They are lying to you
We heard Tuesday night that Obama will pay for his $1.2 trillion socialist agenda by eliminating "tax breaks for the wealthiest two percent of Americans," and by not increasing taxes on households earning less than $250,000 by "one single dime."
This means that Obama considers you rich if your income is $250,000 or greater, and that you will be punished for your success. It also means that we as a nation are in very serious trouble, because there are tens of millions of Americans who actually believe in his class envy propaganda.
So who earns $250,000?
The two key segments that propel our economy, that form the bedrock on which our prosperity is built, are the American Middle Class and small businesses. They have just been targeted for punishment. Here are the Commerce Department numbers:
- 64% of job providers are small businesses;
- Small businesses employ more than 70% of all people with jobs who pay income taxes; and
- Small businesses are creating 80% of all of our economy's new jobs.
The Middle Class and small businesses aren't rich, aren't wealthy, and they provide most of our nation's jobs. It is also important to note that many of these businesses report their incomes on personal tax returns.
But what about the wealthy?
IRS income tax data for 2006 (none available for 2007) show taxes garnered on the salaries, dividends, and capital gains of those making more than $200,000 (IRS has no breakdown for $250,000). Here are the IRS numbers:
- Approximately 3.8 million tax filers, or only 7% of all returns, had adjusted gross incomes above $200,000;
- This 7% paid $522 billion in income taxes -- 62% of all federal individual income receipts; and
- The richest 1% -- 1.65 million tax filers making above $388,806 -- paid $408 billion, or 39.9% of all income tax revenues.
Even if Obama confiscates all taxable income over $500,000, he can only raise $1.3 trillion in revenue, not nearly enough revenue to fund Obama's planned 10-year socialist makeover of America.
That total confiscation of $1.3 trillion is less than half the 2006 federal budget of $2.7 trillion, and only a fraction of the $4 trillion the Democrat Congress is going to spend in 2010.
And remember, he can confiscate it all only once, because the cash cow will be milked dry.
Obama fleeces the middle class
But don't take my word for it -- here's the Drive-by Media. According to ABC News' Senior White House Correspondent Jake Tapper, Obama's tax increases aren't just on the wealthy.
New tax confiscation from the Middle Class:
- $338 billion -- Bush tax cuts expire;
- $179 billion -- eliminate itemized deduction; and
- $118 billion -- capital gains tax hike.
New tax confiscation from businesses (64% small businesses):
- $17 billion -- Reinstate Superfund taxes;
- $24 billion -- tax carried-interest as income;
- $5 billion -- codify "economic substance doctrine";
- $61 billion -- repeal LIFO;
- $210 billion -- international enforcement, reform deferral, other reform;
- $4 billion -- information reporting for rental payments;
- $5.3 billion -- excise tax on Gulf of Mexico oil and gas;
- $3.4 billion -- repeal expensing of tangible drilling costs;
- $62 million -- repeal deduction for tertiary injectants;
- $49 million -- repeal passive loss exception for working interests in oil and natural gas properties;
- $13 billion -- repeal manufacturing tax deduction for oil and natural gas companies;
- $1 billion -- increase to 7 years geological and geophysical amortization period for independent producers; and
- $882 million -- eliminate advanced earned income tax credit.
Bottom line
There is no "tax cut" for the bottom 50% of Americans who only pay 3.5% of the nation's income taxes -- it is a small payment transfer, or welfare because most of that 50% pay no taxes at all. The top 50%, who pay 96.5% of all income taxes, will certainly not see any "tax cut" either.
Every tax increase ensures that America loses more jobs. Every tax increase expands the power of government. Every tax increase is a loss of freedom. And every tax increase during a time of a shrinking economy will strangle business expansion, job creation, and consumer spending.
Tax increases will acerbate the problem, and maybe that is Obama's plan -- to create so much economic strife that Americans will forego their freedoms, abandon the Constitution, and beg for salvation from Big Government.