The Obama plan: massive tax hikes

by **Grim17** Fri Feb 27, 2009 2:16 pm

The Obama plan: massive tax hikes
posted at 9:03 am on February 27, 2009
by Ed Morrissey

Jake Tapper took a look at the fine print in Deadbeatonomics yesterday, and discovered a lot of tax hikes among the Hope and Change. His plan for revitalizing the economy relies on sucking about a trillion dollars out of it over a ten-year period, starting in 2011:

1) On people making more than $250,000.

$338 billion - Bush tax cuts expire
$179 billlion - eliminate itemized deduction
$118 billion - capital gains tax hike
Total: $636 billion/10 years

2) Businesses:

$17 billion - Reinstate Superfund taxes
$24 billion - tax carried-interest as income
$5 billion - codify “economic substance doctrine”
$61 billion - repeal LIFO
$210 billion - international enforcement, reform deferral, other tax reform
$4 billion - information reporting for rental payments
$5.3 billion - excise tax on Gulf of Mexico oil and gas
$3.4 billion - repeal expensing of tangible drilling costs
$62 million - repeal deduction for tertiary injectants
$49 million - repeal passive loss exception for working interests in oil and natural gas properties
$13 billion - repeal manufacturing tax deduction for oil and natural gas companies
$1 billion - increase to 7 years geological and geophysical amortization period for independent producers
$882 million - eliminate advanced earned income tax credit

Total: $353 billion/10 years

Most of this is vaporware. This is a triumph of static tax analysis, which assumes that increased taxes have no effect on the amount of money available for taxation. For instance, the hike from 15% to 20% on capital-gains taxes assumes that people will invest and cash out in the same manner they do at 15%. They won’t. The fact of increasing the tax will discourage investors and encourage them to shift money out before the hike. Not only will the extra revenue vanish, but investment levels will drop, leading to job losses and less opportunity for American businesses.

And what “itemized deduction” will get eliminated? All of them? Some of them?

The business tax hikes are even worse. Obama will increase taxes on existing American oil production starting in 2011. Do we have massive amounts of alternative energy capacity ready to replace the energy production and usage that this will discourage? A growing economy has to have a reliable energy supply. Energy producers get hit on several fronts in this plan, and those costs will either result in lower energy production or increased cost to the consumers.

Again, the expected revenues will far exceed the reality, once the depressive economic effects of these taxes kick in. The spending, unfortunately, will be all too real, which will mean huge, ballooning deficits. It’s the inevitable result of Deadbeatonomics.

Link

by **Grim17** Fri Feb 27, 2009 6:50 pm

by Guest Fri Feb 27, 2009 7:03 pm

Do you make over $250,000 a year grim?

by **Grim17** Fri Feb 27, 2009 7:07 pm

lisan23 wrote:Do you make over $250,000 a year grim?

No, I don't... Not even close.

by Americanadian Sat Feb 28, 2009 12:32 am

It appears that Obama is living up to the name 'Tax & Spend Liberal'.

Although I believe 'Tax cuts and spend' certainly cause problems, which Bush authored.

Rather than raise taxes exorbitantly, a minor increase could be justified and target places to reduce spending.

Cutbacks are what's needed most at this crucial time, not massive tax hikes. This could be the final nail in the coffin. Not only is Wall street and business in general reeling from the economic crisis, now the common minion will be forking out extra money. Once the working man is deprived of his ability to spend money, we'll have a big problem. What is going to stimulate the economy?

It's ironic that Socialist Canada has cut taxes to help out during the economic crisis and Obama is raising taxes.

by Theophilus Sat Feb 28, 2009 12:54 am

Americanadian wrote:It appears that Obama is living up to the name 'Tax & Spend Liberal'.

Although I believe 'Tax cuts and spend' certainly cause problems, which Bush authored.

Rather than raise taxes exorbitantly, a minor increase could be justified and target places to reduce spending.

Cutbacks are what's needed most at this crucial time, not massive tax hikes. This could be the final nail in the coffin. Not only is Wall street and business in general reeling from the economic crisis, now the common minion will be forking out extra money. Once the working man is deprived of his ability to spend money, we'll have a big problem. What is going to stimulate the economy?

