February 14, 2011

The Socialist States of America and the Redistribution of Wealth

The majority of Americans are dependent on the federal government for their health care, education, income or retirement—at the same time the number of taxpayers paying for these benefits is rapidly shrinking. How can any free nation survive when a majority of its citizens, now dependent on government services, no longer have the incentive to restrain the growth of government? As we all know, over the last 50 years, American attitudes have shifted from cherishing self-sufficiency and personal responsibility to craving cradle-to-grave security 'guaranteed' by government. The result is that increasing numbers of Americans are dependent on government for their income, careers, health care, education, and other essentials. Government benefits—once concentrated on 'the needy'—now extend into middle- and upper-middle-class households, even as more and more Americans see their income tax liabilities decrease. Today, the majority of Americans can vote themselves more generous government benefits at little or no cost to themselves. As a result, most have little fiscal incentive to restrain the continued growth of Big Government and the entitlements it dangles before them. - Jim DeMint, The Coming Crisis, May 8, 2001

A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship. - Justice Litle,
Is America’s Economic Recovery on the Whole Based on a Rotten Sham?, Daily Markets, April 20, 2010

If one understands that socialism is not a share-the-wealth programme, but is in reality a method to consolidate and control the wealth, then the seeming paradox of super-rich men promoting socialism becomes no paradox at all. Instead, it becomes logical, even the perfect tool of power-seeking megalomaniacs. Communism or, more accurately, socialism is not a movement of the downtrodden masses, but of the economic elite. - Gary Allen, None Dare Call It Conspiracy, Concord Press, 1971

Obama Budget Resurrects Rejected Tax Increases

February 14, 2011

Associated Press – President Barack Obama's budget proposal resurrects a series of tax increases on certain corporations and the wealthy that were largely ignored by Congress when Democrats controlled both chambers. Republicans, who now control the House, are signaling they will be even less receptive.

The plan unveiled Monday includes tax increases for oil, gas and coal producers, investment managers and U.S.-based multinational corporations. The plan would allow Bush-era tax cuts to expire at the end of 2012 for individuals making more than $200,000 and married couples making more than $250,000. Wealthy taxpayers would have their itemized deductions limited, including deductions for mortgage interest, charitable contributions and state and local taxes.
"What we've done here is make a down payment, but there's going to be more work that needs to be done, and it's going to require Democrats and Republicans coming together to make it happen," Obama said.
Obama's proposal would extend tax credits for college expenses and expand them for child care. A more generous Earned Income Tax Credit for families with three or more children would be made permanent.

The plan would enhance and make permanent a popular business tax credit for research and development, and would provide tax breaks for investing in manufacturing and for making commercial buildings more energy efficient.

In all, the budget proposal would impose about $730 billion in new taxes on businesses and wealthy individuals over the next decade, while cutting about $400 billion in taxes on middle-income families, the working poor and other businesses, for a net tax increase of about $330 billion.

Those numbers, however, don't include additional tax revenue from letting Bush era tax cuts for the wealthy expire at the end of 2012. Letting those tax cuts expire would generate an additional $709 billion over the next decade, according to the budget proposal.

Many of the tax increases were in the president's previous budget proposals, offered when Obama could expect a more friendly reception from Congress. Lawmakers from both political parties, however, have been wary of limiting the ability of high earners to deduct charitable contributions out of concern it will hurt non-profit organizations.

A group of Senate Democrats has come out in favor of raising taxes on oil and gas companies, but Republicans, who generally oppose such tax increases, have the votes to block them in the Senate.

House Majority Leader Eric Cantor, R-Va., called Obama's proposal a missed opportunity to address the nation's fiscal problems.
"We need a government that finally does what every other American has to do in their households and their businesses, and that's to live within our means," Cantor said in a statement. "Instead, President Obama's budget doubles down on the bad habits of the past four years by calling for more taxes, spending and borrowing of money that we simply do not have."
Sen. Orrin Hatch of Utah, the top Republican on the Senate Finance Committee, said Republicans will oppose the tax increases in Obama's budget proposal.
"Keeping pace with its liberal tax-and-spend agenda, the Obama administration hits almost every sector of our economy with a tax hike — energy taxes, taxes on hiring, higher income taxes," Hatch said. "That's not how we get our country moving forward."
Obama has called for reforming individual income taxes and corporate taxes, saying he wants to eliminate special interest tax breaks and use the additional revenue to lower overall tax rates. Obama's budget proposal, however, breaks little new ground on the issue.
"Successful comprehensive tax reform is a long process, often taking several years," Obama says in his budget message. "But even though it is a daunting task, we cannot afford to shirk from the work."
In December, Congress extended through 2012 a series of tax cuts enacted under former President George W. Bush. Obama's proposed new budget calls for letting the tax cuts expire for the wealthy at the end of 2012, while making them permanent for individuals making less than $200,000 and couples making less than $250,000.

Republicans want to make all the tax cuts permanent, setting the stage for a showdown that could play out in the middle of the 2012 presidential election.

No comments:

Post a Comment