannie and Freddie were in great condition and that no reform or new regulation was needed. Frank convinced fellow Democrats in the Senate this was the case and together they blocked reform legislation in 2003, 2004, 2005 and 2006.

What percent of Massachusetts -- and U.S. -- residents know that Democratic policies and actions cost them 30-50% of their life savings?

"Who blew that hole in your IRA?" Barney Frank. But he wasn't alone.

Of course, the voluble Frank is on the airwaves regularly blaming everyone else but himself and his colleagues, The Democrats in Congress worked hard to get their constituents who couldn't afford homes to get "subprime" (that is, very risky) mortgage loans. They got the loans all right, they got their homes, but when the housing bubble burst their mortgage defaults caused them agony and in many cases the loss of their homes.

The collapse of the subprime market triggered the financial panic that has cost the world trillions and frozen the credit system, leading to job as well as financial losses.
Democrats are now once again hard at work, this time figuring out how much of taxpayers' money will be poured into the black hole they created in the hope they will avert the Depression that their good intentions and bad judgment has hurtling towards us

After all, as Frank says, there are plenty of rich people out there to tax.

The whole sorry tale of Democratic responsibility is still being written, but a good start would be here and here.

REDISTRIBUTION OF WEALTH FOR TEENAGERS


Father- Daughter Talk…

A young woman was about to finish her first year of college. Like so many others her age, she considered herself to be a very liberal Democrat, and was very much in favor of 'the redistribution of wealth concept touted by the Obama campaign. She was deeply ashamed that her father was a rather staunch Republican, a feeling she openly expressed. She felt that her father had for years harbored an evil, selfish desire to keep what he thought should be his.

One day she was challenging her father on his opposition to higher taxes on the rich and the addition of more government welfare programs. He responded by asking how she was doing in school. Taken aback, she answered rather haughtily that she had a 4.0 GPA, and let him know that it was tough to maintain, insisting that she was taking a very difficult course load and was constantly studying, which left her no time to go out and party like other people she knew.

Her father listened and then asked, 'How is your friend Audrey doing?'
She replied, 'Audrey is barely getting by. All she takes are easy classes, she never studies, and she barely has a 2.0 GPA. She is so popular and lots of times she doesn't even show up for classes because she's too hung over.'

Her wise father asked his daughter, 'Why don't you go to the Dean's office and ask him to deduct a 1.0 off your GPA and give it to your friend who only has a 2.0. That way you will both have a 3.0 GPA and certainly that would be a fair and equal distribution of GPA.'
The daughter, visibly shocked by her father's suggestion, angrily fired back, 'That wouldn't be fair! I have worked really hard for my grades! I've invested a lot of time, and a lot of hard work! Audrey has done next to nothing toward her degree. She played while I worked my tail off!'

The father slowly smiled, winked and said gently, 'Welcome to the Republican Party!"

Does the Obama tax plan work? Will it just be those rich making $250,000 or more who will bear the burden? And will those rich only see their marginal tax rate go to 39% from 35%?

The answers to these three questions are No, No and No. And, as for the new Obama marginal rate, it will be 93%, not 39%.

See why.

It's a plan to destroy a productive economy. Taking from the productive to spread the wealth to those who don't pay taxes sounds great, very European really, but it's a recipe for economic disaster.

As has been pointed out, taxes on the top 10% of households are higher in the U.S. than in any other developed nation, including socialist exemplar Sweden. And Obama intends to make them higher yet (even higher than he says, as the linked article shows.)

The following is a copy of an ad placed by the Chatham Republican Town Committee, Walter Bilowz, Chairman, in this coming Thursday's Cape Cod Chronicle:

DOES YOUR RETIREMENT MONEY BELONG TO YOU OR THE GOVERNMENT? PREDATORY POLITICS -- or ROBIN HOOD REDUX

This campaign has brought up two major issues, the redistribution of income and the redistribution of wealth.

Joe the Plumber said to Obama "your new tax plan is going to tax me more, isn't it?"
Obama replied "I think that when you spread the wealth around, it's good for everybody."

With this, Obama declared his intention to redistribute the tax dollars which you paid on the income which you earned. Currently, if the Earned Income Tax Credit (E I TC) exceeds a taxpayer's tax liability, the IRS refunds the difference. That is, the government takes your tax money and gives some of it to someone who qualifies for the EITC. This is a redistribution of the tax money which you paid on the income which you earned. Obama would expand this with his tax plan to further distribute more of your tax money in order to "spread the wealth around". Obama calls this a tax cut for 95% of workers! He does not stress that approximately 40% of these workers pay no taxes and thus would be receiving a cash benefit (an entitlement).

