Obamanomics: Hidden Regressive Taxes
[Posted by Karl]
Pres. Obama looked silly trying to deny that forcing people to buy health insurance is not a tax. Even the Associated Press was not buying it. Pres. Obama was willing to look silly on network TV because taxes are not popular — but the underlying issue is much bigger.
For example, Treasury Department officials think cap-and-trade legislation would cost taxpayers hundreds of billion in taxes, according to internal documents obtained by the Competitive Enterprise Institute through a Freedom of Information Act request. At the upper end of the administration’s estimates, the cost per American household would be an extra $1,761 a year. Indeed, Obama pal Warren Buffett had already criticized it:
Anything you put in that effectively taxes carbon emissions is — somebody’s going to bear the brunt of it. In the case of a regulated utility, the utility customers are going to pay for it. I mean, it’s going to become, in effect, a tax which we have decided is needed because the market system doesn’t really appropriately penalize something that hurts the future but doesn’t really hurt us tomorrow morning. But that tax is probably going to be pretty regressive.
Of course, Pres. Obama knows this, too. In January 2008, he openly admitted that his cap-and-trade proposal would make energy prices “skyrocket.”
Cap-and-trade is just one of several business taxes Obama has floated. However, the affected companies will not pay most of these taxes. Research shows that 70 to 92 cents of a dollar of business taxes comes out of employees’ pay.
The appeal of stealth taxation is why the Obama administration and other Democrats cannot bear to rule out a value-added tax, assessed on producers, wholesalers and retailers, despite the fact that this tax would also be hugely regressive.
Willie Sutton used to explain that he robbed banks “because that’s where the money is.” Liberals will always come around to taxing the middle-class because there are just not enough of “the rich” to finance their social engineering. But they cannot be honest about it, so they want to outsource tax collection for the nanny state to the business community (just as they have with payroll taxes). If that means Pres. Obama has to look foolish on network TV, it is a small price for them… and potentially a much larger one for the rest of us.
–Karl
As I oppose progressive taxation (concept and implementation), I cringe when someone argues against a ‘regressive’ tax as that implies all would be fine if only those taxes were made more progressive.
The argument against these taxes is not that they take a bigger chunk out of a middle income paycheck than out of a higher income paycheck but rather that (1) they are taxes everybody is going to have to pay, and (2) Obama is not being honest with the public in trying to hide these taxes.
Thus, I would re-title the post: “Obamanomics: Hidden Taxes on the Middle Class“.
steve sturm (369bc6) — 9/22/2009 @ 7:02 amResearch shows that 70 to 92 cents of a dollar of business taxes comes out of employees’ pay
Any link for the research?
steve (3d3a72) — 9/22/2009 @ 7:06 amIt’s not the original research but here is a link
and here is another
steve sturm (369bc6) — 9/22/2009 @ 7:14 amNot to pick nits, but Mr. Sutton denied the quote. He ascribed it to an over-eager reporter looking for a news hook.
Probably the L. A. TImes…
Bob Leibowitz (e88839) — 9/22/2009 @ 7:19 amStrangely, I believe he could get more popular support for these regressive/punitive taxes if they would just be f*cking honest about them. As is, people know that they are getting lied to, and it makes them wonder what else they are being lied to about.
JD (53eae9) — 9/22/2009 @ 7:49 amWhen you combine Barack Obama’s tax the peasants approach with a state like California that feels the same way, you end up with a trashy trashy state sinking into a quagmire born of its own waste but what has a plethora of stem cells.
Kooky.
happyfeet (6b707a) — 9/22/2009 @ 7:51 amThe chickens, as a Chicago philosopher once remarked, are coming home to roost.
The only way to get a sustainable economy’s energy needs with cap and trade is nuclear power. Obama’s base would go nuts if that became a policy.
Clinton has admitted that Spain’s green energy program costs jobs, not creates them (pdf).
General McChrystal will resign if Obama doesn’t give him the troops for Afghanistan.
Social Security will start running a deficit next year, not 2019 like the Democrats have been saying.
Inflation will start rising next year unless the economy collapses again, which it might if the stock market swoons.
Not only hasn’t Obama rescued the economy, everything he has touched is turning to s**t. The taxes are the least of his problems but they are certainly part of the trend. He is simply not up to the job and it is going to be glaringly evident a year from now as the Democrats go into the elections.
The only thing that can save them are the Republicans. They are capable of it.
Mike K (addb13) — 9/22/2009 @ 7:55 amJD: what President ever got support for raising taxes from the people having to pay the tax? While there’s never a lot of support for raising taxes at all, the only support comes from people convinced they’re not going to be the ones getting taxed.
Thus, politically, the last thing Obama can afford to do is to be honest and tell everybody their taxes are going up… especially when he wants to raise taxes to pay for relatively unpopular programs as cap and trade, universal health care and so on. He needs to keep lying in hopes that he can fool enough people long enough.
steve sturm (369bc6) — 9/22/2009 @ 7:57 amSteve – I think that being dishonest even hampers their efforts more. I do not disagree with your assessment, but at least in theory, for cap&destroy, at least they could make a case that it is a collective sacrifice for a noble, if misguided goal.
