March 1, 2009

A TRILLION HERE AND THERE

Last week was breathtaking in proposed government spending -- dollar wise.

President Barack Obama wowed Democrats in his speech to a joint session of Congress on Tuesday. Republicans were stunned while Democrats played Jack-In-Box to cheer.

Then, on Thursday, the President released details of his economic plan that would take several hundred billion dollars of higher taxes from “wealthy” taxpayers. Right now, they pay 33 to 35 percent, but the rate would be hiked to 39.6%.

Historically, governments collapse when taxes on producers hits 40 percent. Check out China and Germany in 1920-22.

More than 2.6 million Americans would have to pay the higher rates -- according to Bloomberg News.

“It’s a clear repudiation of former President George W. Bush’s policy,” says Peter Morici, an economist at the University of Maryland College Park. “It is more Obama Robin Hood.”

$636,700,000,000

Chris Gonsalves, writing in Newsmax, says: "The Obama tax hikes also include new restrictions on itemized deductions for families that earn more than $250,000 per year."

Deductions for things like charitable donations, mortgage interest and investment expenses will be capped at 28 percent for the wealthiest taxpayers – some 30 percent less than they get currently get.

By 2020, taxpayers in the wealthiest households will pay $636.7 billion in additional taxes according to estimates in the budget proposal.

DETAILS, DETAILS

According to estimates from Deloitte Tax, a married couple with two children under age 17 – and annual income of $500,000 – would owe approximately $11,300 more under current law if all the tax provisions in Obama’s budget request were enacted.

Remainder of the trillion-dollar tax hike would come from $353.5 billion in additional levies on businesses – especially U.S. based multi-national corporations.

Obama’s proposal calls for:

• Significant rewriting the rules on taxability of profits earned overseas,
• Increased enforcement of international tax collections and,
• Changes in accounting that would serve as a “windfall profits tax” aimed largely at oil companies.

WHY SENATOR GREGG SAID NO

Senator Judd Gregg (R-NH) the top Budget Committee Republican, was asked by Obama to join his Cabinet as Commerce Secretary. However, Gregg declined.

He explained:

“The President’s budget plan is once again a missed opportunity for American taxpayers. It raises taxes, implements massive new spending, and fails to make any tough choices to control the deficit.”

Right on!

Trick me once, shame on you. Trick me twice, shame on me.

By Lindsey Wilger Williams, retired newspaper publisher and syndicated columnist