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Democrats ready to drown, not just soak, the "rich"

During Monday's broadcast, Rush Limbaugh asked an interesting question: Just how many tax increases on "the rich" have Democrats proposed so far?

Let's see:

  • President Obama (when he was still candidate Obama) proposed assessing Social Security tax on annual payroll wages over $250,000. Currently, Social Security tax is not collected on wages over $102,000. Under Obama's proposal, incomes between $102,000 and $250,000 would still be protected from Social Security payroll taxes.
  • President Obama has every intention of letting the tax rates established by President Bush for the top two income tax brackets expire in 2010. Those brackets, currently at 33% and 35%, will then rise to 36% and 39.5%.
  • President Obama proposed capping the amount of deductions for mortgage interest, investment expenses, and charitable contributions at 28%.
  • Democrats are now proposing a "surtax" on wealthy individuals earning over $280,000 and couples earning over $350,000. The surtax ranges between 1% and 3% based on income (or between 4% an 6%, depending on whose proposal you consider).

How does all of this add up? For very highly paid salaried employees, 6.5% of their income above $250,000 will be taken away via the proposed Social Security payroll deduction. Reducing the income tax deductions for mortgage interest, investment expenses, and charitable donations will lead to higher adjusted gross incomes, which will then be subjected to the higher rate of 39.5% for the top tax bracket. That higher adjusted income would also be subjected to the new healthcare surtaxes. It's not a stretch to also assume that tax increases at the local and state levels will be targeted primarily at those who earn over $200,000 a year.

Who really gets overwhelmed by these tax increases? Not the Warren Buffets, or Ted Turners, or Sumner Redstones. Not the Kennedys, not the Rockefellers, not the Hiltons or the Fords or the Heinz-Kerrys. Not the Oprahs or Michael Jordans or Arnold Schwartzeneggers. Not the John Thains or the Angelo Mozilos or Daniel Mudds or Carl Icahns. Not the Steven Spielbergs or Michael Eisners or David Geffens. Not the swank denizens of West Palm Beach or Beverly Hills or the Hamptons. Not the "old money," or the super rich.

The people who really get hammered by these huge tax increases are the people who came from middle class backgrounds, went to college and then graduate school and mastered a highly-specialized vocation (or became a successful entertainer or athlete, but not a superstar), or who have started their own businesses, and then worked very hard to earn a comfortable middle-six-figure income. They are the people who followed their dreams and fulfilled the wishes of their parents by studying, working hard, and finally achieving success. They are the dreamers of the American Dream. They are usually the first generation of their family to really "make it big." They are the people that our country is supposed to help build up and reward. And the Democrats are poised to snatch everything they have worked for right out from underneath them, and, for those right at the edge of top tax bracket, leave them worse off financially than those who earn tens of thousands of dollars a year less per year.

Victor Davis Hanson has been doing the math as well, and he gets the dynamics of the problem exactly right:

... the results of the Obama war against them are threefold: 1) in major key states, the productive minority's state income taxes will near or exceed 10%; their federal rates will go to 40%; the abolition of caps on FICA will ensure 15% plus of most of their income will go for new Medicare and Social Security bites; and they may well be eligible for a newly proposed punitive health-care surcharge tax of 4-6%.

If one were to add all that up (forget rises in sales taxes, inheritance taxes, luxury taxes, etc.), then one can get to 70% of one's income. So right this minute, the electrical contractor is thinking:

"I made $412,000 last year due to Saturday jobs, overtime, risky bidding, gambles on new equipment, and new lines of credit, but under Obama I will pay maybe $50-80,000 more of my income to the government. In other words the cost of, say, hiring two more entry-level electricians, or the cost of outfitting an entire new van with boom and equipment, or what I cleared every Saturday last year -- all that will go to the government."

And that means rippling throughout this key sector of the economy -- even before these taxes have been enacted -- are hesitation, stasis, and ultimately constriction -- at first for psychological reasons, soon confirmed by the actual facts of less money. In short, very bright people will be thinking how to hide income, how to barter, how to slow down and not produce goods and services, rather than blast full speed ahead and enrich angry others.

[...]

Final observations: Obama brilliantly conflated the Wall Street class with the upper-tier of Main Street in Animal Farm fashion: the former gets lectured, but stays enriched through bailouts; the latter takes both the moral hit for the former's crimes and greed and the actual hit in higher taxes.