JD (53eae9) — 9/22/2009 @ 8:10 amWhat do you do when your economy’s in a tailspin? It’s easy – just do the following:
– raise taxes on the entire middle class;
– raise regressive taxes on behavior you don’t approve of; like smoking, drinking soft drinks (eeek!), and booze;
– employ a massive gov’t takeover of 1/6 of the economy;
– use taxpayer monies to subsidize failing businesses in the service of union supporters;
– experiment with a massive transfer of wealth from your economy to the world’s poorest ones (Cap’n Crunch).
Milton Friedman is spinning in his grave.
Dmac (a93b13) — 9/22/2009 @ 8:22 am“…they could make a case that it is a collectivist sacrifice for a noble, if misguided goal.”
Fixed that for you.
Dmac (a93b13) — 9/22/2009 @ 8:24 amDmac – Good point. So we are clear, I am not advancing that idea, and were I, it would be a good sign that the end of the world is well at hand.
JD (53eae9) — 9/22/2009 @ 8:35 amComment by Dmac — 9/22/2009 @ 8:22 am
You forgot “putting ACORN and its’ allies in charge of … “.
AD - RtR/OS! (5b5739) — 9/22/2009 @ 9:45 amDemocrats have already been increasingly disincentivizing hard work and middle class values.
This is of a kind of their ridiculous upside-down economics.
SPQR (26be8b) — 9/22/2009 @ 10:05 amsteve sturm,
Your #1 point is well-taken, but the theme of the post is the degree to which Obamanomics relies on dishonesty. Given that Obama and the Democrats like to pose as progressives who only want to tax the evil rich, the regressive nature of the taxes they are backing and considering is worth noting. The point is not that progressive taxes would be better; it is that the Left is lying in its constant implication that progressive taxation can actually finance their schemes.
Karl (5dda3d) — 9/22/2009 @ 10:22 amfrom Karl:
.. to which I would add “and a whole lot of new taxes on the middle class”. It isn’t just the dishonesty. And I think you could have made your points even better by substituting ‘middle class’ for ‘regressive’.
steve sturm (369bc6) — 9/22/2009 @ 12:19 pmI remember the same cry of ‘consumers will have to pay billions!’ happening when power companies were opposed to measures aimed at reducing acid rain. I remember the same excuse for avoiding he Clean Air Act in the 60s and 70s.
Now of course, since it’s hip, they all brag about how green they are.
Corporations – a model of consistency in opposing regulation of any kind as they rake in their billions.
Republicans – schills for the aforementioned corporations.
JEA (f93993) — 9/22/2009 @ 6:20 pmJEA…a reliable shill for Leftist talking points.
AD - RtR/OS! (f05962) — 9/22/2009 @ 6:48 pmJEA, evidently you’ve missed how things work in the real world. In the real world, corporations capture the regulatory mechanism and use it to freeze out competition.
Learn real economics instead of comic book Democratic economics.
SPQR (26be8b) — 9/22/2009 @ 7:28 pmI think this thread calls for a salute to an ideological and Democrat-Party predecessor — a soul mate, if you will — to the current occupant of the White House…
Mark (411533) — 9/22/2009 @ 7:47 pmNo, no, no, Mark. It’s Republican charity you mean to highlight, not Democratic shenanigans.
You know your role, man. Let’s not get too ambitious, here.
Leviticus (30ac20) — 9/22/2009 @ 8:12 pm“… theme of the post is the degree to which Obamanomics relies on dishonesty”
I am shocked, shocked, especially when President Obama is so fond of throwing issues out there and saying:
“Let’s have an honest debate.”
I can’t recall one from him yet.
daleyrocks (718861) — 9/22/2009 @ 9:07 pmCorporations, in and of themselves, are neither evil nor good. And making a profit is the number one goal of a corporation. And self-praising advertisement is a very worthy way of getting the word out.
If you want to sell to an environmentalist, you will have to show how you’re environment-friendly. If you want to sell to a penny-counter, you will have to show value or low price. It’s the nature of the advertisement beast.
That being said, many big corporations jumped into bed with the worst of statist/fascist/socialist governments. And many others got gobbled up by those governments, because they didn’t jump into bed with them.
Some capitalists are free-market and some capitalists are not. Seeing as free-market has proven to work and statist/fascist/socialist/marxist/dictatorial governments have proven to fail (every time), I will stand up for free-market and against ObamaNation.
John Hitchcock (3fd153) — 9/22/2009 @ 9:13 pmOh, and before any leftist mentions Communist China (The Peoples’ Republic of China), do your homework and find out how Communist China’s manufacturing base has exploded first.
