Starting on January 1, 2011, President Obama's economic recovery policy will begin the implementation of comprehensive, across the board, tax rate increases for every major federal tax. The full breathtaking scope of those tax increases, and how they will harm every family in America, is discussed in my latest work, President Obama's Tax Piracy, published as part of Encounter's Broadside series. That series now includes 17 publications by such outstanding authors as Steve Moore on economic policy, John Bolton on national defense and American sovereignty, Betsy McCaughey on Obamacare, Michael Ledeen on Obama's betrayal of Israel, Michael Mukasey on terrorism, Roy Spencer on "global warming," and John Fund on Obama's election fraud, all in the tradition of Thomas Paine's Common Sense pamphlets.
Among the bonehead increases that beckon to shove the economy back into recession is a nearly 20% increase in the top two income tax rates, counting the phase-out of deductions and exemptions. The top capital gains tax rate is scheduled to soar by nearly 60%, counting the application of Obamacare's new 3.8% tax on investment income. The tax rate on dividends is scheduled to nearly triple, from 15% to 43.4%, counting the new Obamacare tax as well. The Obamacare legislation also increased the Medicare HI payroll tax rate by 62% for the nation's employers and investors. On our current course, the death tax will rise from the grave next year with a 55% top rate.
At least that was the plan. But the Democrat Congress left town without ever making good on candidate Obama's pledge to the American people in 2008 to avoid any tax increase on those making less than $250,000 a year, by extending all of the Bush tax cuts for everyone below that income level. That means under current law federal income taxes will now increase next year for virtually every American. The bottom income tax rate of 10% will soar by 50% to 15%, and every other income tax rate will rise by a similar amount. The child tax credit will be slashed by 50% from $1,000 per child to $500 per child. The marriage penalty will also rise from the grave to tax more heavily those who are married rather than those who are just living together.
A family of four earning $50,000 per year will pay more than $2,100 in higher taxes. A single mom earning $36,000 per year will pay over $1,100 more in taxes. Married senior citizens earning $40,000 per year will pay more than $1,400 in higher taxes.
If you have been listening to President Obama's rhetoric, you would be thinking how could failing to extend the Bush tax cuts result in all these tax increases on everybody, since Bush supposedly cut taxes only for the rich. That is why you should not be listening to President Obama's misleading, manipulative, deceptive rhetoric.
Baghdad Bob Economics
In case you have forgotten Baghdad Bob, he was the Saddam Hussein propaganda minister who called a press conference just before American forces entered Baghdad in 1991 to announce that those forces had been massacred in the desert by Saddam's military machine. With Saddam gone, Baghdad Bob now has a new gig. He is in charge of economic and tax policy propaganda for the Democrat party.
You can see the results of his work on national television all of the time. Joy Reid, Keith Boykin, and Christian Weller show up to argue that cutting tax rates for employers and investors causes recessions and economic calamity, such as the financial crisis. Indeed, President Obama is saying the same thing all the time with his rhetoric about "the failed policies of the past" that "got us into this mess."
That's not even Keynesian economics. Rather than John Maynard Keynes, or even Karl Marx, that economic "logic" follows more in the tradition of Jim Jones, and the Jonestown school of economic policy. Joy Reid adds to this body of work her "argument" that increasing real savings and investment for retirement would only cause another bubble in the markets. Reid was voted Netroots Blogger of the Year, which shows how much deep trouble our country is in as long the people identifying themselves as Progressives are anywhere near the levers of government power.
I explain in my Broadside publication how President Obama has consistently followed exactly the opposite of every plank of Reaganomics. As a consequence, we can rightly expect that America will now suffer exactly the opposite results, unless those economic policies are quickly overturned by new Congressional majorities.
In 1983, President Reagan's third year, his tax rate cuts became fully effective, and real GDP zoomed upward over the first 4 quarters of recovery by 7.7%. That recovery flowered into a generation-long, 25-year economic boom, interrupted only by two short, shallow recessions, following President Bush's budget deal increasing tax rates in 1990, and the 9/11 terror attack in 2001.
Art Laffer and Steve Moore have rightly called this Reagan boom "the greatest period of wealth creation in the history of the planet." Indeed, more wealth was created in America during this 25 year boom, from 1983 to 2007, than in all the prior 200 years of American history, from George Washington to Jimmy Carter, combined. That is why Steve Forbes has rightly called it an "economic Golden Age."
