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Obama Pays For 2nd Stimulus With Tax Hikes

From CNN’s Money.Com:

Tax the rich: How Obama will pay for his stimulus package

By Jeanne Sahadi, September 12, 2011

NEW YORK (CNNMoney) — President Obama proposed Monday to pay for his $447 billion stimulus package largely by taxing the rich more.

The one more attempt by Obama to repeal the Bush tax extensions for ‘the rich,’ which he signed on to for two years. So we see how valuable his word is.

And, lest we forget, the rich are now anyone making more than $200,000 a year. Which includes most of the small business owners in the nation. The same small business owners who do 70% of all of the hiring in the country.

Obama’s largest proposed pay-for — which the White House estimates would raise roughly $400 billion over 10 years — would limit itemized deductions and certain other exemptions for individuals with adjusted gross incomes of $200,000 or more ($250,000 and up for married couples)…

Obama’s proposal would cap itemized deductions at 28%. That would mean for every $100 in deductions the rich claim in 2013, they would be able to reduce their tax bill by only $28. That would be less than the $36 or $39.60 they would get if they are in the top two tax brackets.

Realize that we are talking about limiting the tax deductions for mortgage interest, charitable contributions, state taxes and even, we believe, retirement savings. Yes, slap an even higher tax on those items, and just watch the economy take off – right through the floor.

Relative to other federal tax filers, high-income households benefit disproportionately from itemized deductions — including those for mortgage interest and charitable contributions.

Could that be because ‘the rich’ actually buy houses and make charitable deductions, whereas ‘the poor’ don’t quite so much. Could it also be because almost one half of all Americans don’t pay any income taxes, anyway?

Obama’s plan is similar to one he offered in each of his three budgets. But the proposal has gone nowhere in Congress

In other words, Obama has been trying to get these tax hikes any way he can over the last three years. Lest we forget, he also brought up these same exact tax increases during the deficit and debt ceiling debates, back in August. In fact, Obama trotted out these same tax hikes way back in early 2009, as a way to pay for Obama-Care.

Mr. Obama has got a tax monkey on his back.

Obama also wants to repeal various oil subsidies for an estimated savings of $40 billion. And he would impose a less-generous depreciation rule for the purchase of corporate jets. That measure would raise an estimated $3 billion

That will show those evil oil companies and corporations. What the hell are they doing in our country, anyway?

Besides, nothing stimulates a weak economy like higher energy prices.

This article was posted by Steve on Tuesday, September 13th, 2011. Comments are currently closed.

8 Responses to “Obama Pays For 2nd Stimulus With Tax Hikes”

  1. mr_bill says:

    Obama: “I’m not going to let the 49% of people who pay no taxes be burdened by the 51% who aren’t paying their fair share.”

  2. untrainable says:

    I actually heard someone say that this “jobs bill” doesn’t have any tax increases in it. How could any of you crazy republicans vote against this bill?
    No skippy. There are no taxes in THIS bill. The new taxes come in another bill which is supposed to PAY for this bill. Wait for that argument from the wingnut talking heads. “There are no tax increases in this jobs bill!” followed quickly by fingers going in their ears and loud humming of the Russian national anthem.

    What I don’t understand is how Oblamer thinks he is going to get away with any of this. He must have heard while he was on vacation “working” on his jobs bill, everyone I mean everyone predicting and decrying exactly what he was going to do and he did it anyway. I mean sure, if Wasserman-Schultz in your entire audience, as long as you can get through the crusty mayonnaise layer, Oblamer could say, “I eat dead babies for breakfast” and Deb would begin to espouse the benefits of a high-fiber, high-toddler diet for someone as important as Oblamer. But even dumb-o-crat talking heads aren’t buying this “reimagining” of tarp as anything but the same ole line. And the wind had been sucked out of the plan to make Republicans look bad for not passing “this jobs bill now” before he even hit the lawn with his ream of old bad ideas.

    The plan was obvious. Obie is oblivious.

  3. BillK says:

    More to the point, this will cause a significant drop in donations to charities, as the deduction is meant to drive charitable giving in the first place.

    Then who will need to step in and take over for the charities whose funding is down? Yep, the Federal Government.

