Throughout the past week Barack Obama has successfully portrayed himself as the ultimate economic expert and the great fixer of all of the economic woes that face our Nation. Using the crash of Wall Street giants and their involvement in the mortgage debacle as the catalyst of his economic scare tactics, Obama has managed to pull off one of his greatest deceptions during his Presidential campaign. Portraying himself as an economic genius, blaming all of the collapses of the past few weeks on the GOP, President Bush and John McCain.
Never once did this , “economic genius,” mention that the sub prime loan debacle was begun under the Clinton administration as evidenced from this quote in the New York Times from 1999, ” … Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits … “
Never once did he mention that three of his top economic advisers two of which are on his payroll were among the major architects of the sub prime loan mess. Penny Pritzer his campaign finance chair partnered with Earnst and Young working through Merrill Lynch to create the sub prime loan situation patterned after a Chicago bank that Pritzer was involved with that went belly up seven years ago.
James Johnson former Fannie Mae CEO during the Clinton Administration when this debacle began was the Chairman of Obama’s VP search committee. Franklin Raines though not on the Obama payroll has been a key advisor who while CEO of Fannie Mae milked Fannie for over 90 million dollars while cooking the books to force on paper reaching profit goals which his bonus and pay scale was based upon.
All the while in the last three years the , “economic genius, ” Barack Obama became the second leading recipient of PAC donations from both Fannie Mae and Freddie Mac taking only three year out of nine years of PAC donations to make it into the top two behind Christopher Dodd.
Now he is meeting with these same advisers to scheme a ,”plan,” that he will introduce during the week to solve this mortgage debacle. Meeting with the very same people who started it in the first place to find a solution to the problem. Not only stupid but also extremely hypocritical!
Of course this is only one aspect of the Obama economic idea that shows his, “economic genius.” For times sake I will only discuss his tax idea as an example of the, “genius,” behind the Obama economic plan. Obama claims that he will provide a tax cut for 95% of American tax payers.
Yet one of the first aspects of the Obama tax plan is to reverse the Bush tax cuts which gave, on average, a $1200.00 tax reduction to a family of four. So by reversing the Bush tax cuts Obama will first raise the taxes of every tax payer who received a reduction from President Bush. The Bush tax cuts reduced taxes in ALL income groups across the board. So even if Obama, “reduces,” taxes for ,”95%,” of taxpayers their net bottom line will be a tax increase because of the reversal of the Bush tax cuts.
Now let us move on to Capitol Gain taxes. Obama’s plan is to increase the Capitol Gains tax by 5% from its current 15% to 20%. This one tax increase alone will affect Americans across the board as Capitol Gains come from several sources including stocks, bonds and real estate. Also it is proven that when Capitol Gain tax rates are lowered revenues are up. A question about revenues that has been posed to Obama several times and avoided in his usual stumbling way every time it was asked.
Now for the big kahuna of the Obama tax plan. Raising taxes on income earners who make $250,000 a year or more. Obama refuses to acknowledge though asked time and again, that this one tax increase does not just affect individuals but thousands of small businesses. Many small business people do not separate their personal income from that of their business and as such every aspect of their small company will receive a sizable tax increase under the Obama plan causing many to go belly up as the tax burden will destroy their small company.
The Obama penalizing success plan will take the top marginal tax rate up to 55% while phasing out personal exemptions which will revert many back to the old practice of disguising personal income as a Capitol Gain and begin the migration of capitol to overseas sources where the tax rate would be lower.
Obama’s tax plan will put The United States among the top tax countries in the world and when combining federal and state taxes which will exceed 60% only Hungary will have a higher top tax rate than The United States.
These countries that have such high top tax rates provide a clue as to the economic impact of the Obama tax plan. The average unemployment in these countries is 7.35 percent. Denmark shows only a 3.9 percent unemployment but spends over 5% of its GDP on unemployment programs which in actuality takes its unemployment rate up to over 7 %.
In addition to the increase in unemployment that the Obama plan will spur, investment and manipulation of income from transferring income to capitol gains in order to pay a lesser tax rate will reduce economic growth and greatly slow the economy.
Also because of the high tax rate that already exists in States like New York in addition to the moving of assets abroad to countries like France, Canada and Great Britain to take advantage of lower tax rates, many businesses will move to lower tax states like Florida and Delaware to again avoid the much higher taxation with the combined state and federal taxes.
The long term effects of the Obama plan will come as the deficit will grow because revenues will decrease and taxing the,”rich,” is also not an infinite source of government revenues. When more money is needed to pay for huge entitlements already in place like Social Security and Medicare combined with the Universal Health Care that Obama promises to pass in the first 100 days along with other massive entitlements on the Obama promise list, the only source of taxation to cover these massive government spending programs will be the middle income earners which comprise the majority of the work force.
Barack Obama the, “economic genius,” who surrounds himself with advisers who created and continued the woes on Wall Street, promises massive tax and spending increases thus destroying the economy and picking the pockets of Americans who only want to live their lives without the government on their backs and follow the American dream that the Obama economic plan through taxation will end.
Ken Taylor http://theliberalslies.blogspot.com