Filed under: Capitalism, Economy, Law, Taxes | Tags: Taxes and Debt, The Fiscal Cliff, The Unserious President
Twenty-Six Years Ago: President Ronald Reagan passed significant tax reforms that lowered the individual income tax rate, limited deductions, and brought equality to tax rates at all levels. Previously, there had been 15 different marginal rates that reached as high as 50 percent for those in the top brackets. By the time Reagan left office, the number of tax brackets had been reduced to two: 15 percent and 28 percent.
In 1993: President William J. Clinton raised the top two income rates to 36 percent and 39.6 percent while also raising the corporate tax rate, increasing the taxable portion of Social Security benefits and increasing the amount of income taxable for Medicare. This has become known as the “Clinton tax rates.”
In 2001: President George W. Bush reduced the tax rate from 39.6 percent to 35 percent, lowered the capital gains rate and the dividend income rates and expanded credits and deductions such as the Child Tax Credit and the Earned Income Tax Credit.
Smoke, mirrors and time and energy is being spent advancing the myth that raising taxes is the best way to avoid falling off the “fiscal-cliff.”
If you raise taxes as President Obama wants, you would generate maybe $1 trillion over a period of ten years. President Obama’s spending has resulted in trillion-dollar deficits in each of the previous four years. At this rate in ten years we would be looking at $10 trillion in new debt. Under no proposed scenario does raising taxes limit or eliminate the deficit and return us to a balanced budget. The problem is government spending.
The Democrat-run Senate under Majority Leader Harry Reid (D-NV) has refused to produce a budget since April 27, 2009. Refused. They are required by law to produce a budget each year.
There is nothing in any proposal that will satisfy President Obama’s obsessive desire to spend. He’s still talking about “roads and bridges”— the same roads and bridges that he’s been promising to fix since 2008, that turned out not to be “shovel ready.” He wants a new batch of offshore wind farms all along the East Coast. He wants more solar arrays, wind farms, Solyndras, in the name of green energy though even the IPCC has determined that global warming is not anthropogenic, not caused by CO2 or greenhouse gasses, but caused by the action of the sun and cloud formation. The globe has been cooling for 16 years, not warming. And to top it all off, Obama wants another stimulus. The previous stimulus was wasted— all $825 billion of it, and another one would be similarly wasted.
The money is not going to come from raising the rates on the rich. They don’t have enough money, and there aren’t enough of them. So it boils down to this. Either he cuts way back on spending, or he raises taxes big time on the middle class. There are solutions, but no real interest.
Or ask yourself this: Why would a president who has any sense of the American people, the American economy as it is, the 24 million people who are out of work, feel that this is the right time to end the pay freeze on federal employees who are already vastly overpaid compared to their counterparts in the private sector, and do vastly less work? And why would he choose this moment in time to give Vice President Joe Biden a $6,370 raise? Members of Congress only got $900 bucks a year raise.