    Why the GOP never makes a stand for the charitable contribution deduction, pointing out how it will reduce donations, I’ll never know.

    Note also Mr. Obama wants to reorganize deductions for corporate jet ownership – ignoring that corporate jets are almost exclusively a US-made product, as opposed to regular passenger aircraft which are about a 50/50 split between Boeing and Airbus these days.

  4. Papa Louie says:

    The smartest man in the world appears to be all out of new ideas. All he can do is recycle his old ones. He took the same failed ideas from the Stimulus Bill and just changed the name to the Jobs Bill. His brilliant idea is to stimulate job creation by spending more. This will put more money into the hands of job creators — money that he will first have to take out of the pockets of job creators. Why didn’t I think of that? Now I know how to save money on my water bill. Using Obama logic, I’ll just redistribute water from the deep end of my pool to the shallow end, and the volume of water in my pool will magically grow. I’ll never have to pay for water to fill my pool again! (Now, if only I had a pool to try this with. But I’m sure it would work because the smartest man in the world says it will.)

  5. Mithrandir says:

    Will the G.O.P. bother to try to win this argument?

    ~$200,000 / year avoids our representatives from the burden of the tax increase.

    ~Will reduce or stop charitable contributions.

    ~Teachers/police officers work for 30 years or more. Who will continue to pay for them once they are hired? Where is the money going to come from in 2041 when these people retire?

    ~States have the authority over education, why is the fed running around hiring teachers at the state level?

    ~Where will these teachers work? What schools? What districts? Does the local tax base want to pay for, or even need, these teachers?

    ~Why do democrat union people get all this money from other people? Why doesn’t the DNC pay for it?

    ….another unpopular bill, and a winning argument the G.O.P. will undoubtedly fumble away to the other team.

  6. Petronius says:

    One of the President’s new tax-the-rich gimmicks is to remove the tax exemption historically enjoyed on interest from municipal bonds. His proposed tax would apply to “the rich” –– but since it is ordinarily “the rich” who invest in munis, the tax would in effect hit interest income from all munis and impact the bond market nationwide.

    Because of their tax exempt status, munis pay a lower rate of interest than private bonds. If Nerobama and the Sandinistas in Congress were to remove the exemption, then State, local, and municipal governments would experience higher debt-issuance costs.

    In other words, cities and States must then either offer bonds carrying a higher rate of interest competitive with that offered by private corporations (banks, utilities, insurance companies, etc.), or they must discount the face value of their bonds, in order to continue to attract investment capital in the bond market. This added cost to the cities and States would then be passed through to their taxpayers. Moreover, the value of all outstanding munis would also fall. Thus the proposal represents a tremendous blow to State and local governments, and to their taxpayers and bondholders alike.


    When Nerobama was teaching constitutional law at Trinity United Church (or wherever), he must somehow have overlooked McCulloch v. Maryland (1819) and its progeny.

    In that case Chief Justice John Marshall famously quipped that “the power to tax involves the power to destroy,” and, therefore, he determined that a State tax on the Bank of the United States was unconstitutional, and that the States were without authority to tax the U.S. government or its agencies or instrumentalities.

    Marshall’s rule of tax immunity first laid down in 1819 in McCulloch v. Maryland later came to be applied to State and local governments as well. This doctrine of intergovernmental tax immunity has been elaborated by the U.S. Supreme Court in case after case.

    The tax immunity covers government bonds and the interest on them, since to tax these bonds would strike at the government’s borrowing power. Thus the Supreme Court has held that Federal securities are free from State taxation. Similarly, the Court has long held that State and municipal bonds, and the interest on them, are immune from Federal taxation. See, e.g., Mercantile Bank v. New York, 121 U.S. 138 (1887) and Pollock v. Farmers’ Loan & Trust Company, 158 U.S. 601 (1895).

    To eliminate the tax exemption enjoyed by State and municipal governments and their bonds “would be to break down all constitutional limitations of the powers of Congress and completely wipe out the sovereignty of the states.” Chief Justice William H. Taft, Bailey v. Drexel Furniture Company, 259 U.S. 20 (1922).

