Posts Tagged ‘tax hikes’

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Opinion Out of Pittsburgh

November 3, 2008

Ralph R. Reiland writing for the Pittsburgh Tribune:

I interviewed two plumbing company owners over the weekend about Barack Obama’s economic proposals for small business.

One has 15 employees and 12 trucks. The other has 52 employees and 34 trucks. They’re Joe the Plumber, writ large.

Both owners had the same reaction to Obama’s proposed new taxes and mandates. To not have their bottom lines reduced by government fiat, both said they’d be forced to lay off employees.

Specifically, here’s what the owner of the larger firm said regarding six of Obama’s key proposals for the small-business sector: The average wage at his company, figuring the 52 paychecks of his office staff, installers and service workers, is $31,200, $15 an hour.

First, “Barack Obama and Joe Biden will require that employers provide seven paid sick days per year,” states the Obama campaign’s Web site. “I give three paid sick days,” explained the business owner. His extra cost for this one new regulation would be $24,960 (4 extra days, 52 employees, at an average of $120 per day). “That’s one of the women in the office,” he said. “I can make up that cost by letting one of the office people go.”

Second, Obama states that employers will be required to pay 100 percent of the cost of health insurance premiums for 100 percent of their employees or face a tax penalty. “I pay 75 percent of their coverage,” explained the owner. “The family policy is about $11,000. For single guys, it’s about $5,000.” At an average annual cost of $7,000 per policy, his additional cost for 52 employees to cover the 25 percent of the premiums that he currently doesn’t pay is $91,000. “That’s the price of three installers,” he said. “Just to stay even with where I am, I’d have to fire three more people or raise some prices and fire two.”

The result is more unemployment or more inflation, or both.

Third, with the estate tax, Obama is calling for a top tax rate of 45 percent on estates valued above $3.5 million, producing an estimated “death tax” of $675,000 on an estate of $5 million. “You’re kidding,” he said. “They took half my income on the way up and now they want another half when I die?” He estimated that his business is already valued at more than $3 million, in addition to the value of his home and investments. “Why,” he asked, “would I want to grow to 100 employees? What’ll stop them from changing it to 75 percent?”

The cost in jobs that will never be created in the U.S. economy because of this single disincentive to growth? Incalculable.

Fourth, Obama’s economic plan calls for a hike in the minimum wage to $9.50 an hour within three years. The business owner’s reaction? “That’s bad for two reasons. I don’t have anyone at minimum, but raise the bottom by $3 and a guy making $15 wants $18. Plus it’s bad for productivity when people think their pay raises are coming from government instead of from their own individual effort.”

Fifth, saying he’ll “play offense for organized labor,” Obama is proposing that workers should be denied the right to a private ballot at work in deciding whether to unionize. “That’ll never be,” said the plumbing entrepreneur. “I’m in business because I’m independent, not to take orders from a grievance chairman. I’d shut down.”

Sixth, the increase in taxes on this small business owner from Obama’s proposed hike in the income tax rate from 36% to 39.8% on incomes above $200,000 and the proposed increase in Social Security taxes comes to $32,000 per year. “That’s another employee,” he said, referring to the termination of another installer in order to just stay even.

And the jobless plumbers? They can be re-socialized to work for ACORN.

As Obama explained in July: “We cannot continue to rely on our military to achieve the national security objectives we’ve set. We’ve got to have a civilian national security force that’s just as powerful, just as strong, just as well funded.”

As “well funded” as our Armed Forces personnel comes to $119 billion per year in paychecks for “community activism,” a lot of money for registering dead voters, caulking windows, making sure that all the guns are locked up at the municipal buildings, and monitoring the airways to make sure that conservatives don’t have too many talk shows.

 

Bottom line, Obama’s economic plan doesn’t hold water. Neither will our pipes.

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More on the New Definition of “Rich” – 150,000 and Working its Way Down

October 29, 2008

Carl Campanile and Brendan Scott in the NYP deliver more to us on the Biden and his bout of latent patriotism revealing the truth (finally!) about their tax plan and who is considered rich in America. By next Tuesday, the tax hikes could be as inclusive as Bush’s tax cuts

Gaffe-prone Joe Biden put his foot in his mouth again yesterday, mistakenly excluding millions of Americans from his running mate’s tax-cut proposal.

