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Why the Obama tax hikes have only just begun
American Enterprise ^ | 01/02/2013 | James Pethokoukis

Posted on 01/02/2013 11:45:49 AM PST by SeekAndFind

When an economy is booming and jobs are plentiful, a “do no harm” approach to public policy will suffice. If GDP were expanding at a 4% annual rate and the unemployment rate were 5% and the national debt were low, then the fiscal cliff deal might be tolerable rather than terrible. While it won’t create any jobs or add to growth — just the opposite in fact — and it will only cut the national debt by a rounding-error amount, passage does avoid an across-the-board income tax hike and probable recession.

So that’s something. But good enough? Not really. Avoiding major unforced errors is necessary but insufficient when you’re way behind in the game.

But we’re not even doing that. Total taxes are going up some $220 billion this year, including both the Obama income tax hikes and the Obamacare tax hikes. Even worse, the income tax hikes raise the burden on working, saving, and investing. They make our mess of a tax code even more damaging to growth than what it was before.

Nor is Obama done pushing higher taxes. As he said New Year’s Eve, concerning the outstanding issues of the sequester and debt ceiling:

I want to make clear that any agreement we have to deal with these automatic spending cuts that are being threatened for next month, those also have to be balanced, because, remember, my principle always has been let’s do things in a balanced, responsible way. And that means the revenues have to be part of the equation in turning off the sequester and eliminating these automatic spending cuts, as well as spending cuts. Now, the same is true for any future deficit agreement. Obviously we’re going to have to do more to reduce our debt and our deficit. I’m willing to do more, but it’s going to have to be balanced. We’re going to have do it in a balanced responsible way.

How much more “balance” does Obama want?

1. Well, the fiscal cliff deal is a $620 billion tax hike, according to the Congressional Budget Office. Obama’s original offer to House Speaker John Boehner called for $1.6 trillion in tax hikes, including a) $960 billion in higher tax rates and higher taxes on investment income along with b) $600 billion in additional taxes, such as limiting tax breaks for wealthier Americans.

2. In a November policy memo, White House economists thought a tax hike of around $500 billion was doable via broadening the tax base.

3. Also recall that the president’s 2013 budget called for a $300 billion corporate tax hike.

So adding it all up, it would seem the president’s second term goal is for roughly $2 trillion in new taxes. We’re only one-third of the way there.

But what leverage will Obama have to make good on his tax-hike threats? As The Wall Street Journal editorial page notes today, “The President has had unusual leverage over Republicans because he just won re-election and because taxes were going to go up even if they did nothing.”

One potential Obama bargaining chip is the sequester, particularly the $500 billion in defense cuts that many GOPers loathe. So perhaps Obama can offer to turn off the defense cuts in exchange for $500 billion from limiting tax breaks for the rich. And then maybe another $300 billion in corporate tax hikes for agreeing to change how Social Security benefits are calculated. Many scenarios are possible. What’s for sure is that the Obama desires vastly higher taxes to pay for his expanded welfare state. Desires and needs them. And it’s now Democrat economic theology that tax rates could return to pre-Reagan levels without hurting growth.

Tax hikes? Obama is only just getting started.



TOPICS: Business/Economy; Culture/Society; Government
KEYWORDS: obama; tax; taxes; taxhikes

1 posted on 01/02/2013 11:45:57 AM PST by SeekAndFind
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To: SeekAndFind

May Obama’s tax hikes be felt the most by those who voted for him.


2 posted on 01/02/2013 11:53:08 AM PST by F15Eagle (1 John 5:4-5, 4:15, 5:13; John 3:17-18, 6:69, 11:25, 14:6, 20:31; Rom10:8-11; 1 Tim 2:5; Titus 3:4-5)
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To: SeekAndFind

“...just begun”

We haven’t seen anything yet, Obamacare is going to require such massive funding it will change everything. The longer it’s in place, the more it will require. Can you say good-bye to a strong DOD?


3 posted on 01/02/2013 11:56:06 AM PST by izzatzo
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To: F15Eagle

Well, the Obama policy for four years hit his voters hard...high unemployment, lower wages, higher cost of living, higher insurance costs, more on food stamps and welfare. They were successfully convinced it was someone else’s fault. I have no doubt they’ll continue to fall for the same lies, sadly enough. Maybe enough people are willing to rightly blame him four years from now to go a different direction, but I doubt it. Even if it happens, 80+% of those hit hard will still vote Democrat.


4 posted on 01/02/2013 11:57:03 AM PST by ilgipper (Obama supporters are comprised of the uninformed & the ill-informed)
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To: SeekAndFind

This is the beginning. Folding your retirement accounts and pension (if you have one) into the SS system is next.

As the saying goes... get your money out of the country before your country gets your money out of you.