The mirror image opposite of this economic performance would be the natural, logical result of following the mirror image opposite of Reagan's economic program, including the counterproductive incentive effects of Obama's comprehensive federal tax rate increases, the costs and burdens of Obama's reregulation hitting next year, and the continued drain of private sector resources due to President Obama's supposedly stimulative spending increases and deficits. Laffer explains:
[W]hen the U.S. economy comes to 2011, the train's going to come off the tracks"?. The tax boundary that will occur on January 1, 2011 tells me that GDP growth in 2010 will be some 6% to 8% higher than GDP growth in 2011. A year on year decline from trend of some 6% to 8% in GDP growth would represent a larger collapse than occurred in 2008 and early 2009.
We see signs of that already even in this year's economy, which, again just the opposite of Reagan's performance, should be the peak economic year in President Obama's reign of error. Economic growth is in a tailspin, falling from 5% in the fourth quarter of 2009, to 3.7% in the first quarter this year, to 1.6% in the second quarter. Unemployment is rising again, with the economy continuing to lose jobs every month. The stock market has been long stalled, mired 30% below its record highs over 14000 in the Dow. This weak economy couldn't be a worse time to raise Federal tax rates across the board. With President Obama's current economic policies, the probability of a renewed, double-dip recession is over 100%.
Letter to the Editor
Peter Ferrara is director of entitlement and budget policy at the Institute for Policy Innovation, a policy advisor to the Heartland Institute, a senior fellow at the Social Security Institute, and general counsel of the American Civil Rights Union. He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under the first President Bush. He is a graduate of Harvard College and Harvard Law School.
Thanks, Mr. Ferarra, for this cold slap of reality. It truly is amazing that we have a president whose main concern is punishing those who actually pay his salary and keep the economy going. If our country can survive the next two years of this presidency, it will be due to Divine Intervention. The Republicans can only do so much. Let's hope the election is a rout that can overturn a presidential veto. One can dream. How do we survive an anti-American president?
It would take 67 votes to override a veto in the Senate. Democrats would need to vote against Obama in order to do this. But if Obama continues to make himself unpopular, this is within the realm of possibility.
No, Shamus, it isn't within the realm of possibility. Just imagine the deals that would have to be cut with the Democrats to secure that 67th vote. When the chips are down politicians sitting on the fence demand exorbitant concessions. We've seen this over and over again.
Sure, it's low probability, but not impossible.
As Samuel Johnson noted, there's nothing like the prospect of a hanging to focus the mind. If we experience more economic oppression issuing forth from Washington, the public may become even more enraged. Unlike Obama, most politicians actually want to keep their jobs.
I think the operative word in your quote is "hanging". Until we actually start using the procedure (past due in my mind) I tend to believe that those in Washington will continue to behave in exactly the same insane ways that they have in the past. We are in a helluva mess! If the American people don't get really smart/tuned in, really quickly, then the show's over.
Shamus, as much as I would like to agree with your hopeful thought, it just will never happen. The current crop of politicians called democrats are ideology driven and could not care in the least about what is good for the nation. They base their existence on what they consider "fair" not what is actually true. It does not matter if less taxes come in or if the nation plunges deeper into this depression we are living through. It only matters that the "rich" are soaked for everything they can take. They are jealousy driven. If your neighblr has one item you can't afford, the neighbor must be punished. Very Soviet Union of them.
The only hope at this time is for the informed electorate to remove EVERY democrat from office. They are marxist in ideology and a grave danger to our survival.
Remember when ObaMao was campaigning in '08 when he was presented evidence that tax cuts lead to greater tax revenue, he clearly said that it didn't matter, it was fairness he wanted. Fairness being "redistribution" of an earners money to a non-producer. Yet he was elected. Unless this nation wakes up, we are doomed.
The strategy for combating the President and his zombie hoard is actually quite simple - make him a "veto" machine.
The Republicans can move their agenda and educate the population by sending small easy to understand bills to the President. Make him veto good, common sense, legislation every week and he will become the most reviled man in America. Since he is unstable this will also be hilarious to watch. For instance, it may be better for a variety of reasons to dissect Obamacare in front of the public by repealing it one miserable ill-conceived, unconstitutional provision at a time. Simply repealing it en masse will be covered by the media as mere partisan tit-for-tat. It may also not be possible. If we win, great. If he vetos a bill, we still win in the public mind if the legislation is popular.
