Diary

Watch Obama 'Tax Cut' Rhetoric

President Obama has been speaking out recently about maintaining Bush-era tax rates on the middle class and even for wealthy Americans. Those rates will expire and rates automatically will go up January 1 if no action is taken by Congress in the lame duck session.

 

And if those rates go up, the shock of higher taxes experienced by tens of millions of voters will fall squarely on Obama and the Democrats, hardly what they want to face entering the 2012 election. No wonder Obama now is standing strong for “tax cuts for the middle class.”

 

It is all political posturing, however, and not any change in his outlook. This is classic Democrat politics. And if tax rates are lowered or maintained at a lower rate for any citizen at any time (except for the poor) Democrats will find two ways to push up rates in another way. So be very suspicious. There is always talk about a value-added tax, increased taxes on energy, new excise taxes, much higher Social Security taxes etc. etc.

 

Obama has been pushing the fiction that he is a friend of the middle class. This is nonsense. One hallmark of left-wing socialistic governments is the absence of a middle class. Just go to communist nations and there is no middle class.  Everyone is poor except the rulers and the government class, which have the privileges. Because a middle class can challenge the ruling elites for power, and that is what many leaders throughout history have feared. So they keep people poor. Just look at the way that Democrats’ excessive taxation, regulation, lawsuits, environmentalism and labor agitation have pushed jobs overseas for decades now.

 

Obama also has been claiming that he gave the middle class a “tax cut” in 2009 which is nonsense. He gave a small “tax rebate” which is different from a “tax cut”.

 

A “rebate” is when the government gives you back money after you have paid it to the government like those $300 government checks Bush handed out in Spring 2008.

 

A “tax cut” is when the government does not collect the money in the first place. It is a “cut” in the tax rate that you pay.

 

But first it is necessary to define what a “tax cut” is because the terminology is false.

 

Today we say that the “Bush tax cuts” have been in force for ten years. They are not “tax cuts”. Because that assumes that there is some stated tax rate which is appropriate and that any reduction is a “cut”.

 

The “Bush tax cuts” should properly be referred to as “Bush-era tax rates” which is what they are and which are lower than they were before Bush. These lower rates were passed by the Congress and signed into law by president Bush.

 

But now if these lower rates are somehow maintained under Obama, Democrats are going to seek big tax increases in other areas like Social Security. Here’s how:

 

Hourly workers now pay 12.4% of their weekly gross income just to Social Security ($12.40 out of every $100 you earn goes to SS). This is the personal contribution from your check (6.2%) and the ‘employer contribution’ which is also 6.2%. But that ‘employer contribution’ is nothing of the sort. It is factored into your wage ahead of time. You, the employee, pay all 12.4%. Don’t ever fool yourself into believing the Democrat spin otherwise.

 

Democrats ideally want to raise Social Security taxes to as much as 25% in order to keep Social Security solvent at the current rates of payout. This would be a substitute for other tax increases.

 

Then look at how Democrats discuss, say, the oil companies. These companies make big profits and pay large amounts of taxes to the government, as well as big royalties. But liberals always say that the oil companies are being “subsidized” by the government. How can they say this?

 

Because liberals come from the point of view that 100% of oil company profits really belong to the government, and that anything less than a 100% tax rate is a “tax cut” or a “subsidy”.

 

So imagine that an oil company made $1 billion in profits and paid $300 million in taxes. Those on the far left consider that to be a $700 million ‘subsidy’.

 

Now imagine the company only paid $275 million the next year on the same profits. Even moderate Democrats will say that that is an additional $25 million “government subsidy” to the company or a $25 million “tax cut”. Never mind that the oil company created the wealth to pay the $275 million in the first place.

 

Meanwhile a company that sells solar panels in fact does absolutely require a real and direct subsidy from the government to stay in business. But environmentalists will never admit that.

 

So any talk about “tax cuts” or “tax rate reductions” by any Democrat any time is a feint. Don’t believe what they say; always look deeper at the language, and always watch what the other hand is doing, like a magician.

 

Liberals are addicted to taxation because it gives them what they want which is MONEY to spend as they wish and then ultimately CONTROL over the people and the nation’s wealth. Or the other way around. Whichever way work for them is fine.

 

So beware of Obama’s promises about “tax cuts for the middle class”.  

 

Please visit my website at www.nikitas3.com for more. You can read excerpts from my book, Right Is Right, which explains why only conservatism can maintain our freedom and prosperity.