(Nota bene: the new Democrats, in Prince Charles fashion, like the taste and culture of the hyper-rich, who care little about taxes, are sensitive behind their ramparts to the less well off, and know high-culture (think Streisand, Gates, Soros, the Georgetown/Hollwood/Silicon Valley, Upper East Side, Cambridge, Mass, set). These aristoi despise the wheeler-dealer, always on the move, uppity, wanna-get-rich scrambler that is desperately trying to get his get kid through Public U, and add a wing on his gross MacMansion, while towing his outboard up to the lake for five hours of water-skiing, without an opera, symphony, or NPR analysis on the radio).

As WizBang's own HughS and many others have repeatedly emphasized, nothing about the Obama Administration's (or the Democratic party's) economic plans is really meant to stimulate the economy. There is honestly no way that their plans can. The massive tax increases necessary to fund President Obama's benevolent socialist utopian fantasies will most likely keep the economy stagnant, as small business owners and skilled professionals begin to actively avoid risks and deliberately slow the growth of their businesses in order to keep from being overtaken by ever-increasing tax burdens.

For years, France has struggled with lackluster economic growth and unemployment permanently stuck between 8% and 10%. High taxes, draconian employment regulations, massive public welfare and pension schemes, and incredibly generous government-mandated employee benefits programs have created the perfect conditions for economic stagnation and an ever-growing population of permanently under-employed residents, particularly immigrants from Africa and Muslim nations.

If the Democrats succeed in stifling small business, leaving only their valued constituencies in Big Business, Big Labor, and Big Government largely in charge of planning our economy, then we will be headed directly down the road traveled by European socialist democracies during the 1960's and 1970's.

Many of those nations have seen the error of their ways, and are now employing free market economic solutions like cutting tax rates, limiting regulations in order to increase competition, and encouraging greater private investments in formerly state-managed businesses entities.

How long before America understands that it is currently traveling backward with respect to economic progress, not forward?


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Comments (33)

Heh - When you get... (Below threshold)
apb:

Heh -

When you get down to brass tacks, liberals are pretty f*cking stupid. They don't understand their hatred for the things (and people) they don't understand will end up completely destroying their causes.

Sober up, middle America - you're lives are being destroyed. How's your Hope 'n' Change now, dumbasses?

Did I mention DJLiar is a c... (Below threshold)
jmc:

Did I mention DJLiar is a coward as well as a liar?

Who's DJLiar? Rest assured... (Below threshold)
Oyster:

Who's DJLiar? Rest assured, jmc, God may love you, but the rest of us think you're an asshole.

The Stimulus was never mean... (Below threshold)
Bob:

The Stimulus was never meant to improve the economy, only to grow government. If the President gave a damn about the economy, he could improve it through a simple announcement: So long as the country remains in recession, there will be (1) no Obama-care health reform, (2) no Cap-N-Trade legislation, and (3) no tax increases, including no repeal of the Bush tax cuts. (Courtesy of Bill Kristol.) With this information, potential investors would be much more likely to invest than they will be when faced with more government, more regulation and more taxes. Obama does not want quick economic recovery; more economic crisis means more public willingness to expand government, BHO's primary goal, motivating his every action.

Wouldn't work, Bob. Key ph... (Below threshold)
wolfwalker:

Wouldn't work, Bob. Key phrase: as long as the economy remains in recession. You've just given the producers and the investors an incentive to keep the economy in recession. A better phrasing might be "no new spending until the economy can support it without going deeper into, or back into, recession."

Michael asked: How long before America understands that it is currently traveling backward with respect to economic progress, not forward?

How high can you count?

"How long before America un... (Below threshold)
DaveD:

"How long before America understands that it is currently traveling backward with respect to economic progress, not forward?"

With the 2010 elections we will know whether America begins to understand. I know the turkey currently in residence at the White House will never get it either because he is incapable or just doesn't want to. All that matters really is that middle class America gets it. If they do, the Obama/Pelosi problem will be taken care of.

So long as the "turkey curr... (Below threshold)
SShiell:

So long as the "turkey currently in residence at the White House" acts like his 53% of the vote in the last general election was 90%, he will continue to go his own way in leading this country to become a second rate power.

