Thursday, February 11, 2010

Obama Tips His Hand On Tax Increases

President Obama said on Wednesday that he's now agnostic about raising taxes on households making under 250k a year to help cut budget deficits. This is an obvious walk back on his campaign promise that no household making under a quarter million dollars a year will have their taxes raised. He is saying a presidential budget commission needs to look at all options for deficit reduction...including tax increases. We all know what presidential commission are designed to do. They're designed to take the political fallout away from the politicians who cannot, and will not make the tough decisions to bring down deficits and get spending under control. It's so easy to put the onus on a commission to avoid blame for breaking a campaign promise. I don't think the American people are going to buy this new tactic that always seems to pop up whenever tough decisions need to be made.

First of all raising taxes in the economic climate we are in right now, is not only foolish, it's disastrous. Even the liberal economists say tax increases in a recession is counter productive, although many of those same economists say the recession is over. Technically it may be, but the American people struggling with continued layoffs and under employment aren't seeing it that way. The smart direction would be to extend the Bush tax cuts for at least another two years, even though the administration has stated they will expire as planned in 2011. They've backed themselves into a corner on this with their non stop demagoguery about tax cuts for the wealthiest Americans. They can't very will continue those cuts, when they have so poisoned the landscape with class warfare, and their attempt to vilify wealth creation.

They want to make jobs their newly inspired priority, but with the president walking back on tax promises, and the expiration of the Bush tax cuts coming soon, what small business is going to take the chance of new hiring? Apparently the new Jobs bill making it's way through the senate, is proposing that all new hires this year will be exempt from payroll taxes until the start of 2011. Small business owners are not as stupid as this administration thinks. First of all with a huge tax increase coming on many of them shortly, with the expiration of the Bush tax cuts, some might be tempted to game the system and make a few new hires this year, but when the payroll tax is reinstated next year, along with the expiration of Bush's cuts, they are going to turn around and lay off again. The utter stupidity of this administration and this congress is beyond belief. 

What the private sector wants and needs, to expand their businesses and make new hires is a consistent tax policy, without unknowns like a continued debate on a health care plan that will cost trillions, a new energy tax that will suck jobs out of the economy, and gimmicks like tax incentives that make gaming the system tempting but bring no real relief  to job creators. It's time for this administration to stop their tinkering and back off. If they want to create jobs for the private sector, instead of an exponential increase in government jobs, they should reduce capital gains taxes permanently, continue the Bush tax cuts and maybe even increase them. Long term rate reductions is the only sure way of guaranteeing long term growth. This was proven by John Kennedy, Ronald Reagan, and somewhat by George W. Bush, who all proved rate reductions actually increased revenues to the federal government. Then start a conversation on health care that will reduce costs by doing the simple things like tort reform, and other small tweeks, instead of this constant talk of a comprehensive overhaul. Drop the cap and trade legislation, and start offshore drilling and began building nuclear power plants as well as new oil refineries. Wait for the entrepreneurs to make wind and solar productive and cost efficient before you destroy the existing energy production for our country.

Their talk of increasing taxes on both the middle class and the rich, and saving their unwise monstrosity of a health care bill,  promises of new energy taxes this year, and obscene deficits way into the future, is pushing this economy to a possible double dip recession and a continued high unemployment rate. The administration's lack of knowledge about what makes the private sector tick is appalling. They all seem to want to govern in theory, without any real practical and proven experience.  I for one am starting to believe that their goal is to destroy the once greatest economy on earth, because it's even harder to believe anyone can be as ignorant about what makes an economy tick, as they seem to be.
Read: Biden Talks About my other blog...Con-Men 4 Palin

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