John Hitchcock (3fd153) — 9/22/2009 @ 9:15 pmComment by Mark — 9/22/2009 @ 7:47 pm
You can take the scoundrel* out of Hyde Park, but you can’t take Hyde Park out of the scoundrel*.
*used in place of the period “Traitor to his Class”.
AD - RtR/OS! (f05962) — 9/22/2009 @ 9:43 pmSo, I was just out looking around on the Web to see what’s going on today.
At Hotair.com, they had an interesting, well-produced, very compelling billionaire George Soros-funded video by multi-millionaire Will Ferrell, as well as several other millionaire actors, explaining why insurance companies are evil.
And, the point seemed to be that insurance companies are evil because their CEOs are multi-millionaires who are depriving regular ol’ folks health care because they’re, I don’t know, millionaires.
I also caught a brief snippet of an ABC Nightline report on Micheal Moore. As the camera followed the multi-millionaire film-maker onto a subway, the reporter presented the usual balanced reporting along the lines that Moore is sometimes criticized for the fact that, I don’t know, he’s a multi-millionaire criticizing the system that made him a multi-millionaire, but look, he’s riding a subway, just as the rest of us.
I also read multi-millionaire Arianna Huffington’s post about how wonderful multi-millionaire Micheal Moore’s new movie about how great it is that a multi-millionaire hates capitalism.
All those multi-millionaires, and just plain-old millionaires, have the right to say what they want. And, quite frankly, they’re a lot more talented and probably smarter than I am, because they’re millionaires.
I really don’t need millionaires lecturing me on what’s right or wrong about capitalism. I know that capitalism works because it allocates the wealth to provide the money necessary to produce movies or launch leftist Web-sites.
Capitalism not only provides me with a job, despite the fact that I’m not as talented or as smart as those liberal millionaires, it gives a whole lot of people to be millionaires.
If it were not for capitalism, all of the folks mentioned above wouldn’t have a shiny dime to launch their projects. Although Arianna got a good start as part of a divorce settlement from her gay husband.
Ag80 (592691) — 9/22/2009 @ 9:55 pmSorry:
Capitalism not only provides me with a job, despite the fact that I’m not as talented or as smart as those liberal millionaires, it gives a whole lot of people the chance to be millionaires.
Ag80 (592691) — 9/22/2009 @ 9:59 pmMark, another major consideration of FDR’s finances that you didn’t mention is that he was supported by his mother, who held the purse strings. He had relatively little of his own money. One theory of his relationship with Eleanor is that, after his affair with Lucy Mercer, his mother threatened to cut him off and make him get a job if he divorced Eleanor. They came to an understanding but Lucy was with him when he died.
Mike K (addb13) — 9/22/2009 @ 10:00 pmI heard that story, Mike K. I don’t know whether it’s true or nay, but it is believable.
John Hitchcock (3fd153) — 9/22/2009 @ 10:03 pmIt’s Republican charity you mean to highlight, not Democratic shenanigans
Actually, Leviticus, how about Democrat uncharitability and possible shenanigans all rolled into one?
However, if the current occupant of the White House really was truthful on his taxes, per below, then what does his having no taxable interest for an extended period of time in the context of his also generating a rather decent income say about the way he budgets in general?
Oh, no. That explains everything since November 2008, or certainly even more recently!
He had relatively little of his own money.
I guess that would explain the following…
Spectator.org:
The greatest liberal icon of the 20th Century is Franklin Delano Roosevelt. He is regarded by many on the left as the personification of charity and compassion, but FDR actually has a slim record when it comes to giving to charity.
Roosevelt had an average income of $93,000 ($1.3 million in today’s dollars) but gave away about 3 percent of his income to charity. In 1935, during the height of the Great Depression, when people really could have used it, he donated just 2 percent.
This evidence of liberal hypocrisy is damning enough, but what really amazes is how poorly these liberals do in comparison to so-called “heartless conservatives.” President Ronald Reagan, for instance, was often called heartless and callous by liberals. Unlike Roosevelt or JFK, Reagan was not a wealthy man when he became president. He had no family trust or investment portfolio to fall back on.
And yet, according to his tax returns, Reagan donated more than four times more to charity — both in terms of actual money and on a percentage basis — than Senator Ted Kennedy. And he gave more to charities with less income than FDR did. In 1985, for example, he gave away 6 percent of his income.
George W. Bush and Dick Cheney have continued this Reagan record. During the early 1990s, George W. Bush regularly gave away more than 10 percent of his income. In 2005, Vice President Dick Cheney gave away 77 percent of his income to charity. He was actually criticized by some liberal bloggers for this, who claimed he was getting too much of a tax deduction.
Mark (411533) — 9/22/2009 @ 11:08 pmThe Democrat Party is a criminal enterprise.
kazooskibum (a4dd38) — 9/23/2009 @ 4:31 amThere you go, Mark. There you go.
Leviticus (30ac20) — 9/23/2009 @ 10:18 am