One key fact that morons on... (Below threshold)
_Mike_:

One key fact that morons on the Left miss (see jmc) is that money spent by the government is not equivalent to money spent by the people who earned it. To understand the difference, one must first understand that wealth is created not simply distributed and then understand how wealth is created.

The Social Security tax inc... (Below threshold)
James H:

The Social Security tax increase is not a bad idea, though I would slap on the taxes for incomes between $101,000 and $250,000. Why? Because Social Security stands a good chance of going broke in the long run, and I believe increasing the Soc. Security payroll tax could alleviate some of the fiscal strain. That, and jacking up the age when people can start to collect benefits.

Interesting nugget: Social Security was originally intended to allow a person to live the last 5-10 years or so of his life with dignity. But with life expectancies climbing, we are now in a situation where people can conceivably collect benefits for 20 years or more.

Nothing sobers the mind and... (Below threshold)
MPR:

Nothing sobers the mind and focuses the attention of someone who loses their job or has to lay off a good employee. When people see their hard work and sacrifice circling the drain for Obamalala's "spread the wealth around" dream of a changed America, that will bring change. The only good thing is that Obamalala has screwed up so soon that enough people will be jolted to reality for the 2010 elections. Obamalala is going to Mich. today where unemployment is 14%. It is no wonder it won't be a town hall as planned but, a speech with no questions.

Oyster, you got it wrong. I... (Below threshold)
bobdog:

Oyster, you got it wrong. It's possible that God loves JMC and also considers him an asshole, like the rest of us ignorant peasants. I suspect he probably does.

The Social Securit... (Below threshold)
Stan25:
The Social Security tax increase is not a bad idea, though I would slap on the taxes for incomes between $101,000 and $250,000. Why? Because Social Security stands a good chance of going broke in the long run, and I believe increasing the Soc. Security payroll tax could alleviate some of the fiscal strain. That, and jacking up the age when people can start to collect benefits.

What do you mean the Social Security is going broke? It has been broke since the Truman Administration, when the Congress made its first raid on it to cover their spending. It has just been a huge slush fund every since.

The Social Security system makes Bernie Madoff look like a piker. This is all just one vast ponzi scheme. Instead of millions and billions, the Social Security system has bilked the Americans, that have paid into over the years, trillions of dollars.

If someone comes along with proposals to change it to make it more fair, they scream bloody murder. Just look at the havoc that was raised when Bush proposed to privatize it. The Dems in Congress went totally ballistic along with the liberal groups like AARP and it never saw the light of day again. Barry won't do anything about it either.

And just like Europe the un... (Below threshold)
glenn:

And just like Europe the underground economy will grow and grow until it becomes an integral part of the countries economy and can't be taxed or surpressed without pols losing their jobs.

Social Security wa... (Below threshold)
Eric:
Social Security was originally intended to allow a person to live the last 5-10 years or so of his life with dignity.

Actually, that's not quite accurate. But James H, hit on the root problem with Social Security, average life expectancies have significantly increased and Social Security wasn't designed for that.

We all know that you can start collecting from Social Security at 65. When Social Security was created the average life expectancy of an American male was 58 and for 62 for an American female. Social Security was designed so that most Americans spent their working lives contributing into Social Security and then passing away before collecting on it.

Sure there were going to be exceptions, in 1940 only 6% of the population was over the age of 65. That left 94% of the population paying into Social Security to pay the 6% collecting.

But life expectancies have increased. In 2000, the average life expectancy for a female was 78 and 73 for a male. By 2000, 12% of population was over 65. The percentage of population over 65 will continue to grow as the baby boomers move into retirement age and life expectancies continue to increase even more.

Today, the average life expectancy for a woman is 81 and 75 for men. Instead of the average American dying BEFORE being eligible for Social Security, the average American will live more than a decade past retirement age. As more and more of the population moves into collecting Social Security, there is less and less of the remaining population paying into the system to support it.

"How long before America un... (Below threshold)
914:

"How long before America understands it is currently traveling backward with respect to economic progress, not forwards?"

America understands it... Now She just has to pull the handle and flush all the politicians out of our lives.

Steal someone's computer to... (Below threshold)
jmc's sockpuppet:

Steal someone's computer to pose, jmc? A thief as well as a scumbag - what a shock!

Why are You calling somebod... (Below threshold)
914:

Why are You calling somebody a liar over and over jmc?

