Saturday, August 1, 2009

Peeking behind the curtain

Guess what? It is not the great and powerful OZ! You know the news must be appalling when even the voice of Liberalism, The New York Times, is admitting in print that the tax the wealthy scheme of President Obama and his minions will fail. Analysts from both sides of the debate concur that "you can only go to the same well so many times". General consensus is that they will have to look elsewhere to pay the bill coming due if the Nationalized Health care system makes its way out of Congress and in to law. This is what the NY Times had to say today.

WASHINGTON — Behind Democrats’ struggle to pay the $1 trillion 10-year cost of President Obama's promise to overhaul the health care system is their collision with another of his well-known pledges: that 95 percent of Americans “will not see their taxes increase by a single dime” during his term. (note the nuance here....during his term. Should Obama be sent from the White House to the lecture circuit at the end of this term there will be the proverbial leaking bag of excrement left to the presumptive Republican replacement. Convenient that either a) he does not raise taxes until his second term at which point he is done at the end of eight years anyway and doesn't have to care about political ramifications or b) as the minority party they will be able to engage in finger pointing)

This will not be the last time that the president runs into a conflict between his audacious agenda and his pay-as-you-go guarantee, when only 5 percent of taxpayers are being asked to chip in. Critics from conservative to liberal warn that Mr. Obama has tied his and Congress’s hands on a range of issues, including tax reform and the need to reduce deficits topping $1 trillion a year. The House measure calls for surtaxes ranging from 1 percent on annual income of $280,000 to 5.4 percent on income of $1 million and more. The millionaires’ surtax would push the top tax rate to 45 percent, the highest since the 1986 tax code overhaul lowered all rates in return for jettisoning a raft of tax breaks for businesses and individuals. But the effective top rate would be higher still, counting the 2.9 percent Medicare payroll tax and state and local income taxes. In the highest-tax states of Oregon, Hawaii, New Jersey, New York and California, it would be 57 percent, according to the conservative Heritage Foundation. (Just in case you missed that number, the government is planning to tax "top income earners", a distinction that will most assuredly be applied on a sliding scale, at a total combined rate of 57%. More than half of the target groups income will be taken by the government. Please have no doubt that that $250,000 level will gradually slide down to 175,00 or below. The math is simple if you figure it out.)
I urge you dear friends to avoid being lulled in to the stupor of government generosity. The $4500 dollars you get toward a new car will pale in comparison to their take on the back end. Keep your old clunker and put your money in the mattress. At least when you figure out the emperor has no clothes you will still be able to put gas in to it.

The full NY Times story is here.

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