The 'Chattering Class' is Tired, Broke, and Pissed

Here it comes. Obama is asking Congress to increase taxes on the very people who spur economic and job growth. He’s proposing to increase the top marginal rate to 39.6% from the current 35%. To add insult to injury, he also wants to reduce the amount of eligible tax deductions for the same payers who would be affected by the tax increase. This is nothing more than tax and spend Socialism and you should be outraged. Margaret Thatcher said, "The problem with socialism is that eventually you run out of other people's money."

First, consider this. If you or your family earn more than $92,000 per year, (and many do, but would scoff at being called affluent especially in the Northeast), then congratulations. You belong to a select group of taxpayers in the top 20% of all wage earners. You also have the blessed distinction of paying 80% of all taxes collected. The top 20% pay 80% of ALL the tax. Nice, huh? Moreover, the top 50% wage earners pay a staggering 97% of all taxes. This means that the bottom 50% of all tax filers pay only 3% of all taxes collected. Put another way, 5 of every 10 people pay only $3 out of every $100 in tax collected. Sounds like a deal to me. For them.

To make matters worse, the Tax foundation verified that 32% of all tax returns filed were from people who paid no federal income tax at all. How is this possible? This is possible because of tax exemptions and earned income tax credits which reduce some filer's tax liability to zero, so 32 % pay nothing. And now Obama wants the people who do all the heavy lifting to lift even more. The fact is the Dems essentially want to REDUCE taxes on those who already pay a disproportionately small amount and provide more handouts to those who already pay nothing or next to nothing in an effort and build support, and yes, dependency in the Democratic voting base, many of whom are here illegally. And this is being done at the expense of responsible tax payers and business owners who have been and continue to be the source of the vast majority of tax revenue and are the very people who make it possible to grow the economy through private sector investment and job creation.

Obama plans on taking more money from the heavy lifters by not extending the Bush tax cuts enacted in 2000. I’m not a Bush apologist. He abandoned core conservative principles and all fiscal responsibility early on, was a failure in many ways, and is largely responsible for Dems having so much power today. However, the Dems have repeatedly slammed the Bush Administration saying that his tax cuts were only for the corporations and the wealthy. This is simply not true. According to IRS income statistics, in 2000 before the Bush tax cuts, the top 10% wage earners paid 67% of all tax. Last year this number was close to 71%. So during a period of time when Bush was supposedly taking care of his buddies in big oil, the highest earners actually paid more tax than before. How could this be possible if the tax cuts were for the privileged few? I never saw this announced on MSNBC or Meet the Press. What Obama and the liberal Dems seem to miss is that when you lower taxes, people tend to put more effort into earning income since less of it is taxable. When you raise taxes, people tend to put less effort into earning income since more of it is taxable, and more effort into finding ways to avoid paying tax. And the latter is not good for anyone. Try explaining that to a liberal.

It’s clear how to stimulate the economy, it’s been proven. The Dems want to ignore that even Kennedy in the ‘60s achieved this by using methods unheard of by some in his party. He cut marginal tax rates, capital gains, and inheritance taxes, and by 1968 that increased our revenues by more than 60 percent.

In 1980, the last year of the Carter Administration, inflation rose to 13.5%. The top individual tax payer rate was 70%, unemployment was 7.4%, and the federal government grew while enacting huge new spending programs. We’re heading down the same path today. During that period, the US economy was the worst it has ever been since the Great Depression.

When Reagan took office, he wiped out price controls that were preventing oil companies from profitably drilling for and refining oil, drilling rigs started running and oil began to flow again. Even though there was a recession in 1982 brought on by the Fed increasing interest rates and reducing the money supply to combat the sky-high inflation in Carter’s final year in office, by the end of 1982 inflation was less than 4% and well under control. By 1986, the top marginal tax rate was down to 28% and oil was down to $20 per barrel. The economy was prospering and booming. The tax cuts combined with other initiatives created the largest sustained economic growth in our history. Our economy grew by more than a third in size and there was a $15 trillion increase in American wealth during the Reagan years. Capitalism and prosperity were forever joined.

Memo to President Obama and Congressional Democrats: We do not approve of Socialism.

We approve of the following:

• Cut individual and corporate income taxes
• Cut government spending
• Cut useless and expensive programs
• Avoid protectionist legislation
• Maintain low interest rates
• Control the money supply
• Incent businesses to expand, jobs and wealth will follow
• Crack down on employers of illegal aliens
• Protect and defend our borders
• Arrest and deport those here illegally
• Encourage people to have self-respect and be self-sufficient, instead of encouraging dependency on the government

We’ve all talked with those from prior generations who scoffed at the notion of accepting a government handout or welfare check. If welfare was used, it was temporary in nature until work could be found. There was something called pride and self-respect. Today, welfare has become a way of life. Self-respect has become self-disgrace. Pride has been overpowered by apathy. Our liberal Democratic leadership continues to promote government dependency because it serves a clear purpose: it secures a constituent base. They are metaphorical pimps feeding and controlling needy prostitutes. They are the Lords to their voting serfs.

Do liberal Dems know better, or do they have another agenda? Do Republicans have the backbone to stand on principle and fight? Is a third party needed? While the unanimous House Republican vote against the spending bill was promising, I suspect that we could take 535 average everyday citizens, replace the entire Senate and House, and do a better job than our elected 'leaders.'

But then, they have not set the bar very high. Most have forgotten why they have been elected. When Chuck Schumer made a comment about the American people not caring, it showed just how far out of touch with reality he is, and is also an indictment of those who continue to vote him and others like him into office. Maybe this will change. I sincerely hope that Congress finds the collective common sense and courage to realize that this is not about party politics or special interests; it’s not about lobbying which is nothing more than legalized bribery. They need to stop the greed and arrogance; and for a moment stop being a Democrat or Republican and start thinking like and being an American. Our children deserve it.

by Michael DiLuca
February 26, 2009

See also http://mikediluca.blogspot.com/

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Posted February 27, 2009 06:14 PM
Read more on Budget, Taxation and Fiscal Policy ~ Political Thought