One might expect the “green” energy initiatives, the defense cuts, and the massive increase in transportation spending where Obama’s union allies will get a windfall. But it is how the president wants to raise taxes that the class warfare theme of his campaign for re-election and, what can only be described as his hatred for the successful, the entrepreneur, the savvy investor, and the small business person, becomes apparent.
Larry Kudlow sums up a few of the tax increases in Obama’s budget:
The capital-gains tax goes from 15 percent to 24 percent (including Obamacare). The dividends tax goes from 15 percent to nearly 40 percent, and that’s not including the double tax on corporate profits embodied in dividends and capital gains. The Bush tax cuts for top earners are repealed. There’s the 30 percent Buffett-rule minimum tax on millionaires. The carried-interest tax for private equity, hedge funds, and other investment partnerships goes from 15 to 39.6 percent. The estate tax jumps to 45 percent. Oil and gas companies get hit. And there’s probably more stuff in there I haven’t read yet. (Jimmy P. lays it out nicely.) Paul Ryan’s press release calls it $1.9 trillion tax hike, with $47 trillion in government spending over the next decade and the fourth straight year of trillion-dollar deficits.
Oil and gas companies will lose subsidies, which is the same thing as a tax increase and will make energy more expensive. And if you are going to die and want to pass on your estate or small business relatively intact, it would be better to go sooner rather than later. After an estate is taxed every year for purposes of income (and taxed when the money is first earned), Obama doesn’t believe that is enough. Before it is passed on to your children or spouse, it must be taxed again with nearly half of your life’s work going to the government.
Thus is “fairness” served in Obama’s eyes.
Perhaps the most egregious bit of deceitful and fraudulent budgeting is in the “savings” Obama is claiming from ending the wars in Iraq and Afghanistan. The administration puts that figure at a nonsensical $850 billion. Even his allies are embarrassed to defend this bit of tripe. It’s as if they pulled the number out of thin air, believing no one would notice. Since it is a fairy tale number, there is little doubt Obama’s deficit projections are also in the realm of fantasy.
Writing at the AEI blog, James Pethokoukis surveys the wreckage:
All in all, Obama has proposed some $1.6 trillion in new taxes over ten years, taking tax revenue as a share of GDP to 20.1 percent in 2022 vs. a historical average of 18 percent. And despite all those new taxes, Obama’s plan would still add $6.7 trillion in new debt and make no progress in lowering the nation’s total debt levels as a share of output. The debt-to-GDP ratio is predicted to be 74.2 percent this year and 76.5 percent in 2022.
At the same time, federal spending would never fall below 22 percent of GDP. Indeed, Obama — if he serves two terms — would be the first U.S. president in history to spend 22.0 percent or more of GDP for eight straight years (and then beyond). And keep in mind that these debt and spending numbers claim about $850 billion in savings from unwinding the wars in Iraq and Afghanistan, spending about a quarter of those phony “savings” on highway funding.
Pethokoukis also points out the cynically dishonest projections for economic growth upon which much of the budget is based: 3.4% growth in 2015, 4.1% in 2016, 4.1% inn 2017, and 3.9% in 2018. Pethokoukis notes that the “U.S. economy has only seen a run like that three times in the past four decades. And the Obama Boom is supposed to happen amid rising tax rates, interest rates, and debt? Good luck, Mr. President.”
No, James. Good luck to us. We’re going to need it if we’re going to survive this assault on capitalism from a president who has presided over the worst economy in nearly 80 years.
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