Harvard economist Martin Feldstein writes in the Wall Street Journal:
Even if the proposed tax increases are not scheduled to take effect until 2011, households will recognize the permanent reduction in their future incomes and will reduce current spending accordingly. Higher future tax rates on capital gains and dividends will depress share prices immediately and the resulting fall in wealth will cut consumer spending further. Lower share prices will also raise the cost of equity capital, depressing business investment in plant and equipment.
Tax hikes for the poor:
Mr. Obama’s biggest proposed tax increase is the cap-and-trade system of requiring businesses to buy carbon dioxide emission permits. The nonpartisan Congressional Budget Office (CBO) estimates that the proposed permit auctions would raise about $80 billion a year and that these extra taxes would be passed along in higher prices to consumers. Anyone who drives a car, uses public transportation, consumes electricity or buys any product that involves creating CO2 in its production would face higher prices…
But while the cap-and-trade tax rises with income, the relative burden is greatest for low-income households. According to the CBO, households in the lowest-income quintile spend more than 20% of their income on energy intensive items (primarily fuels and electricity), while those in the highest-income quintile spend less than 5% on those products.
Remember the no tax increases pledge that Obama made? Kevin Boland writes:
If you drive a car or flip on a light switch – Democrats have a new national energy tax for you. If you’re a small business owner or if you’re employed by one – Democrats have a new tax for you. If you’re a charity – Democrats have a new tax for your donors. If you’re looking to produce more American energy – Democrats have a new tax for you. If you own stock – Democrats have a new tax for you. And when you’re finally able to relax – after paying all your taxes to Uncle Sam – and you want to kick back, relax, and have a cold beer, you guessed it, Democrats may have a new tax for you too.
When it comes to federal spending, there’s a pattern emerging with President Obama, and it’s not a flattering one. The president says all the right things about the importance of getting the deficit under control, but his actions don’t come close to matching his rhetoric.
An early sign of the disconnect was his heavily publicized demand last month that his Cabinet secretaries shave $100 million from their administrative budgets. Obama said the cuts would “send a signal that we are serious about how government operates” and would help close the “confidence gap” with skeptical Americans. Those cuts amounted to a less-than-confidence-inspiring 0.003% of the 2009 budget, or about 3 cents out of every $1,000.
Then, when he unveiled his 2010 budget last week, Obama made a big deal of his demand for $17 billion in cuts, insisting that the cuts “even by Washington standards … are significant” and that $17 billion is “real money.”
The president got it backward. Out in the rest of the world, $17 billion is a ton of money. But in Washington, where the president is proposing to spend $3.6 trillion next year, $17 billion looks puny – a little less than half a percent of the budget, or the equivalent of cutting a $100 grocery bill by handing back a 50-cent pack of gum.
Anybody who read David Freddoso’s book or looked up Obama’s voting record could have known that his rhetoric was just lies for the gullible.
Over to the health care issue, where John Shadegg explains how capitalism is the right way to reduce health care costs.
President Obama’s pledge to work with health care providers and insurers to scale back costs misses the entire point: health care costs are so high because we are not giving patients choice and forcing insurers to compete. We need robust market reforms – not symbolic gestures. The way to lower prices is to put control in the hands of patients. We need to empower Americans by giving them the freedom to either keep their employer plan or purchase the plan of their choice through a tax credit. Choice and competition will drive prices down and quality up.
Shadegg goes on to explain why the Obama plan does none of this. And why should it? We already know that the Democrats want private health care to fail, so they can usher in single-payer health care. (Just they want private industry to fail so they can nationalize more of the free market)
Putting 120 million Americans on government coverage will create a monopoly that sends costs skyrocketing. Choice will be lost because the enormous government-run plan will put the private plans out of business. In other words, if you like what you have, you will lose it. And while health insurance will be provided, health care will not – like every nationalized health plan across the world, as costs escalate, care will be slashed, patients waitlisted, drugs denied.
Meanwhile, Michele Bachmann notes the looming entitlement crisis is now closer than ever, with the Medicare insolvency date moving earlier.
Yesterday, the Medicare and Social Security Trustees issued a new report that laid out unequivocally that our current Medicare and Social Security programs are on a path for financial implosion and are in need of serious reform.
In fact, the Medicare insolvency date has moved up to 2017. And, that doesn’t include the impact of the so-called “stimulus” bill, which could accelerate insolvency by about 6 months.
And, we’re facing a strain on Social Security like never before, with nearly 80 million retiring Baby Boomers tapping into the funds soon we’ll be spending more to pay benefits than what the system receives in payroll taxes. Yet, we continue to carry on with the status quo, every now and then saying that we need to reform it, but not actually doing anything about it.
Michele is trying to do something about it, but the House is filled with Democrats who never ran a business in their entire lives.
I’ve introduced the Truth In Accounting Act to make government finances truly transparent and open. Not only would financial commitments be crystal clear to Congress, but also to the taxpayers.
Currently, when Congress and the President prepare budget proposals and pass spending bills, they have the luxury of ignoring shortfalls year after year. They prepare, present, and approve budgets which project these estimates over the short-term – usually five or ten years. And, there are a lot of things that can be done on paper to paper over the long-term shortfalls.
My Truth in Accounting Act would require the President to consider these long-term shortfalls when he proposes his budget. And, it would require both the GAO (Government Accountability Office) and the U.S. Treasury to report this information to the Congress so that the numbers can be used when we’re finalizing the annual budget.
Furthermore, my legislation would require that the report be translated into easily comprehensible terms so that nothing could be hidden by complex jargon. The government’s fiscal imbalance would be presented in the whole, and as distributed per person, per worker, and per household.
I hope she is somehow able to pass this bill.