5 posted on 01/02/2013 11:59:06 AM PST by aMorePerfectUnion (Gone rogue, gone Galt, gone international. Gone.)
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To: aMorePerfectUnion

RE: get your money out of the country before your country gets your money out of you.

Thousands of the “rich” Americans did just that and placed their money in Swiss Bank accounts.

Did them little good. In fact it made them target for IRS prosecution.

The Swiss simply folded to the IRS and revealed their accounts.

Romney had part of his money in the Caymans. The newspapers outed it anyway.


6 posted on 01/02/2013 12:04:10 PM PST by SeekAndFind
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To: SeekAndFind

Elections have consequences.

If America wanted a leader, they’d have elected one. The government they deserve.

SnakeDoc


7 posted on 01/02/2013 12:04:48 PM PST by SnakeDoctor (Come and take it.)
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To: aMorePerfectUnion
This is the beginning. Folding your retirement accounts and pension (if you have one) into the SS system is next.

Hardly a day goes by that I don't find some article in the press that is prepping the ground for that.


8 posted on 01/02/2013 12:08:46 PM PST by Buckeye McFrog
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To: SeekAndFind

“Thousands of the “rich” Americans did just that and placed their money in Swiss Bank accounts.

“Did them little good. In fact it made them target for IRS prosecution.

The prosecuted ones are the ones who did not report their foreign holdings. It is not illegal to have a foreign bank account or brokerage. You must report it. They did not. RINOmney did.


9 posted on 01/02/2013 12:10:57 PM PST by aMorePerfectUnion (Gone rogue, gone Galt, gone international. Gone.)
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To: aMorePerfectUnion

So, you have a foreign bank account, you reported it. It then becomes liable for taxation...

How does that help with this : “get your money out of the country before your country gets your money out of you.”?

You get your money out of the country and the country gets the money out of you anyway.


10 posted on 01/02/2013 12:14:14 PM PST by SeekAndFind
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To: SeekAndFind

spending needs to be paid for


11 posted on 01/02/2013 12:17:39 PM PST by ksen
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To: ksen

RE: spending needs to be paid for

Only the following choices I can think of:

1) Tax
2) Borrow
3) Print

If anyone else has another way of paying for government spending, I am all ears.


12 posted on 01/02/2013 12:23:00 PM PST by SeekAndFind
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To: SeekAndFind

That reminds me of years ago, in the 90’s, when I was going to board a plane and two burly agents pulled a man aside and asked him if he was carrying over $10,000 in cash. The man hadn’t and they let him go to ask another person the same thing.


13 posted on 01/02/2013 12:42:21 PM PST by dragonblustar (Allah Ain't So Akbar!)
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To: SeekAndFind

RE: spending needs to be paid for

Only the following choices I can think of:

1) Tax
2) Borrow
3) Print

If anyone else has another way of paying for government spending, I am all ears.


And today’s GOP compains about all 3 ways to pay for government spending. As we are in a demand-driven slowdown/recession slashing spending from the only entity doing any real spending, the government, is not what needs to happen right now.

There’s enough slack in the economy to allow more printing of money without having to worry about inflation but I think the wiser course is to pay for the spending through tax collections. Fiscal responsibility does not mean spending cuts only, which seems to be the current stance of the GOP.


14 posted on 01/02/2013 12:56:46 PM PST by ksen
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To: ksen

Well I don’t know about you, but I’m tapped out. If you wanna give the govt more of your hard-earned income to squander on pork and other pet projects, by all means, go right ahead. Don’t presume to speak for me, however.


15 posted on 01/02/2013 1:06:28 PM PST by Prince of Space (Be Breitbart, baby. LIFB.)
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To: SeekAndFind

Why?
(now THERE is a stupid question)
- because he can (and will)
and there is NOTHING (You and I can do) because there is nobody (besides myself and a few others) who are willing to stand up and attempt to take this country back.


16 posted on 01/02/2013 1:07:18 PM PST by jongaltsr
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To: SeekAndFind

The government has no problem losing money on Bank and GM bailouts then hitting up the taxpayer for the money. I am surprised no one has figured this out. The Bankers are taking over the country and our pocket book.


17 posted on 01/02/2013 1:20:16 PM PST by Orange1998 (DO NOT PRESS CTRL W)
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To: Prince of Space
Well I don’t know about you, but I’m tapped out. If you wanna give the govt more of your hard-earned income to squander on pork and other pet projects, by all means, go right ahead. Don’t presume to speak for me, however.

wat?

18 posted on 01/02/2013 1:21:05 PM PST by ksen
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To: ksen
There’s enough slack in the economy to allow more printing of money without having to worry about inflation but I think the wiser course is to pay for the spending through tax collections. Fiscal responsibility does not mean spending cuts only, which seems to be the current stance of the GOP.