Give us up or down votes on everything. The individual mandate, "death boards", inheritance taxes, etc., etc., etc. Never let up. Put him and the Socialists on the "voting" ropes. The next legislative session doesn't have to be entirely gridlock. Republicans can do a lot of good and provide endless educational entertainment for the next two years.
I really like this idea. Keep each bill very short and simple, the antithesis of what the dems have been doing with their 'comprehensive' bills that no one can possibly have read or understand. A veto machine indeed!
Great idea but we have to hold the Republicans feet to the fire. I don't think it's going to take much more to make Obama the most reviled man in America.
Most reviled by 50%, most loved by 33%, still in the middle or don't care, 17%. No matter how bad a Dem President is, he can always manage to get 40-42% of the vote. This is the moron percentage in our country and it has been at this level for about 40 years. If we go into a 1930's style depression in the next 2 years, Obam (or Hillary Clinton) will lose but I bet heor she still gets 40%.
From the desk of President B. Hussein Obama:
Dear Ms. Deborah D.,
Once again I find Myself maligned by the readers of this despicable magazine. Once the fairness doctrine, net neutrality and the people's airwaves are fully implemented, I shall no longer be forced to tolerate such recriminations. In the meantime, however, I will deign to reply to your blasphemous questions. Please try to keep up as best you can with your feeble mind. I assure you, the pittance you contribute to my salary is quite small. I am well-provided for by means other than the pitiful paycheck I receive for my unappreciated public service as President for Life. In point of fact, my rather "non-traditional" compensation package is quite generous, well beyond anything your pathetic efforts could provide. I have a contractual guarantee for these benefits in perpetuity, negotiated on my behalf by my attorney, Mr. D. Mephistopheles, whom my good friend and mentor the Rev. J. Wright was kind enough to introduce me to. Furthermore, how dare you accuse Me of being "anti-American"? Have I not spent years toiling away in public service, as a law professor, community organizer, and elected official? Just because your idea of "Amerikkka" does not match my Divine Wisdom does not make me "anti-America". If anything, it is America which is anti-Obama, and thus it is America which must change its ways, not me. The sooner you bitter clingers in the hinterlands realize this, the better it will be for you. As to this matter of "Divine Intervention": Well of course I, your President for Life, will continue to intervene in your affairs. Quite frankly I find it baffling that at one moment you deride My patriotism, then in the next you request My intervention. Perhaps you should seek psychiatric help in this matter. Or you could simply continue to pray to Me, whichever works better for you. The Republicans? Oh, that's a laugher. My friendly attorney D. Mephistopheles has assured me that large numbers of their leadership have compensation packages quite similar to my own which he negotiated on their behalf. How do you survive? Obey. Obey. Obey. You need to get used to the idea. My good friend and adviser, one H. Chavez, has shown me a clear path to continuing My Leadership in perpetuity, to the great blessing of this benighted nation. I will bring the light. Trust and Obey Me, and perhaps I will be merciful in spite of your previous unfaithfulness.
Your President for Life,
B. Hussein Obama
Hahahaha, Booger! Thanks for the chuckle...good humor always has an element of truth to it. That's the scary part!
And, Mr. President -- please quit deluding yourself. You are not The One I've Been Waiting For! That is truly above your paygrade.
Hey, Hussein-boy... that whizzing sound past your ear was the clue you haven't got going RIGHT over your head.
If need be, we can have Booger 'splain some more.
Bite me, Barry.
The catastrophic results outlined by Mr. Ferrara are exactly the results that Obowmao intends. Don't be fooled into believing that these are "mistakes". Obowmao intends to bring the United States to its knees. The coming of the next depression is only one plank of his plan to do so.
So Obama is actually trying to destroy the economy?
I've often wondered about this, as it's hard to imagine that anyone could actually be so stupid as to try his policies.
If Obama's real goal is to put the country in the ditch, then he's been quite effective. But is he doing this on his own hook, or is he working for some other group (like Muslims or Communists)?
Just read "Rules for Radicals" and "The Communist Manifesto". ObaMao's actions are straight out of these instruction manuals.
He desires to collapse the economy so he can fast-track his father's dream of communism in the US.
This is transparent and only requires a little fact checking to see it.
All of Obamo's background points to him not liking this Country. They could not be so stupid to believe their soultion would work. So it must be they are doing this on purpose. If we can make a hugh change in November, perhaps the remaining Dems will be able to see Nov. 2012 from their house and overturn Obama's veto. If not we will have to go all out in 2012.
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