Read My Lips: New Taxes

Campaign promises of tax cuts for 95% of Americans, tax cuts for small businesses, and lower income taxes for the average working American.  Sound like a conservative candidate?  Think again.  That was our President.

“I can make a firm pledge, under my plan; no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.” – President Obama

It seems impossible that someone who ran on promises of tax cuts and middle class relief can completely reverse his agenda and have no one question it, but that is exactly the case.  Although Reuters initially chose to report the story, the article detailing the new tax increases was removed from the internet within a matter of hours.  The President’s budget, $3.8 trillion for the upcoming year, raises taxes by $2 trillion over the next 10 years for businesses and upper-income families.

  In an attempt to make it appear as though he is making a bipartisan effort, President Obama is cutting spending in many areas of the budget.  Despite these spending cuts and bringing in trillions in new tax revenue, the country still faces 8.5 trillion in new debt over the next 10 years.  

President Obama will be increasing income taxes by nearly 4% on families with a combined income of over $250,000.  At first glance, an additional 4% in taxes does not seem very substantial and to some it may not even seem unfair.  These people are making a quarter of a million dollars per year, so they can spare a few extra bucks to help out the rest of us, right?  When you think of this increase in terms of actual cash, it starts to look a bit more staggering.  For a household making more than $250,000, this increase will bring the government’s total share of earnings to 39.6% or almost $100,000 of that household’s income.  Ask yourselves, what is the point of striving to improve one’s economic standing when the money that has been earned through hard work will be taken away in ever-increasing taxes?

In addition to the fact that “spreading the wealth” is unfair, it is also ineffective.  Throughout history, the only method that has been proven effective at bringing an economy out of a recession has been large-scale tax cuts across the board.  Calvin Coolidge used the method to bring about the Roaring 20’s, John F. Kennedy cut taxes to create one of our last balanced budgets and huge economic expansion, and Ronald Reagan cured one of the worst recessions since the Great Depression with a tax plan much like Kennedy’s, creating one of our nation’s strongest periods of economic growth.  

Following the events of September 11th, President Bush used the same principles to create the lowest unemployment for one of the longest periods of time.  It’s simple really; if we cut taxes, people have more spending money, if they have more spending money, they can put it back into the economy, when the economy starts to grow again unemployment starts to drop, when unemployment drops people have jobs and therefore more money to invest in the economy.  Are you seeing a trend?  It’s a beautiful, effective, endless circle of prosperity.  

With the current path that Obama has chosen, we have only one direction to go: down.  People seem to be all for raising taxes, as long as it does not affect them.  What most people do not seem to understand is that no matter whom or what is taxed, it ultimately does affect them.  When businesses at any level are taxed, prices for that business’ goods and or services will go up to counter the taxes.  If taxes reach a certain point, businesses have to start cutting back, which generally means laying off employees.  Those employees, who are no longer making a paycheck, do not have extra money to put into the economy which puts further stress on the businesses.  

Even though President Obama is not increasing taxes directly on the middle class, he is raising taxes that will eventually create a major, albeit indirect, negative impact on the middle class.  This is how we got into the predicament we are in today.  The only way that we are going to get ourselves out of this mess is to use that old, faithful, tried and true method that sounds too simple to be possible: cut taxes.