    As noted at the close of Bloomberg’s article, the proposed tax on munis will be dead on arrival in Congress. What Bloomberg fails to mention, however, is how this White House proposal demonstrates the naked contempt that Nerobama and his regime hold for the Constitution, laws, traditions, Federal system, and economic health of the people of the United States.

  7. proreason says:

    Petronius, you have given one example of the massive disruptions that will certainly happen when the tax code is tinkered with in a major way. Every single deduction or credit was put there for a purpose and every one that is removed will hurt a lot of people.

    Other major disruptions will happen if any of the following are tinkered with:
    – mortgage interest deduction
    – charitable deduction
    – child care deduction or child care credit
    – property tax deduction
    – medical decuctions (already tinkered with by Obama – raised from 7.5 to 10% of agi)
    – exemptions
    – standard deductions
    – any credit
    – depreciation rules
    – rules about deductability of business expenses
    – any tax rate

    plus hundreds, perhaps thousands, that have the potential of putting entire industries out of business.

    People lightheartedly think the entire code should be scrapped and a flat tax put in place. You can bet your last dollar that people who say that think that they will come out ahead. They are fools. Nobody can possibly imagine the distruptions something that major would have on hundreds of millions of lives. Even if they “come out ahead”, the side impacts can ruin their lives. See below for just one example.

    The only rational approach is to simplify the code over a long period of time. For example, if the mortgage deduction is eliminated, it either needs to happen over a 15 to 25 year period, or the housing industry will be even more destroyed than it already is, many thousands of people will go bankrupt, and hundreds of thousands more jobs will be lost.

    Personally, the municpal bond interest deduction is one I hate, because it was written explicitly for the idle rich wealthy people so that they can shield 100% of their income from taxes. But even that one, as you say, will have extremely negative impacts on local governments and cause significantly higher state and local taxes for everybody.

    The corporate jet farce is another one. Well sure, why do fat cats deserve that break? Maybe not, maybe so, but take it away and thousands of people are going to lose their jobs in one of the last industries still centered in the US…corporate jet manufacturing. Good jobs too.

    Every change will have similar impacts.

    I liken the popular tax “change” (i.e., flat tax) that so many people are so excited about to “hope and change”. If you want it, you better damn hope you will be one of the lucky ones. But what makes you think you will be??

    The way I think about it is that conservatism is all about caution. It was ridiculously risky to place a bet that the Moron was going to make positive changes to the country, since he promised it would be “fundamental”. Even if I had liked what the marxist was saying, I would have thought it was fundamentally stupid. Anyone who thinks fundamental change of any nature will be beneficial is taking just as big a risk.

    I want to get back as quickly as possible to what worked like clockwork for the 230 years before Jan 2009, and then only make GRADUAL and PROVEN changes that a majority of people UNDERSTAND and SUPPORT. That’s conservative. Overhauling the tax code because you think you will pay a couple grand less is radical not conservative.

    The best approach to the tax code is to shrink governement, and lower the tax rates for everybody. That is the only completely rational approach.

  8. mr_bill says:

    The more I think about it, this whole “Jobs Bill” is just another game of 3 Card Monte dealt by the nerobama regime. He claims he wants to extend the payroll tax deduction and pay for it with other new taxes. Ok, let’s see where that goes:

    To pay for it (so the bill can be scored as not adding to the national debt), he proposes eliminating tax deductions for those who make more than $200,000. A goodly portion of those folks who gross over $200,000 are small business owners.

    So, after the payroll tax reduction, their businesses net more. Just as soon as they get happy about having a better net, they get smacked with an increase in their personal income tax via the elimination of deductions. My guess is that the increase in personal income tax will exceed any reduction afforded by the payroll tax reduction. The people end up with less net income and less to reinvest in the business or use to hire new employees. Of course, the federal government will see a modest increase in revenues, but it will be short lived as businesses will lay off, close, or move out of the country. In the meantime, nerobama will be looking for the unemployment rate to drop and he won’t be able to figure out why it isn’t going down.

    Another example: He wants more “shovel ready jobs” building roads, etc., but he wants to tax oil & gas companies more which will raise gas prices and fewer people will drive on those roads, should they ever actually construct any (rather than letting the unions steal all the money). What good are more roads if people can’t afford to drive on them?

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