Yesterday, the President gave a speech outlining his plan to reduce the Federal Deficit. In a move that was as surprising as bad jokes from Fozzie Bear, it involved raising taxes on the very people who own businesses and create jobs. I've outlined many times why this is a bad idea, namely the number of sole proprietorships whose business revenue is all considered personal income. It's a $1.5 Trillion tax hike, and it's bad for America, especially in this economy.
The plan, overall, is billed as $3 Trillion in deficit reduction. It claims $1 in cuts for every $1 in tax increases. Of course, it does involve liberal economic math, aka raises taxes now, cut spending someday in the future, "over ten years," but it's not actually required of future Congresses to do that. It's a bad bill, but who's surprised at this point, from Obama. It's the same liberal policies that have failed in the past and will fail again.
Also, the $1.5 Trillion in predicted revenue won't automatically mean $1.5 Trillion in new revenue. You see, unlike the expectations of liberals everywhere, when you raise taxes $1.5 Trillion; those who are now paying more taxes don't just absorb the increases while including employing the same number of people, and spending precisely the same amount of money. Of course, this never happens. Every action has an effect. Business owners invest their money with a profit margin that makes their financial risk worth the potential loss. By raising taxes, you're cutting into that profit margin, and that business owner is going to do something to recuperate that loss, likely by reducing their workforce and output, which means less income tax revenue from their employees and less corporate tax revenue from that business because of the reduced output.
Obama also repeated his request for the "wealthiest and most fortunate among us to pay their fair share." It's preposterous, of course, as I've displayed countless times, the wealthiest 10% pay 50% of the tax burden in this country. It's baloney from Obama. His real premise is "they can afford it so it's ok to confiscate their money." It's a crock, and its class warfare meant to divide Americans. Now, there are some people who will buy into that line from Obama, because they honestly believe that if the government takes money from other people their lives will be better. Except they don't ever become wealthier, the only entity that becomes wealthier is government.
Furthermore, we cannot trust government to spend that money wisely. Nothing in the modern history of the United States government lends us to believe government will be fiscally responsible with this money. The fact is the government spends too much. Raising revenue won't cause them to stop spending 140% of the money they have. History suggests they will spend 140% of the new revenues just like they're spending 140% of the current revenue. The real problem is that every cent of tax revenue the government takes in is spent on Medicare, Medicaid, and Social Security. These three entitlements need reforming and now. Obama is ignoring this reality in favor of more class warfare that will not solve the problem.
We need two things to fix this deficit problem: Less spending and more revenue, but not in the form of raised tax rates, but if the form of new taxpayers. To cut spending we need to start at the source of the problem. We need to make serious reforms to Medicare, Medicaid, and Social Security so that they don't take up every cent of revenue in our budget. Remember, it takes up 2/3 of the revenue, while all the other things that Obama and the liberals blame for the deficit, like the wars, the military in general, and anything else they can find, those items make up only 1/3 of the budget, along with every department of the government that's not Medicare, Medicaid, and Social Security. We have a spending problem, my friends.
The tax rates are already too high. With the top Federal rate at 35% currently, plus paying as much as 15% state taxes and as 8% sales taxes, putting that individuals rates at well over 50% of their income. Plus if a person has the audacity to get married, they pay a higher rate, plus if they die, after a lifetime of government taxing their money, they get taxed again, because they didn't pay enough in life. No, our tax rates are too high already. Obama wants to tax more, but if we cut those rates we'd see more jobs. It's happened time and again. We'd see more money in the pockets of business owners and in the pockets of consumers. That means consumers having more money to spend. When they spend that money, then businesses will find they can't keep up with the customers. Oh, and since they have more revenue, they'll be able to hire more people to keep up with the increased business. It just makes sense, doesn't it?
Of course, this doesn't fit into Obama's playbook. Obama is a rigid ideologue who only cares about advancing his leftist agenda. Actually, I don't think he even wants this bill to pass. Just like his Jobs Bill, I don't think the President expects this bill to pass at all. I believe he knows it's Dead on Arrival in the House of Representatives. I think he's presenting it fully expecting the GOP to block it, so he can say "I've tried to do things to solve the problem, but the Republicans keep obstructing me." As I said last week, they're stopping the President from doing damage, so while they're stopping him from "getting things done" they should be obstructed. Stopping a bank robbery is stopping the robber from getting something done too.
It's not going to work though. Nothing in the last three years has lead us to believe that the American people want this policy. In 2009, two states that Obama won in 2008 elected Republican governors, in 2010, Obama and the Democrats were "thumped" and two weeks ago Democrats lost Anthony Weiner's old seat in Queens, NY for the first time in decades. No matter how many cooked polls that the Drive-By Media puts out that claim that voters blame the GOP for the country's current problems, the voters aren't supporting that claim with their votes.
Obama's plan is bad, as usual, and it's nothing new. It's DOA in the House of Representatives and it ought to be, because it will cost jobs and, by the way, will ultimately not raise the same amount of revenue as predicted because less money in people's pockets do have consequences. It's a bad plan, and it won't fly. Thankfully, the American people have stopped buying what Obama is selling. Obama is already a lame duck President. I believe he is landslideable in 2012, and bad plans like this are the reason why.
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