The Delaware senator’s latest blunder came while discussing Republican tax policies during a television interview in his hometown of Scranton, Pa. 

“What we’re saying is, that $87 billion tax break doesn’t need to go to people making an average of $1.4 million,” Biden said.

“It should go to middle-class people, people who make $150,000 a year.”

Actually, Barack Obama has promised to cut taxes on households earning less than $200,000 a year while raising taxes on those who make more than $250,000 annually.

John McCain quickly cashed in on the slip.

During a rally in Hershey, Pa., McCain told supporters the gaffe revealed the Democrats’ true tax-and-spend intentions.

“It’s interesting how their definition of ‘rich’ has a way of creeping down,” McCain said.

“Senator Obama has made a lot of promises. First, he said people making less than $250,000 would benefit from his plan.

“Then, this weekend, he announced in an ad that if you’re a family making less than $200,000 you’ll benefit – but yesterday right here in Pennsylvania, Senator Biden said tax relief should only go to ‘middle-class people’ – people making under $150,000 a year.

“At this rate, it won’t be long before Senator Obama is right back to his vote that Americans making just $42,000 a year should get a tax increase.

“We can’t let that happen,” McCain added.

The Republican nominee has pounded Obama on taxes recently as economic woes have come to dominate the political debate.

Biden’s tax faux pas provided a new distraction for Obama as he tried to focus on broad, uplifting themes, like “change” and “hope,” in the final week of swing-state stumping.

Obama campaign spokesman Tommy Vietor issued a statement that corrected the vice-presidential candidate without explicitly saying so.

“No family making less than $250,000 will see their tax increases one cent,” Vietor said. “And if your family makes less than $200,000 – as 95 percent of workers and their families do – you’ll get a tax cut.”

Vietor went on to call McCain’s attack on Biden “desperate.”

“Maybe the McCain campaign keeps lying about Obama’s tax plan because with seven days left in this election, voters are rejecting McCain’s plan to give billions more in tax giveaways to big corporations and the wealthiest Americans,” he said.

Also during the stop in Hershey, McCain took a moment to shrug off reports of discord between his campaign staff and his running mate, Sarah Palin.

“By the way, when two mavericks join up, we don’t agree on everything,” McCain said. “But that’s a lot of fun! It’s wonderful to fool the pundits.”

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Who is Going to Pay for New Deal Deuce

October 29, 2008

The WSJ editorial staff knows.

Well, will families making less than $250,000 get a tax cut under President Obama, or not? Senator Obama has been saying this for months, but on Monday Joe Biden put the tax-cut income threshold at $150,000 in an interview with a TV station in his beloved Scranton, Pennsylvania. The Biden campaign later clarified — or at least tried to clarify — the matter by saying that anyone making between $150,000 and $250,000 wouldn’t get a tax cut but also wouldn’t pay higher taxes.

We suspect what’s going on here is more than Mr. Biden’s normal gift of gaffe. As with his admission that a President Obama would quickly be tested by our enemies, the Delaware rambler was stumbling into the truth. An Obama Administration couldn’t possibly pay for a tax cut for 95% of Americans by raising taxes on a mere 5%. Those 5% don’t make enough money, or at least they won’t after they find ways to shelter more of their income when their tax rates rise.

Just as Bill Clinton promised a “middle-class tax cut” in 1992 only to raise taxes on the middle class in 1993, Mr. Obama will quickly find that his tax-revenue math doesn’t add up. Add in the demands on Capitol Hill to spend more and to offset the Alternative Minimum Tax, and our bet is that even $150,000 would soon prove to be a moving tax target. Remember when the AMT was only supposed to hit 21 millionaires? Next year, without relief, it could hit 26 million taxpayers. Tax increases always hit the middle class because that’s where the money is.

If the new new deal and the second bill of rights comes to pass, we can all expect our taxes raised. There is no way to ensure that everyone has an income, everyone has health care, everyone has a house and that all businesses are regulated without a lot of money being poured into the system.  Imagine something like 10 Iraq wars with no end in sight.

