Thread: BARACK OBAMA’S NEW MIDDLE CLASS TAX HIKE

BARACK OBAMA’S NEW MIDDLE CLASS TAX HIKE



By: John Hayward
4/10/2013 09:03 AM

The UK Daily Mail is hilariously brutal to Barack Obama’s long-delayed 2014 budget proposal, summing it up as a mixture of “bad math, phantom revenues, imagined spending cuts, and a middle-class tax hike.” The White House is really phoning this one in. They’re recycling the knee-slapper about how the new spending plans of the man who already added 60 trillion dimes to the national debt are “fully paid for, so they do not add a single dime to the deficit.” They’re even claiming ObamaCare will save money somehow.

You’ll see a lot more of this “ObamaCare savings” voodoo in the future. The program’s costs have soared far beyond all initial estimates, even as it fails to meet a single promise that was made. But any time a new estimate of costs falls below the worst-case total-meltdown scenario from the previous year, it will be portrayed as a wonderful “savings.” In other words, if ObamaCare is $2 trillion over cost, but next year’s estimates say it will only be $1.6 trillion over cost, it will be touted as $400 billion in nearly miraculous “savings.”

Beneath all the smoke and mirrors, Obama’s new budget proposal could at least be described as a bit more…. restrained than the ludicrous fantasies he usually tosses at Congress between star-studded White House parties. (Oh, the horrors of austerity!) An extremely charitable reading of the new budget might conclude that it only raises spending a little. ”So where are the net spending cuts?” House Speaker John Boehner’s press secretary, Brendan Buck, snorted. ”I guess they don’t exist. The President’s budget will – at best – be flat on spending, or potentially even be a net spending increase. Any deficit reduction will come exclusively from tax hikes.”

Ah, the tax hikes. Those are the glittering centerpiece of Obama’s budget. The stuff about government “spending cuts” is an accounting fiction, but you can take it to the bank that private American citizens will be paying more in taxes. The Evil Rich get soaked, of course, but there’s a huge new middle-class tax increase built into Obama’s proposal to switch to the “chained CPI” method of calculating inflation.

The Daily Mail explains:

The chained CPI signals a shift in how the federal government will calculate everything from Social Security payouts and congressional pensions to college students’ Pell Grants and veterans’ benefits. Anything tied to cost-of-living increases would be subject to a new formula.

The White House’s budget blueprint suggests that these programs would see $230 billion in costs savings over 10 years. The Congressional Budget Office puts the number at $216 billion.
The CBO also notes, however – and the White House omits – that a switch to the chained CPI will also raise more than $124 billion in new tax revenues.

The money will come pouring in because the consumer price index also controls income tax brackets, tax filers’ standard deductions, nontaxable contribution limits for 401(k) retirement plans, and more.

So millions of individual Americans will see themselves moved involuntarily to higher tax brackets, and middle-class taxpayers in particular will lose some of the tax credits and deductions that they count on.

So Obama’s promise never to raise taxes on the Sainted Middle Class – already broken in numerous ways, including ObamaCare – goes completely up in smoke, and in exchange he’ll only spend a few billion more next year, instead of the hundreds of billions he really wanted. He’s even got another $50 billion in “infrastructure stimulus” packed in there. That’ll eat up over a third of the revenue from your middle-class tax hike, all by itself.

There’s also a tobacco tax increases in the President’s proposal, ostensibly to fund “a new program of universally available preschool” on top of the billions already poured into the educationally useless Head Start program. The middle class included a fair number of tobacco consumers, doesn’t it? There is no obvious logical connection between tobacco and preschool – it’s just a tax on something unpopular, to pay for a lollipop that voters will reflexively approve of, because nobody wants to be against more spending For the Children. It’s just more social micro-engineering – with a big chunk of the money sluiced away into bureaucratic overhead, of course.

There are reasonable cases to be made for chained CPI and tax simplification through the elimination of deductions, but only in the context of reducing the total tax burden on Americans of every income level. Eliminating deductions in concert with reduced tax rates and fewer tax credit subsidies – welfare dispensed through the tax code – is a great idea. Wiping out deductions without the other reforms is a cash grab by greedy socialists. If chained CPI makes more sense to measure inflation, as many economists believe, the entire system should be overhauled to use it. As the Daily Mail surmises, plugging in chained CPI without changing anything else is another cash grab.
As for Social Security, the old system is rotted and teetering on the verge of collapse. It should be privatized – that should have been done long ago – rather than forcing retirees to watch helplessly as the government tinkers with their benefits to keep its balance sheet from bursting into flames for a few more years. But you’ll find no such bold ideas in President Obama’s latest budget proposal. His “big ideas” involve finding new ways to squeeze money out of the private sector, without any pretense of reducing either the national debt or the size of government.

http://www.humanevents.com/2013/04/1...lass-tax-hike/

Obama says new taxes aren’t negotiable

April 10, 2013 | 11:55 am

President Obama on Wednesday unveiled his $3.77 trillion budget for next fiscal year, calling for higher taxes in exchange for cost reductions in Social Security and Medicare, setting the stage for another fight with Congress over the nation’s fiscal priorities.

Within the president’s budget — which would produce a $744 billion deficit in 2014 — are roughly $800 billion in new taxes, including a higher levy on tobacco products. Obama’s proposal would raise taxes on cigarettes by 94 cents per pack, up to $1.95.