Unless the DJ You are referring to are the "Democrat Jackass'es" that lie to us continually day after day You are way off topic.

jmc, you have some real lik... (Below threshold)
wetwillie:

jmc, you have some real likeability issues. Maybe you'd find a friendlier audience somewhere bitchier, like Huffington or DU. Your towering intellect is probably wasted here anyway.

It seems that the only way ... (Below threshold)
Plumpplumber(balding):

It seems that the only way to nonviolently save our country Is to deny tis government the tax revenue it needs to exist. Going Galt, underground economy are viable alternatives. We're headed to a major depression, so bartering is a good way to survive.

The primary purpose of thes... (Below threshold)
LaMedusa:

The primary purpose of these taxes is to punish the middle class and send them packing to the poor house. As soon as we have only the wealthy and the serfs, those occupying the poor houses will either be "processed" or pushed into hard labor. Even the "common good" is nowhere to be found under the crooked Fed/elite ruling class.

"Steal someone's computer t... (Below threshold)
LaMedusa:

"Steal someone's computer to pose, jmc? A thief as well as a scumbag - what a shock!"

That's all he does is pose and call other people liars. It's what comes naturally, and pathetically.

"Your towering intellect is... (Below threshold)
LaMedusa:

"Your towering intellect is probably wasted here anyway."

His intellect is towering so far above, not even he can reach it. I wouldn't unleash him on huffpo. Maybe jmc should just go back to DU, Kos, and Salon. He would blend in beautifully there.

jmc, If you think i... (Below threshold)

jmc,
If you think it's fun using ip addresses that
are not yours for the intent of harassment, and
spamming abuse, you're very wrong.
You are right now on the way to being reported
to every ip address you've already used after
being initially banned from Wizbang.
What ever it takes to get the message to you
you are no longer welcome at Wizbang until other wise notified.

"Otherwise Notified?" Maggi... (Below threshold)
Ran:

"Otherwise Notified?" Maggie... you're too kind!..*S*

"If the Democrats succeed i... (Below threshold)
davidt:

"If the Democrats succeed in stifling small business, leaving only their valued constituencies in Big Business, Big Labor, and Big Government largely in charge of planning our economy,"... Then the Democrats have eliminated their competitors.

Small business(and Democrat politics) is how Little People become Big People. Eliminate small business and the Big People are safe in their positions.

I have my "Galt's Gulch, Co... (Below threshold)
sarahconnor2:

I have my "Galt's Gulch, Colorado" t-shirt. I plan to wear it to the polls in 2010.

Soak the rich demacrats lik... (Below threshold)
Flu-Bird:

Soak the rich demacrats like TED KENNEDY,AL GORE,ROBERT BYRD and many many more and yes soak rich hollywood demacratic supporters

They should pass a law that... (Below threshold)

They should pass a law that all congresscritters, cabinet members, the president and the vice president should have all income from whatever source taxed at the highest rate, with no deductions whatsoever. Let them actually feel what they are trying to do to the country. They should also be forbidden to get a paycheck for any days not actually spent in session or in the office. Thus, Congress would not get paid when on a junket, and the President would have to pay for every one of his trips himself.

President Obama pr... (Below threshold)
President Obama proposed capping the amount of deductions for mortgage interest, investment expenses, and charitable contributions at 28%.

That is because the president has yet to actually give any charity, pay money for a mortgage, or be charged for any "investments" that he might make.

I forget to add something t... (Below threshold)
Stan25:

I forget to add something to my previous post. The Congress does not pay into Social Security, but yet they draw on it when they retire. Another thing that will help to save a few billion of the Social Security and in other programs, is take all of the illegal aliens off the roles and ship them back to their country of origin, namely Mexico and China.

Maggie"What ever i... (Below threshold)
retired military:

Maggie

"What ever it takes to get the message to you
you are no longer welcome at Wizbang until other wise notified."

Cant you just make the ban permanent so he can go gaze at his toe pickings and leave us alone?

PLEASE.

I would be willing to send in a small (but not too small) donation to the site if that were to happen.


RM, Considering jmc ... (Below threshold)

RM,
Considering jmc used several proxies to
re-access Wizbang after being sent to chill out,
it's probably a permanent chill out now.

Jmc R.I.P.I. ... (Below threshold)
914:

Jmc R.I.P.I.




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