It's ironic that Socialist Canada has cut taxes to help out during the economic crisis and Obama is raising taxes.

For a congressman to get reelected it is all about how much money did you bring to the state. It stops being a Democrat republican issue at that point. This is why we have all this pork. So yes I agree on cutting spending. Try convincing your congressman of the same. I don't think it's going to happen.

by **Grim17** Sat Feb 28, 2009 12:59 am

Most economists will tell you, (unless you listen to idiots like Thomas Freedman at the NT Times) that the last thing you want to do during a recession or depression is to raise taxes on anyone. Raising taxes on businesses and upper income earners like he plans to do, is going to cause lay-offs, pay cuts, jobs moving overseas and in some cases, companies going out of business.

Slowly raising taxes during a robust economy is fine, as Clinton did during his administration... But doing it now is only going to make things worse.

by Americanadian Sat Feb 28, 2009 1:10 am

Grim17 wrote:Most economists will tell you, (unless you listen to idiots like Thomas Freedman at the NT Times) that the last thing you want to do during a recession or depression is to raise taxes on anyone. Raising taxes on businesses and upper income earners like he plans to do, is going to cause lay-offs, pay cuts, jobs moving overseas and in some cases, companies going out of business.

Slowly raising taxes during a robust economy is fine, as Clinton did during his administration... But doing it now is only going to make things worse.

JReed posted this in his political quotes thread. It is applicable to this one as well.

"The democracy will cease to exist, when you take away from those who are willing to work, and give to those who would not."
Thomas Jefferson

In this case, exorbitant taxes will strip every day Americans from doing their utmost to stimulate the economy with the only means they have to do so; spending their money.

by **Grim17** Sun Mar 01, 2009 7:09 pm

Americanadian wrote:
Grim17 wrote:Most economists will tell you, (unless you listen to idiots like Thomas Freedman at the NT Times) that the last thing you want to do during a recession or depression is to raise taxes on anyone. Raising taxes on businesses and upper income earners like he plans to do, is going to cause lay-offs, pay cuts, jobs moving overseas and in some cases, companies going out of business.

Slowly raising taxes during a robust economy is fine, as Clinton did during his administration... But doing it now is only going to make things worse.

JReed posted this in his political quotes thread. It is applicable to this one as well.

"The democracy will cease to exist, when you take away from those who are willing to work, and give to those who would not."
Thomas Jefferson

In this case, exorbitant taxes will strip every day Americans from doing their utmost to stimulate the economy with the only means they have to do so; spending their money.

This happens so rarely, that I feel I need to acknowledge it when it does.

We seem to agree on this subject AC... It's nice to be on the same side of an issue every once and a while.

by **JReed** Sun Mar 01, 2009 11:14 pm

I think most reasonable people understand that you can't solve our problems by tax & spend.

We need to get our debt under control. And I mean that as a country, and as individuals. For too long we Americans have been all about credit.

I think it's fair to say that if we were ALL a bit more responsible for our finances we wouldn't be in this mess. Imagine if all Americans only had 1/4 ofthe debt they currently do simply because they were more disciplined on how they spend. I think this mess would have never existed.

Obama's solution appears to be one massive credit card. I just don't see how it can possibly work...and I think it sets a terrible example. He gives a great speech, but I don't see his plan doing anything good for this country.

We need someone in office who will legitimately slash spending and taxes. Slashing spending being the higher priority.

by **Grim17** Sun Mar 01, 2009 11:36 pm

JReed wrote:I think most reasonable people understand that you can't solve our problems by tax & spend.

We need to get our debt under control. And I mean that as a country, and as individuals. For too long we Americans have been all about credit.

I think it's fair to say that if we were ALL a bit more responsible for our finances we wouldn't be in this mess. Imagine if all Americans only had 1/4 ofthe debt they currently do simply because they were more disciplined on how they spend. I think this mess would have never existed.

