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The danger behind Obama's tax policy
After a historic election, we take a moment to consider what an Obama presidency mean for the U.S. – we must wait, and how he will cope with our current financial crisis. And, according to Jim Davidson, a few the figures do not add up.
One of Obama's main campaign plank was his promise to raise taxes on the great mercy , A group initially defined as those earning more than $ 250,000 a year. This was later reduced to $ 200,000 per year, and more recently has been defined as Americans earning more than $ 150,000 per year.
Leaving aside the precipitous downward slide in the definition of "rich", he there are sufficient grounds to suspect that Obama's tax changes provide much higher, if not confiscatory taxes on America's most productive. Obama has insisted on increasing taxes as a way to use the government to change the distribution of income before taxes, which he believes is too focused productivity gains in recent years, in the hands of the richest.
He seems to believe that the "rich" are a closed caste members more or less fixed, which changes little from year to year. This figure in his concept of "fairness", which means it is perfectly fair that the burden of a small fraction of the population with most of the costs of operating the federal government. This strategy has been detailed in an article published in The New York Times about "spreading the wealth" by David Leonhardt. He wrote about Obama:
"Then pay for the cuts, at least in part, increasing taxes on the rich to the point where being slightly longer than that of Clinton. For these high-income families policy tax, the Centre for comparisons with McCain are even starker. McCain, by continuing the basic thrust of Bush's tax policies and adding a new wrinkles, would cut taxes for 0.1 percent of employees – those who make an average of 9.1 million – by another $ 190,000 a year over Bush cuts. Obama would raise taxes on 0.1 percent on average $ 800,000 per year. "It is difficult not to look at that figure and be a little stunned. It would be a huge tax increase on wealthy families. But it should also put the number in a certain context. Most increases Obama's tax on the wealthy – about $ 500,000 of that $ 800,000 – just remove the Bush tax cuts. The remaining $ 300,000 will not invest close to their earnings before income taxes in recent years. Since the mid-1990s, adjusted earnings before taxes for inflation has doubled. "
"In other words, the rich have done so well in recent decades, with rising incomes and lower tax rates, Obama's plan is far from erasing their gains. The same could be said of households making a few hundred thousands of dollars per year (which have gotten smaller raises than the very rich, but also against tax increases lower). As ambitious as the proposals Obama might be, would still leave the gap between the rich and everyone else far wider than complicate the young entrepreneur who has been making their millions for the first time would be the aging plutocrat really enjoyed the prosperity of the last quarter century since Reagan cut marginal tax rates. "
An Oct. 13 editorial in the Wall Street Journal explains the mysterious arithmetic sweeping claims tax cuts Obama income for millions of people who currently have no income tax and pay no taxes:
"For the Democrats, Obama, a tax court is not allowing you to keep more of what you earn. In their lexicon, a tax cut tens of billions of dollars in government subsidies disguised by the phrase "tax credit." Mr. Obama proposes to create or expand no fewer than seven such credits for individuals:
– A tax credit of $ 500 ($ 1,000 per couple) to "make work pay" that phases to the income of $ 75,000 for individuals and $ 150,000 per couple.
– A $ 4,000 tax credit for tuition.
"- 10% mortgage interest tax credit (also the existing mortgage interest deduction and other housing subsidies).
– Save 'A' tax credit of 50% to $ 1,000.
– An extension of tax credit on income that would allow individual workers to receive as much as $ 555 per year, more than $ 175 today, and give these workers up $ 1,110 if you pay alimony.
– A provision of care to children 50% to $ 6,000 of expenses a year.
"- Credit Car clean a maximum of $ 7,000 tax on the purchase of certain vehicles.
"Here is the screenshot policy. All except clean car credit would be "refundable," which is in Washington to talk about the fact you can receive these checks even if you are not subject to tax on income. In other words, they are an income transfer – a federal check – from taxpayers to nontaxpayers. It was once called the well-being, "or George McGovern in 1972 a campaign" demographic benefits. Obama's genius is to call cutting taxes.
"The Tax Foundation estimates that under the Obama plan 63 million Americans, or 44% of tax filers, would not any taxes on income and most of those who receive a check from the IRS each year. Heritage Foundation Center for Data Analysis estimated that by 2011, under the Obama plan, 10 million taxpayers who pay no taxes while cashing checks from the IRS.
"The total annual appropriations refundable tax credits" would rise over the next 10 years $ 647 billion to $ 1,054,000,000,000, according to the Tax Policy Center. This means that the tax credit welfare state would cost about four times the welfare cash real. By redefining such income payments as "loans tax," the Obama campaign also redefines them away as a proportion of GDP taxes. Presto, the federal tax burden looks much smaller it really is. "
After all the definitions are analyzed neglected remains one point ahead. 5% of earners in the United States, which currently pay 60.14% (2006 figures) of all taxes on income, are intended to a huge increase in federal taxes under Obama.
A concrete proposals of Obama is to increase gains capital and taxes on dividends to 25%, which significantly increases the confiscation of capital and the increasing share of "profits" reflect inflation the depreciation of the currency. In the U.S., the investor must pay tax on the difference between the selling price of an asset and the price Buying is not adjusted for inflation. Therefore, when the rate of taxation and inflation are high, a large portion of the gain capital is illusory. Any asset that is valued below the inflation rate will result in the owner losing purchasing power and having to pay taxes on illusory income. With Obama's higher tax rate (it was proposed that taxes on capital gains and dividends should be covered up to 25%) confiscation of capital would be moderate levels of inflation.
And the Great Credit Crunch implies that inflation will be much higher than recent experience.
Leaving aside whether it is moral or fair to force a small fraction of the population pay for the bulk of the total cost of government, much of which involves the total change in checks to buy voices of different groups involved, there is another question. Can it be useful for the general tax system, standing on the shoulders of a small group, like a pyramid reluctant at the time, so that any sentence that violates the prosperity promised to pay the bankruptcy of the state?
It is a matter of dollars worth asking if you have significant assets. Given the global credit crisis, which has inflated the assets of any kind, the prospect of growing prosperity of the magnitude required for an American to 20 to become "super rich" patrons of Big Government is infinitely small. There are not enough wealthy people to fulfill the role assigned to them in terms of Obama. The expected result, and taxation confiscatory, is a dramatic shortfall in revenue. Ce In turn, imply deficits and growing needs of deficit financing, which quickly marshes of the Treasury's ability to borrow.
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