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Rich is no longer 250,000, but now 150,000

October 28, 2008

So says Joe the hair plugger:

So, if you now make 150,000 dollars, that is the threshold for your taxes to go up.  Perhaps this is another example of Latent Patriot Theory. Joe Biden has gotten a chance to get to know Obama and he is trying to save us.

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Obama’s Economic Fairy Tale

October 14, 2008

James Carter and James Miller III in the WaTimes on Obama’s naivette or dishonesty when it comes to his economic plan:

— Magic Fact No. 1: Senator Obama will cut income taxes “for 95 percent of working families, 95 percent.”

It would be truly magical to be able to cut income taxes on 95 percent of working families when only 68 percent of tax filers actually pay the federal income tax. According to the Internal Revenue Service, of the 136 million income tax returns filed in 2006, 43 million returns reported positive adjusted gross income but had no income tax liability because of assorted deductions, exemptions and tax credits.

So how do you give a tax cut to someone who doesn’t pay income taxes? Mr. Obama proposes a massive program of “refundable tax credits.” Those on the receiving end would simply get a check from the federal government. In other words, they would pay a “negative tax.”

By wrapping a thoroughly liberal position – larger welfare benefits – in the mantle of tax cuts, Mr. Obama has very nearly managed to neutralize one of the defining issues of this presidential campaign. If that sleight of hand isn’t magic, we don’t know what is.

— Magic Fact No. 2: Mr. Obama pays “for every dime” of his proposals.

According to the nonpartisan National Taxpayers Union Foundation, Mr. Obama has offered 73 proposals that would collectively increase federal spending $365.6 billion annually. That’s literally a $1 billion-a-day spending increase. And, unfortunately, that figure doesn’t include the cost of Mr. Obama’s 88 other spending proposals for which no reliable cost estimates exist.

How does Mr. Obama propose to pay for these new and expanded spending programs? He begins by squeezing defense spending. He would then repeal “the Bush tax cuts for the wealthiest Americans.” (Never mind that the Bush tax cuts are already scheduled to expire and that the revenue is already included in the government’s budget forecasts.) Finally, he would “close corporate loopholes, [and] stop providing tax cuts to corporations that are shipping jobs overseas.”

These steps would not come close to paying for the senator’s spending proposals. Assuming they offset $100 billion of new spending, paying for the other $265.6 billion (still ignoring the cost of Mr. Obama’s other 88 programs) would require an across-the-board income tax increase of 19 percent. And, of course, this figure does not reflect the tax increase that would be necessary to pay for Mr. Obama’s “tax cuts.”

The IRS reported earlier this year that the top-earning 5 percent of taxpayers shouldered 60 percent of the federal income tax burden in 2006. If Mr. Obama insists upon having a tiny fraction of Americans shoulder the cost of his spending and tax proposals, the tax increase on those taxpayers would have to be huge – far larger than the 19 percent tax increase described above. This would slow investment, employment and economic growth – and, yes, total governmental receipts.

Sen. Hillary Clinton once threatened, “We’re going to take things away from you on behalf of the common good.” Perhaps she would have been Mr. Obama’s ideal running mate after all.

— Magic Fact No. 3: Economists overwhelming favor Mr. Obama’s economic policies.

The Obama campaign likes to say it has the support of professional economists. Yet, that “fact” is based on two, methodologically flawed polls circulating the Internet. True enough, majorities of those surveyed said they favor Mr. Obama’s economic policies. What else would you expect from a poll where Democrat responders outnumbered Republicans by nearly 3-to-1? Only 17 percent of the surveyed economists were Republican. In the second poll, Democrats outnumbered Republicans nearly 5-to-1. Only 10 percent of the respondents were Republican.

Meanwhile, more than 500 economists from across the country, including five Nobel Laureates, have signed a statement supporting Sen. John McCain’s economic plan. (For the text of the statement and a complete list of the signatories, see www.economistsformccain.com.)

Get ready for Jimmy Carter’s second term.