Mr. Obama’s definition of fair and balanced
Our President is a man dedicated to shared sacrifice. He tells us any budget deal must be fair and balanced. Further more, he is a man dedicated to ensuring that billionaires earning over $200,000.00 a year pay their fair share, a fair share being what whatever he thinks it should be at any given moment. Therefore, it is with some surprise the compromise bill of which he is so proud, that now awaits his signature − it has to wait because he took off for Hawaii again after the vote − has a 10 to 1 ratio of tax increases to spending cuts. That, my friends, is Mr. Obama’s idea of fair and balanced.
First of all, when thinking about taxing the rich to help reduce the deficit, you have to rid your mind of any idea that Mr. Obama’s passion to tax the rich has the slightest thing to do with reducing the deficit. Top earners, or the rich if you prefer, will have to be taxed at more than 100 percent to have any serious impact on the deficit. No, fair and balanced in this case is simply a phrase meant to hide Mr. Obama’s desire to redistribute the accumulated wealth of the country.
Some of the key points in the budget deal:
Raises taxes on incomes over $400,000 for individuals and $450,000 for households
Limits deductions for incomes over $250,000
Increases the death tax rate for estates over $5 million
Extends long-term unemployment benefits for one year
Postpones sequestration’s automatic spending cuts by two months.
One hidden aspect of the bill is that the bipartisan deal will raise taxes on the vast majority of American workers. According to the Heritage Foundation, “The payroll tax holiday has ended. The Wall street Journal calculates that the ‘typical U.S. family earning over $50,000 a year’ will lose “an annual income boost of $1,000.” In additions, most analysts report that the new taxes will have a hard impact on small businesses. Now, if you are unused to the ways of Washington, you might say to yourself, “the bill is not perfect but at least we have a start on reducing the deficit.” You, of course, would be wrong.
The Congressional Budget Office estimated that the bill actually contains $330.3 billion in new spending over the next decade (Emphasis mine). The bill, according to the CBO, contains about $25.1 billion in new cuts, but those are swamped by the new spending on extended unemployment benefits for the long-term jobless and other new refundable tax credits that President Obama insisted on.
But, why would we be surprised? After all, Mr. Obama and Mr. Reid have more money to spend now and I’m sure they are grateful to all of you who will be now paying an amount they believe is closer to your “fair share.”
The CBO also warned that “some of the cuts Congress is counting are from programs on which CBO never expected the money to be spent anyway − such as cuts to the Consumer Operated and Oriented Plan, which was part of Mr. Obama’s health care law.”
All told, the CBO calculates the bill increases the deficit nearly $4 trillion over the next decade. Some deficit reduction.
If you are interested in job creation, the news is not good. Small business is the job growth engine in this country and the overall tax increase this year is substantial. Forget the new listed top rat of 39.6 percent, the phase out of deductions will take the rate to a bit over 41 percent. According to the Wall Street Journal, “Add the ObamaCare surtaxes on investment income (3.8%) and Medicare (0.9%), as well as the current Medicare tax of 1.45% (employee share), and the real top marginal tax rate on a dollar of investment income from a bank savings or money-market account will be about 46%.” The Journal, also calculates that state taxes can take the total tax bite to a bit over 50% in many places.
Democrats are quick to contend that none of this matters to investment. Yet, when they want to promote a favored industry − think windmills and solar panels − they are quick to reduce taxes that affect that industry.
What is so disturbing about all this is that Congress and Mr. Obama aren’t even through wrecking havoc with our economy. The new Congress will face all the real-world consequences of the current budget deal and, heaven forbid, they will face the sequestration problem that was not solved, only postponed for two months.
Fair and balanced in Mr. Obama’s world is remarkable. Essentially, the budget compromise he offered was, “Give me all the tax increases I want, I’ll promise to think about cutting spending sometime in the future, and I promise not to laugh at you in public.” If nothing else, this is a new definition of fair and balanced.
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