Obama's solution appears to be one massive credit card. I just don't see how it can possibly work...and I think it sets a terrible example. He gives a great speech, but I don't see his plan doing anything good for this country.

We need someone in office who will legitimately slash spending and taxes. Slashing spending being the higher priority.

I agree... The problem, and the thing that scares me most, is the fact we have a president who ran on a platform of creating costly government programs, and raising taxes on upper incomes and businesses, combined with a senate and congress that is controlled by the democrats, who are famous for government spending and pork projects, that will go along with whatever the president wants to do. There is no balance, and thus far, opposing viewpoints have been totally ignored by the democrats as well as the mainstream media. In fact, the stimulus bill that was just passed, was created in congress 100% by the democrats, who refused to allow any republicans to be involved in it's creation.

This is about as close to a dictatorship as this country has ever seen, and I just hope we survive it.

by Susan aka CV Mon Mar 02, 2009 3:00 am

Grim17 wrote:
JReed wrote:I think most reasonable people understand that you can't solve our problems by tax & spend.

We need to get our debt under control. And I mean that as a country, and as individuals. For too long we Americans have been all about credit.

I think it's fair to say that if we were ALL a bit more responsible for our finances we wouldn't be in this mess. Imagine if all Americans only had 1/4 ofthe debt they currently do simply because they were more disciplined on how they spend. I think this mess would have never existed.

Obama's solution appears to be one massive credit card. I just don't see how it can possibly work...and I think it sets a terrible example. He gives a great speech, but I don't see his plan doing anything good for this country.

We need someone in office who will legitimately slash spending and taxes. Slashing spending being the higher priority.

I agree... The problem, and the thing that scares me most, is the fact we have a president who ran on a platform of creating costly government programs, and raising taxes on upper incomes and businesses, combined with a senate and congress that is controlled by the democrats, who are famous for government spending and pork projects, that will go along with whatever the president wants to do. There is no balance, and thus far, opposing viewpoints have been totally ignored by the democrats as well as the mainstream media. In fact, the stimulus bill that was just passed, was created in congress 100% by the democrats, who refused to allow any republicans to be involved in it's creation.

This is about as close to a dictatorship as this country has ever seen, and I just hope we survive it.

couldn't agree more with both you and jreed, grim.

as you know, obama FAILED to mention during the campaign that all his big plans would be adding trillions to the national debt and would take years and years and years to make a difference. we've also talked about the lack of checks and balances, so congress's approval of whatever bo wants is no surprise either to the few of us who didn't fall under his spell during the election!

no doubt the stimulus package is a joke. but the tax increases are not, and the damage they will cause will be seen immediately. i think a lot of people are in for a huge reality check when they start witnessing the problems obama is about to cause when he increases these taxes.....

damn i'm glad i didn't vote for him!

CV

by Americanadian Sat Mar 07, 2009 7:41 pm

Grim17 wrote:
Americanadian wrote:
Grim17 wrote:Most economists will tell you, (unless you listen to idiots like Thomas Freedman at the NT Times) that the last thing you want to do during a recession or depression is to raise taxes on anyone. Raising taxes on businesses and upper income earners like he plans to do, is going to cause lay-offs, pay cuts, jobs moving overseas and in some cases, companies going out of business.

Slowly raising taxes during a robust economy is fine, as Clinton did during his administration... But doing it now is only going to make things worse.

JReed posted this in his political quotes thread. It is applicable to this one as well.

"The democracy will cease to exist, when you take away from those who are willing to work, and give to those who would not."
Thomas Jefferson

In this case, exorbitant taxes will strip every day Americans from doing their utmost to stimulate the economy with the only means they have to do so; spending their money.

This happens so rarely, that I feel I need to acknowledge it when it does.

We seem to agree on this subject AC... It's nice to be on the same side of an issue every once and a while.

I believe the gun issue is another we agree on as well.

by Americanadian Sat Mar 07, 2009 7:53 pm

JReed wrote:I think most reasonable people understand that you can't solve our problems by tax & spend.

We need to get our debt under control. And I mean that as a country, and as individuals. For too long we Americans have been all about credit.