From the Rose Garden on Wednesday, the president said such taxes were nonnegotiable if Republicans wanted the White House and Democrats to agree to cut entitlement programs.

“If anyone thinks I’ll finish the job of deficit reduction on the backs of middle class families or through spending cuts alone that actually hurt our economy short term, they should think again,” the president said. “When it comes to deficit reduction, I’ve already met Republicans more than half way.”

Republicans and Democrats alike are already dismissing the budget plan, leaving Obama on a lonely island in which neither side likes his blueprint.

Obama is taking heat from Republicans for the proposed tax increases and being battered by the left for recommending reductions in spending on Social Security. Obama is calling for a new inflation tool for Social Security, known as chained consumer price index, but critics say the change is more cosmetic than a major reduction in spending on the entitlement program.

Under the president’s fiscal blueprint, cost-of-living calculations would be lowered for Social Security payments as part of a deal to close tax loopholes and deductions for certain corporations and wealthy individuals.

Obama is proposing $1.8 trillion in savings over the next decade, but because his plan would replace $1.2 trillion in across-the-board spending cuts that went into effect in March, it would reduce borrowing by roughly $600 billion. Republicans say such an offer proves Obama isn’t serious about stemming a soaring national debt.

“Republicans are offering a different path,” Brendan Buck, a spokesman for House Speaker John Boehner said. “Our plan to balance the budget will end the waste of taxpayer dollars and foster a healthier economy, delivering real solutions to help improve people’s lives.”

Obama’s budget calls for $170 billion more in spending than outlined by the Congressional Budget Office. And the $744 billion deficit would represent 4.4 percent of GDP.

Presenting his budget more than two months late, Obama is recommending the higher tobacco taxes to pay for expanded preschool. The budget also includes the so-called Buffett Rule, which sets a minimum 30 percent tax rate for households earning more than $1 million a year.

In essence, the budget is a repackaging of Obama’s final offer to Boehner during negotiations over avoiding the so-called fiscal cliff at the start of the year. Under that deal, income taxes were increased for households earning more than $450,000 annually — a return to the Clinton-era rates.

In previewing the budget, one senior administration official said, “We don’t view this budget as a starting point in the negotiations. This is our sticking point.”

As outlined in his State of the Union Address, Obama’s budget calls for a national minimum wage of $9 an hour and another $50 billion in stimulus spending for infrastructure projects.

http://washingtonexaminer.com/article/2526775

Obama's Budget a Joke: British Pub Slams 'Bad Math, Phantom Revenues, Imaginary Spending Cuts & Middle-Class Tax Hike'



http://www.youtube.com/watch?feature...&v=Pvz_W735_a4

Kyle Becker
On April 10, 2013
https://twitter.com/kylenbecker

President Obama is following up on his flawless performance with the fiscal year 2013 budget, which garnered exactly zero votes in all of Congress, with a 2014 budget proposal that is a real stinker.

The president’s howler of a spending plan was slammed — not by the rabid, right-wing conservative press, which is presumably out to get our charmer-in-chief no matter what he does — but by the British Daily Mail.

Here’s the bullet points:

• White House promises $1.8 trillion in deficit reduction, although similar previous claims have been debunked
• New method of measuring cost-of-living increases will lower benefit payouts and push middle-class earners into higher tax brackets
• Speaker Boehner’s spokesperson: ‘Any deficit reduction will come exclusively from tax hikes’
• Administration’s formula depends on cost savings from Obamacare, which may be more costly to implement than previously thought

In a lengthy piece, the foreign publication explains that while the White House is claiming $4.3 trillion in budget cuts over the decade, trillions of those cuts don’t appear to be real. For example, the White House has already claimed $2.5 trillion in spending cuts the last two years, but because of the way some of those cuts were imagined, only $1.4 trillion over the decade was actually cut. The kicker? That number doesn’t actually cut overall government spending, it just slows the rate of spending increases.

In addition, tax increases on the middle class will go up between $600 billion and $800 billion over that period, under the new budget proposal. Thus, much of the stated deficit reduction will come through tax increases, further burdening the private sector’s ability to create jobs.

About $400 billion in planned “savings” are attributed to Obamacare, which is becoming a running gag in-and-of-itself. Even Kathleen Sebelius, once the champion of the gargantuan bureaucratic expansion, is becoming critical of the healthcare program. Claiming that the program will cut costs at this point is laughable, indeed; whether the crypto-rationing board gets into high gear or not.

As the Daily Mail article points out, the U.S. is standing at nearly $17 trillion in debt, and this budget does little to change that. In case people have forgotten, we owe trillions to China, Japan and other nations, and borrowing comes with this little thing called “interest.” America will spend trillions repaying that in the future, meanwhile trying to support retiring baby boomers.

The rate of entitlement spending is set to explode at the end of this decade and does it look like the president is concerned at all? No, he’s out jamming with soul music stars, while proclaiming that an $85 billion cut to the annual budget would be the end of America as we know it.

The president’s late budget, just like past budgets, is a bad joke and only a tributary nod to fiscal planning that is dead-on-arrival in the Congress.

http://www.ijreview.com/2013/04/4605...lass-tax-hike/