Obama’s Tax Tsunami & the State of the Union


President Obama gave his tax the rich solution for the economy during his speech today. He blamed Bush and the Republicans in the House for all the problems he is now facing. He claimed that many wealthy patriotic Americans agree with him about paying higher taxes. [If you don’t want to give all your money to the government to waste, you are not patriotic.]

Nothing is his fault.

He said he has cut taxes for small business owners 18 times and has just been great for them overall. He said 97% of small businesses fall under the $250,000 threshold. [This is patently untrue as he presented it, Obama’s “tax cuts” have almost all involved tax credits and other loopholes, not reductions in rates, which he is increasing at an historic pace. In addition, half of small businesses will be affected not 3%. Check out Forbes for the skinny on this.]

Obama will continue the Bush tax cuts for only one year unless the rich are taxed more, so presumably the cuts will disappear for everyone after his election when he is “more flexible.” The certainty the economy needs is for these cuts to be extended for everyone for a good length of time.

A couple making $250,000 in New York are certainly not rich.

Taxpayers making over $250,000 pay 44% of the taxes. Obama announced that he would extend the Bush tax cuts (Clinton tax increases) for millionaires making under $250,000, that would be couples making $250,000. I know, millionaires usually make a million dollars a year, but this is Obama math.

Since many of these people are small business owners (this is their business income, not their personal income), it will decrease job growth and reduce tax receipts.

The AP has reported that households making $1 million pay 29% of the taxes while households making between $50,000 and $75,000 pay 15%. A whopping 47% pay NO federal tax. So who is not paying their fair share?

Taxmageddon is coming –

Summary via Yid with Lid

The Obama Tax Tsunami, not counting Biden’s call for a global tax, go beyond salary, take a look and tell me this is fair –

  • Deceased with a million dollars in assets will pay 55% in taxes after they die
  • Capital gains (savers) will go from 15% to 23.8%
  • Obamacare has added 20 new/higher taxes
  • Medicare payroll tax hike from 2.9% for people making $200,000, $250,000 for couples, go to 3.8%
  • Special needs kids tax – a cap of $25000 on FSA’s will affect parents of special needs children who use FSA’s to pay for their children’s costly education.
  • Medical Device tax – A new 2.3% tax on every conceivable medical device. Expect the 6,000 plants they have to move outside the country.
  • Medical Itemized Deductions – employs a threshold of 10% but excludes 65+ for three years only.
  • The AMT will include over 31 million families up from 4 million.
  • Research and experimentation tax credits are gone along with many other businesses tax credits. It’s a real job killer.
  • Tuition and fees deductions are gone and student loan interest deduction will be disallowed for hundreds of thousands.
  • There are many others. So much for helping college students.
  • Charitable contributions from IRA’s disallowed.

The Obama administration created a dismal 80,000 jobs last month with an even more dismal 69,000 the month before. Of those 80,000 jobs, one-third are temporary jobs. To give you an idea of how bad this is, it would take 19 months just to recover from June’s numbers.

Social Security Disability increased by 85,000, more than jobs created. It has been made easy to collect with the new policy of accepting anxiety over job loss as a reason to collect. These are people who will lose their disability if they re-enter the work force and are unlikely to do so.

The work force participation rate since Obama entered office is down 6,000,000 people and Obama is adding another 800,000 illegals to that number.

The numbers of illegals are undoubtedly higher, in part, due to the loose practice now established by this administration. They are being rushed through the system and meeting the requirements are not being considered.

Social Security Disability, which was the most solvent, is speeding towards insolvency and will run out of money by 2017, sooner if the claims keep increasing.

SSI, welfare, which is part of the social security system, does not require a work history but has a salary minimum – they should demand people try to find a job but they don’t.

CNS News reported that “8,733,461 workers took federal disability insurance payments in June 2012, according to the Social Security Administration. That was up from 8,707,185 in May…It exceeds the entire population of New York City…When President Obama was inaugurated 1 in 19 people collected to workers. In May of this year, it was 1 for every 16 workers. Payments average $1,111.42 per person.

The disability rolls are up 23% since 2007 and is nearing collapse according to Businessweek.

There has been no leadership from Barack Obama on this issue. He will push the elderly and handicapped off the cliff. Screening of applicants is poor and incentives to get them back to work are almost non-existant. In 2016, recipients of Social Security Disability will face a 21% decrease in payments. [Businessweek]

The total employed jumped by 128,000 but the labor force increased by a larger 189,000, keeping the unemployment rate the same. Job growth is not keeping up with a growing population, and that is with millions leaving the work force.

We need 100,000 jobs a month to keep up with population growth and 150,000-200,000 would lower the unemployment rate according to Bernanke.

The jobless rate has held at over 8% since February 2009 despite the promises made when the Stimulus was passed.

President Obama only counts the last 28 months when he talks about his financial successes even though he has been in office for 42 months. If counted since his term began, the economy gained 3.8 million jobs and 8.8 million jobs were lost.

Fox News reports that every state that elected a Republican Governor saw their unemployment rate drop –

  • Kansas – 6.9% to 6.1% = a decline of 0.8%
  • Maine – 8.0% to 7.4% = a decline of 0.6%
  • Michigan – 10.9% to 8.5% = a decline of 2.4%
  • New Mexico – 7.7% to 6.7% = a decline of 1.0%
  • Oklahoma – 6.2% to 4.8% = a decline of 1.4%
  • Pennsylvania – 8.0% to 7.4% = a decline of 0.6%
  • Tennessee – 9.5% to 7.9% = a decline of 1.6%
  • Wisconsin – 7.7% to 6.8% = a decline of 0.9%
  • Wyoming – 6.3% to 5.2% = a decline of 1.1%
  • Alabama – 9.3% to 7.4% = a decline of 1.9%
  • Georgia – 10.1% to 8.9% = a decline of 1.2%
  • South Carolina – 10.6% to 9.1% = a decline of 1.5%
  • South Dakota – 5.0% to 4.3% = a decline of 0.7%
  • Florida – 10.9% to 8.6% = a decline of 2.3%
  • Nevada – 13.8% to 11.6% = a decline of 2.2%
  • Iowa – 6.1% to 5.1% = a decline of 1.0%
  • Ohio – 9.0% to 7.3% = a decline of 1.7%

On the other hand, the unemployment rate in states that elected Democrats in 2010 dropped, on average, as much as the national rate decline and, in some states such as New York, the unemployment rate has risen since January of 2011.