Drivel. Sounds like you agree with 0 that you can spend and tax your way out of debt. No thanks!

19 posted on 01/02/2013 1:31:30 PM PST by Jane Long (Philippians 2:11)
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To: ksen

Here’s your quote: “There’s enough slack in the economy to allow more printing of money without having to worry about inflation but I think the wiser course is to pay for the spending through tax collections. Fiscal responsibility does not mean spending cuts only, which seems to be the current stance of the GOP.”

You seem to be a-okay with increasing our tax burden. I’m not.

Clear enough?


20 posted on 01/02/2013 1:43:38 PM PST by Prince of Space (Be Breitbart, baby. LIFB.)
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To: izzatzo

“Goodbye to a strong DOD”

While I hate to see that my thinking on a number of things has chaanged drastically since the reelection. Maybe I just don’t care any more. But part of me sees less to protect in the US if we are going to be like france and greece. Also these socialists will use DOD for leftist projects instead of killing people. I know I would not want any conservative children to die in the military for this bunch of traitors.
Given the current environment across the board spending cuts on all departments including defense would make sense to me.


21 posted on 01/02/2013 1:46:22 PM PST by plain talk
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To: plain talk

In the context you state, yes, possibly; in the context I meant, no.


22 posted on 01/02/2013 1:50:20 PM PST by izzatzo
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To: Jane Long
Drivel. Sounds like you agree with 0 that you can spend and tax your way out of debt. No thanks!

Sounds like you don't know how to read since I never said you could tax and spend your way out of debt. I've never read anything from the president that says that either.

But you can tax your way out of deficit spending . . . which is what I was saying.

23 posted on 01/02/2013 2:17:33 PM PST by ksen
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To: Prince of Space
You seem to be a-okay with increasing our tax burden. I’m not.

Clear enough?

If we are going to maintain this level of spending for the foreseeable future, then yeah, I'm in favor of paying for it now. Whether that results in higher taxes for you or not I really don't care. What do you have against fiscal responsibility?

24 posted on 01/02/2013 2:21:47 PM PST by ksen
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To: SeekAndFind

all these middle class liberals will not like the taxes any more than conservatives, so i hope they raise hell


25 posted on 01/02/2013 2:29:33 PM PST by ncpatriot
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To: ksen

When Washington decides to be fiscally responsible, then you can lecture me, an average American taxpayer, on MY need to be fiscally responsible.

Again, we dont have a revenue problem....we have a SPENDING problem, and I no longer wish to enable Zero or other profligate politicians to spend more of my hard-earned income on green energy boondoggles, bank bailouts, or teaching African men how to properly wash their genitals to reduce the spread of AIDS!


26 posted on 01/02/2013 3:12:22 PM PST by Prince of Space (Be Breitbart, baby. LIFB.)
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To: ksen

I see by your posting history, and by your own admission, that you’re a democrat. I’m obviously wasting my time arguing with an avowed lefty. So do you get paid to troll here or does your govt. job just let you surf the web at your leisure so you can waste your time harassing conservatives?


27 posted on 01/02/2013 3:31:12 PM PST by Prince of Space (Be Breitbart, baby. LIFB.)
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To: ksen
But you can tax your way out of deficit spending . . . which is what I was saying.

You left off "sometimes". The taxes during and after WWII were sufficient, but everyone was willing to sacrifice ALL their income for the war and the post-war boom brought fresh tax revenue. Tax revenue will decline with increases against a shaky economy. Today are taxes are higher than WWII or any other time (total tax burden). So the people, "rich" included, are tapped out. The golden goose has no more eggs so Obama will make gooseburger.

28 posted on 01/02/2013 3:31:23 PM PST by palmer (Obama = Carter + affirmative action)
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To: Prince of Space
When Washington decides to be fiscally responsible, then you can lecture me, an average American taxpayer, on MY need to be fiscally responsible.

It's probably help if you stopped personalizing everything. I never commented on your fiscal responsibility. But you really should elect politicians that are fiscally responsible and a group running around playing chicken with things like the debt ceiling are hardly being fiscally responsible. We have a bed we are currently lying in and it is going to take a combination of spending cuts and tax hikes to start fixing it. And crying about how going back to Clinton-era tax rates will destroy the economy is just so much ridiculuos fear-mongering.

Again, we dont have a revenue problem....we have a SPENDING problem

We have both right now. We are trying to recover from a severe recession which naturally dampens tax revenues, paying for unfunded military actions, and bailing out a bunch of people that should have been jailed instead of being bailed out by taxpayers so they can just tank the economy again in a couple of years. And instead of trying to fix those things the GOP is busy running around trying to cut programs for people that do need the help and are also the ones that if given cash will actually spend it and get into the economy circulating again.