However, Obama's intent to redistribute does not end with redistribution of your income. He is on record as favoring redistribution of your wealth, which includes your retirement funds. On a Chicago program, Odyssey, station WBEZ, in 2001, he stated that redistribution of wealth was a …”basic issue of political and economic justice in the society.” He indicated that redistribution of wealth could be accomplished by legislation.

The US News and World Report published a story on October 23, 2008, when they uncovered consideration of potential legislation to eliminate 401(k) plans (retirement plans) and take control of the retirement plan savings of Americans. This was in the Subcommittee on Income Security and Family Support which is chaired by Representative James McDermott, Democrat of Washington. Under the plan, your retirement money would be transferred into a government account invested in government bonds and paying around 3%. In addition there would be a loss of preferential tax treatment and a mandatory contribution imposed on workers. There is approximately $4.5 trillion invested in 401(k) plans in the US. This would be the largest loss of wealth and seizure of private assets in world history. It would far exceed the amounts recently seized by the government of Argentina in their nationalization of pension funds. The leftist government wanted to use the funds for their agenda.

If we elect Obama, a Democrat, as president, and a Democratic Congress, what is it that would stop a radical assault on the income that you earn, and on the retirement wealth which you accumulate? It happened in Argentina!

It's shocking that Obama has been able to hide his true aims until just a few days before the election. Joe the Plumber inadvertently exposed the truth with his question to Obama about higher taxes on small businesses: Obama blurted out that he wants to "spread the wealth."

Now a more shocking disclosure comes in the form of a 2001 radio interview in Chicago (found by an individual, not the media) in which Obama expresses his dismay with the U.S. Constitution's limits on governmental power and his desire for judges who will "interpret" away the "essential constraints" incorporated into the U.S. Constitution by the founders so the government can redistribute the income and savings of some people to others. The judges he wants are those with "the empathy to understand what it’s like to be poor, or African-American, or gay, or disabled, or old." How about respect for the facts, the law and the Constitution? Obama wants more than just socialism, he wants totalitarian socialism, an all-powerful government to take from those with means to give to those with needs. That kind of unrestrained power the Constitution is designed to prevent.

As is often the case the brilliant lawyer John Hinderaker of Power Line puts the cards on the table so they can be clearly read.

It is extraordinary that only now, a week before Election Day, have Barack Obama's beliefs and policies come into focus. After months of "hope," "change" and "I'm not George Bush," the truth has finally tumbled out: Barack Obama wants to redistribute America's wealth, raise taxes on those who create jobs, create vast new handout programs styled as "tax relief," and appoint judges who will radically redefine the relationship between American citizens and their government.

This last point is especially remarkable. The Founders feared arbitrary government power, and drafted a Constitution and amendments intended to protect your property from expropriation. Obama would stand this constitutional framework on its head by appointing judges who believe that the Founders were wrong, and their "error" can be corrected by court decisions to the effect that the federal government has a constitutional duty to carry out a radical redistribution of wealth.

Hinderaker quotes some points McCain made today that show the sharp contrasts between his policies and Obama's, such as this one:

Senator Obama is running to be Redistributionist in Chief. I'm running to be Commander in Chief. Senator Obama is running to spread the wealth. I'm running to create more wealth. Senator Obama is running to punish the successful. I'm running to make everyone successful.

Read all of John's post and more McCain quotes by clicking on the link above or here.

As for the disasters that would flow from Obama' judicial appointments, click here to read Professor Thomas Sowell's critique.

Obama's tax plan, he says, will give 95% of Americans an income tax cut. That's odd; 44% of Americans don't pay any income tax at all. What will happen is that the 44% will get a check from the government paid for by those who do pay taxes -- you. In other words, Obama is using his tax plan for welfare. He just wants to, in his words, "spread the wealth around." At the heart of Obama's "change for America" is socialism and increased reliance on the government for more handouts.

Since Obama believes, along with anti-white America Jeremiah Wright and self-described communist Willam Ayers, that America oppresses its non-white low income minorities, it is only just and fair that those who have earned enough to pay taxes hand some of their money over to those who haven't.

Power Line has the video of Obama's retort to a plumber who has figured out he's going to pay more under Obama's "tax cut" plan. Power Line also excerpts the Wall Street Journal's explanation of how Obama is undoing welfare reform as a first step to his new socialist society to replace the free enterprise system that has created the world's most successful economy.

Obama's "tax" plan would in effect undo the greatest accomplishment of the Republican Congress, welfare reform. It would reinstate the federal welfare system that we thought was gone for good with the repeal of AFDC. Not only a welfare system: a welfare system that would rapidly grow from more than a half trillion to over a trillion dollars a year.
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