Republicans in Congress screwed up big time in voting for President Barack Obama’s tax hike on Americans. All in the name of letting Obama “have his way” in sticking it to the rich, the deal to avert the country’s cliff dive doesn’t do anything but stall the country’s fall for another two months. Republicans, yes, REPUBLICANS, voted for the first time since 1991 to raise taxes on Americans, a lot of taxes and postponed dealing with the $1.2 trillion sequester, cuts to government spending, until February 2013.
There are no government cuts in this bill, making it nothing more than a license for Obama to keep spending on programs we can’t afford. That’s why our debt is $16.4 trillion and counting. Our yearly deficits are running $1 trillion. Entitlement spending for the big three -- Social Security, Medicare and Medicaid -- accounts for 50 percent of government spending. Meanwhile, the Congressional Budget Office concluded entitlement spending in the next 75 years and other mandatory spending will be responsible for virtually 100 percent of our deficits. In other words, spending on government programs is bankrupting the country yet the president won’t stop, shamming Republicans into feeding his addiction.
The clifftastrophe bill, as I call it, brokered by Senate Minority Leader Mitch McConnell with Vice President Joe Biden, didn’t just kick the can down the road but into oblivion. It passed first in the Senate then House Speaker John Boehner, who said all year he refused to raise taxes on the American people, couldn’t wait along with 84 other Republicans in the House to join 172 Democrats and do just that.
The tax increases targeted at higher earners is estimated to raise a paltry $600 billion over ten years, which amounts to $60 billion a year. This pays about 5 percent toward the yearly $1 trillion deficit’s Obama’s has been running since he became president. Obama’s tax assault on the “rich” amounts to little more than spitting in the deficit wind.
Here’s a menu of some of the tax hikes born solely by one group of Americans. Individuals earning $400,000 and couples earning $450,000, their tax rate will increase from 35% percent to 39.6 percent and these same people will have the good fortune of paying a higher capital gains and dividend tax up from 15 percent to 20 percent. The personal exemption tax of $3,800 in 2012 will be ELIMINATED for those making $300,000 or more.
The pile on continues with the death tax rising from 35 percent to 40 percent on estates above $5 million. Obama and Democrats think Americans really shouldn’t be able to keep a fortune they amassed through a lifetime of HARD WORK in their family but rather should leave it to federal government to waste and redistribute to its heart’s content.
There’s more! Higher earners will be hit with a 3.8 percent Obamacare tax on investment income and a 0.9 percent additional Medicare tax (added to current 1.45 percent Medicare tax for employees) to pay for the $2 trillion Obamacare entitlement travesty. As a friend told me, “Why bother to even work hard anymore. I’m thinking about dumping some clients so I can make less money and pay less in taxes.” That’s just it. As the Wall Street Journal noted when tax rates increase government revenue goes down because “the rich change their behavior to avoid the higher rates.” Like Mitt Romney told Obama during one presidential debate, “you can’t tax your way out of this mess” but the president SURE can spend us into a bigger one.
But the real joke in this “cliff aversion” monstrosity is it’s larded with spending increases for Obama’s favorite things: $248 million to Hollywood producers, $12.1 billion to wind energy; and $30 billion in extending the jobless benefits for a year. Obama can’t preach enough about “shared sacrifice” in this country but where is the president’s sacrifice? We see from this taxation picture, who’s sacrificing and who's spending!
Republicans should expect Democrats to run against this GOP stupidity in the 2014 mid-term elections with slogans like: “You can’t trust a thing Republicans say!” Obama is already laughing out loud, saying Republicans have reversed course on their Holy Grail pledge not to raise taxes. See what happened to George H. W. Bush when he flouted the pledge. He lost his re-election. Prior to this “deal,” Boehner proposed a Plan B of raising taxes on workers making $1 million or more, which failed to get enough Republican votes in the House but then Republicans in the House and Senate turned around and voted for a tax hike hitting more Americans.
Congressional Republicans in Congress look even dumber and particularly “emasculated” in their collective belief that they have Obama over a barrel when it comes to the debt ceiling. Republicans believe Obama will be forced to accept spending cuts in two months in exchange for Congress increasing our borrowing limit so he can spend more. When pigs fly!
Obama has no intention of reforming the tax code or cutting government spending. In two months, Obama will shame Republicans once again into raising the debt ceiling so he can spend more because Congressional Republicans seem to have lost the ability to defend freedom and preserve American exceptionalism.
As Virginia lawyer Bernard McNamee wrote, Ronald Regan’s “tax cuts spurred economic growth, which actually increased tax revenue to the government” but “instead of cutting government (or limiting its growth), the new tax revenue was used to fund more government.” Republicans lost control of the fiscal cliff debate because they refuse to sell the merits of conservatism to the American people. “Voters need to understand that the battle is not about tax rates, it is about a government so big that it threatens their freedom,” McNamee wrote and I would add our national security and economic fortitude.
The Republican Party needs to start defending conservatism and stop apologizing for it. America has a spending problem and until we face this reality, the country will continue "slip sliding away" into economic weakness while the GOP fades into oblivion.
In Honor of His 103rd Birthday, Here Are The 20 Best Quotes From The Late, Great Milton Friedman | John Hawkins