I think it's fair to say that if we were ALL a bit more responsible for our finances we wouldn't be in this mess. Imagine if all Americans only had 1/4 ofthe debt they currently do simply because they were more disciplined on how they spend. I think this mess would have never existed.

Obama's solution appears to be one massive credit card. I just don't see how it can possibly work...and I think it sets a terrible example. He gives a great speech, but I don't see his plan doing anything good for this country.

We need someone in office who will legitimately slash spending and taxes. Slashing spending being the higher priority.

Credit, if used responsibly, can be a benefit as in working capital. However, most people do not and cannot refrain from spending excessively and impulsively. I learned that lesson in the last decade the hard way. Therefore, credit enslaves those whom cannot exercise self control with their expenditures.

I am an impulsive spender by nature, therefore I choose to abstain from obtaining credit because I would be tempted to buy things I don't necessarily need. I think we've forgotten how to save for the things we want in life. Patience is another aspect of the problem which hasn't been employed by many. We want it all and we want it now! Twisted Evil

We would keep more of our own money if we didn't fall prey to the lure of credit. Self control.

Viva La Vida - Coldplay

I used to rule the world
Seas would rise when I gave the word
Now in the morning I sleep alone
Sweep the streets I used to own

I used to roll the dice
Feel the fear in my enemy's eyes
Listen as the crowd would sing
"Now the old king is dead! Long live the king!"

One minute I held the key
Next the walls were closed on me
And I discovered that my castles stand
Upon pillars of salt and pillars of sand

I hear Jerusalem bells are ringing
Roman Cavalry choirs are singing
Be my mirror, my sword and shield
My missionaries in a foreign field

For some reason I can't explain
Once you go there was never
Never an honest word
And that was when I ruled the world

It was the wicked and wild wind
Blew down the doors to let me in
Shattered windows and the sound of drums
People couldn't believe what I'd become

Revolutionaries wait
For my head on a silver plate
Just a puppet on a lonely string
Oh who would ever want to be king?

I hear Jerusalem bells are ringing
Roman Cavalry choirs are singing
Be my mirror, my sword and shield
My missionaries in a foreign field

For some reason I can't explain
I know Saint Peter won't call my name
Never an honest word
But that was when I ruled the world

I hear Jerusalem bells are ringing
Roman Cavalry choirs are singing
Be my mirror, my sword and shield
My missionaries in a foreign field

For some reason I can't explain
I know Saint Peter won't call my name
Never an honest word
But that was when I ruled the world

by **Peregrine(Endangered)** Sat Mar 07, 2009 8:17 pm

Grim17 wrote:Most economists will tell you, (unless you listen to idiots like Thomas Freedman at the NT Times) that the last thing you want to do during a recession or depression is to raise taxes on anyone. Raising taxes on businesses and upper income earners like he plans to do, is going to cause lay-offs, pay cuts, jobs moving overseas and in some cases, companies going out of business.

Slowly raising taxes during a robust economy is fine, as Clinton did during his administration... But doing it now is only going to make things worse.

I think you are correct...bad time to raise taxes on anyone...he forgets the stock market affects the rich just the same as it does you or me.

by Americanadian Sun Mar 08, 2009 1:59 am

It affects everyone considering the rich will ensure their costs are covered. Higher taxes mean prices will escalate as well. Obama shouldn't be raising taxes on anyone at this time. It's a bad move period.

The Obama plan: massive tax hikes Arial

by **Old Timer** Tue Mar 10, 2009 11:34 am

When there is a lack of genuine leadership, people will accept anyone that steps up to the microphone. That is what happened and that is what the people of this country did when they elected obama. They have put a stock boy in the position of The CEO. They made their bed and now they are going to have to sleep in it. I really don't think that it will be a good nights sleep. To those of you that fell under his spell as to many Germans did with Hitler. You will have no bitch coming. You asked for it and now you are going to get it, and my guess is that you will be the ones screaming the loudest. As for me, I can only hope that I am wrong. But so far with to many of his promises being already or about to be broken, it looks like he is leading us right down the toilet. Best of luck to us all. We're going to need it,

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