29 posted on 01/03/2013 5:55:13 AM PST by ksen
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To: ksen

You said: “If we are going to maintain this level of spending for the foreseeable future, then yeah, I’m in favor of paying for it now. Whether that results in higher taxes for you or not I really don’t care. What do you have against fiscal responsibility?”

Sounds personal to me.

Stop blaming the GOP for this president’s economy. After 4 years, this mess belongs to him. He pledged he would cut the deficit in half by the end of his first term, but he failed miserably. He said he would bring all the troops home in his first 16 months in office, thereby ending the “unfunded wars” problem you mentioned, and again he failed to do so. Instead of criticizing his actions, you lay the blame on republicans, who really have little power to stop this idiot as he takes our country down. You really have a hard-on for Zero, like most obamabots, and it’s pathetic to see.


30 posted on 01/03/2013 1:01:05 PM PST by Prince of Space (Be Breitbart, baby. LIFB.)
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To: Prince of Space
Stop blaming the GOP for this president’s economy. After 4 years, this mess belongs to him.

This economy didn't just show up fully formed in Jan 2009. But the Bush blaming does start to wear a little thin after 4 years.

He pledged he would cut the deficit in half by the end of his first term, but he failed miserably.

Well, that was kind of a dumb pledge to make given that we know now how serious the trouble was that the economy was in. And GOP obstructionism certainly didn't help.

He said he would bring all the troops home in his first 16 months in office, thereby ending the “unfunded wars” problem you mentioned, and again he failed to do so.

Actually I think he said all combat troops home from Iraq, which he did. And he also kept to President Bush's timeline to bring the rest of the troops out of Iraq as well.

Instead of criticizing his actions, you lay the blame on republicans, who really have little power to stop this idiot as he takes our country down.

The GOP has been responsible for the most do-nothing congress in history. Their hold on the House, of which gerrymandered districts are responsible, and having the filibuster in the Senate has allowed the GOP to block President Obama at every step. So yeah, the GOP does get some blame.

But the country isn't going down. The recovery is starting up and as long as the GOP doesn't play the fool with the debt ceiling talks we should be ok.

31 posted on 01/03/2013 1:29:46 PM PST by ksen
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To: ksen

Holy crap. Dude. You parrot the talking points of the left. You haven’t gone liberal on us, have you?


32 posted on 01/03/2013 1:40:12 PM PST by Lazamataz (LAZ'S LAW: As an argument with liberals goes on, the probability of being called racist approaches 1)
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To: Lazamataz

I have!

Don’t you remember yelling at me a couple of weeks ago?

Still love my country though and am even sending one boy to the navy this year and one to the air force next year.


33 posted on 01/03/2013 1:44:08 PM PST by ksen
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To: ksen
I have [become a liberal]!

Such a shame, to watch someone lose their mind.

What changed you? A great package of Federal handouts? Spending too much time on MSNBC? Correcting too many High School book reviews of Marx's Das Kapital? A loss of God in your life? Brain lesions?

What do you hope to accomplish here on Free Republic?Still love my country though and am even sending one boy to the navy this year and one to the air force next year.

Families in the USSR had similar motivations and made similar sacrifices. Didn't excuse their objectionable ideology.

34 posted on 01/03/2013 1:52:50 PM PST by Lazamataz (LAZ'S LAW: As an argument with liberals goes on, the probability of being called racist approaches 1)
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To: Lazamataz
What changed you?

I started hitting this, and hitting that and next thing you know *poof!*

If you really want to know it was just exposing myself to more that just the conservative echo chamber. And if we talked and kept the knee-jerking to a minimum we'd probably find out we agree on quite a few things.

What do you hope to accomplish here on Free Republic?

"Accomplish?"

Not much. I just come here to post and have fun.

35 posted on 01/03/2013 2:01:01 PM PST by ksen
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To: ksen

The recovery is starting up...

__________________

I’ve been fed this nonsense for the past couple of years....and don’t believe it for a nano second.


36 posted on 01/03/2013 3:06:02 PM PST by SumProVita (Cogito, ergo....Sum Pro Vita - Modified Descartes)
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To: ksen

I used to be a democrat in my misguided youth, but it’s rare that someone older than that does an about face so late in life. Therefore, either you’ve always been a liberal troll on this forum or you’ve got a brain tumor. Whichever one it is, you definitely need help.


37 posted on 01/03/2013 4:08:23 PM PST by Prince of Space (Be Breitbart, baby. LIFB.)
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To: Prince of Space

you black and white guys are so quaint


38 posted on 01/03/2013 5:24:20 PM PST by ksen
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