American Elephants


Obama’s Approval Rates Down. Inflation Up. Spending Up. Taxes—Going Up. by The Elephant's Child

Talk radio has been full of Obama’s declining poll numbers.  A new Washington Post-ABC News Poll this week finds about two our of three Americans now disapprove of the president’s job on gas prices.  59% disapprove of Obama’s job on the sluggish economy, including 50% who intensely disapprove. That’s the worst yet in a Post poll.

The election, of course, is not until November.  But people start to really notice when reality arrives at their pocketbook. High gas prices hurt those who drive long distances or spend time stuck in traffic, but they also add to the inflation in the cost of everything you buy. Obama’s numbers are particularly down among women.  How can this be when the carefully planned strategy of the “Republicans’ War on Women” was supposed to sway emotions?

Women do most of the grocery shopping, as well as buy a lot of gasoline. Prices at the grocery store are up significantly. Some firms have chosen to make their packages smaller,for the same price, assuming that you won’t notice.  A can of Solid White Albacore Tuna used to be 8 oz. The can size looks the same, but it now contains 5 oz. News reports have pegged inflation as over 8%, but the shrinking content of the tuna can has that beat all hollow.

James Pethokoukis, writing at The American, said that:

The Obama administration has already conceded it has no long-term plan to deal with rising U.S. debt, driven for the most part by social insurance spending. Testifying before the House Budget Committee recently, Treasury Secretary Tim Geithner told Chairman Paul Ryan the following: “We’re not coming before you to say we have a definitive solution to that long-term problem. What we do know is we don’t like yours.” Even Obama’s ten-year plan doesn’t keep the debt burden from increasing.

A new book The Escape Artists; How Obama’s Team Fumbled the Recovery says that “in 2009, the president asked then White House Budget Director Peter Orszag to draft a secret memo laying out the government’s options in the event of a fiscal crisis in which a runaway deficit sent interest rates spiraling upward.”

So instead of developing a long-term plan to reduce the risk to the economy, Obama plowed ahead with his environmental agenda and ObamaCare, and if it all doesn’t work, then there is the Orszag plan to rely on.  We don’t know, but Orszag, who now works for Citigroup, believes that Americans are undertaxed. Scheiber writes elsewhere in Escape Artists that Orszag believed in repealing all the Bush tax cuts, not just the top-income variety. That would be a $4.5 trillion tax hike right off the bat. Orszag was the one behind ObamaCare’s Independent Medicare Payment Advisory Board, which will have the power to cut medicare provider payments if Medicare costs rise too fast. And Orszag really liked the idea of a VAT. This is Pethokoukis speculation, but informed speculation.

Economist Greg Mankiw notes that the president is now calling for an all-in dividend tax rate of almost 45 percent — the highest rate in 27 years. First he would allow the 2003 dividend tax rate to expire which would push the top dividend tax rate up from 15 to 39.6 percent. On top of that he wants to phase out deductions for high-income taxpayers. Then ObamaCare will impose an additional 3.8% percent tax on dividends and other investment income. The top rate wold be 44.6 percent —almost triple today’s 15 percent rate.

Obama talks a lot about “the expiration of the Bush tax cuts,” as if that was something done only by the hated Bush, but they were approved by Congresses of both parties, and presidents of both parties, including Obama. Democrats look at tax rates in the Roosevelt administration, and the Clinton administration during the dot-com bubble — and say see, we got through that just fine, without ever understanding the drag of high taxes on the economy, and the misery for ordinary people.

Grover Norquist, president of Americans for Tax Reform, has a list of what you can expect from the taxman, coming up. It’s pretty scary. The other thing Democrats never understand is that high income people have lots of options. They can invest their money in ways that shelter them from high taxes (think Warren Buffet), they can move  (think John Kerry mooring his yacht in another state to avoid taxes),  they can invest their money abroad, or they can move abroad.  It’s ordinary people who don’t have as many options.

You can look at the states. States governed by Democrats  have, in general, tried to raise taxes to cover their budget deficits, and triggered an exodus of high income people moving to lower tax states.  States with Republican governors, have, in general, cut back on spending and lowered taxes. Guess which states are in better fiscal condition, have more growth, more jobs.Some people are just incapable of learning from the evidence.

 

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