Donnerstag, März 11, 2010

The Obama Tax Increases...

The WSJ has put a figure on the Obama Tax Increases.

$3 Trillion.

Tax increases.

Sure, it's over the next 10 years. But given 300mn US citizens, that works out to be ... $10 000 per person. In additional taxes over a ten year period. Say $1 000/year.

Doesn't sound like much put that way? Well the thing is, not all 300mn Americans work. There are, roughly speaking, 140mn who are employed: that changes the additional taxation to $21 000 per employee, $2 100 per year, roughly $180/month.

And consider this: of that $3 trillion, $1 trillion is to come from the 3.2mn folks who earn more than $250 000/year: that's additional taxes of $31 250/year or $2 600/month. When you consider their income, they can "afford" it, but you have to also understand the implications of increasing taxation here: we are increasingly heading into an economy and society where only the richest actually pay any taxes, and at some point the goose stops laying golden eggs when they realize that there isn't any incentive to do so.

The problem is, is that isn't the taxation: it's the additional taxation. It's what the government has decided that it needs more than you do.

What this Obama budget does is to increase the national debt more than it was increased in the history of the United States before President Obama was elected, and yes I do mean cumulatively. To repeat: the national debt under President Obama will increase more than it has under all previous Presidents, from Washington to the younger Bush.

This means - and it really is only a matter of time at this point - that the rating agencies will, perforce, downgrade the credit risk for the US government, because the US government - under President Obama - is behaving in a very, very risky manner.

To quote from the link:

Without real reforms, the federal government will undertake the greatest intergenerational transfer of debt in American history. Younger generations, not old enough to vote when most of these policies were enacted, will be relegated to staggering tax increases, deep government debt, and slower economic growth in order to pay for their parents' and grandparents' retirement benefits. The President's budget not only does nothing to prevent this fundamentally immoral situation--it makes it worse.

Of course the Obama Administration is doing this: it represents the most narcissistic, me-oriented generation in American history, one that wants, wants, wants without concern about how it can be done. The exact same principles that led to the sub-prime crisis and the insanity of health care reform - something for nothing, and who cares about the economics - is leading the Obama Administration to this as well.

I'll repeat this: I know I sound like a broken record, but we simply need to demand a higher quality of work from our government.

Instead, we have an increasingly irresponsible government that will do lasting damage - it's not permanent, but it will take decades to correct - to the US economy. The Democrats are proving what has been said of them for years: they can't be trusted with government because they are incompetent when it comes to money and economics.

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