The Obama Tax Tsunami is Here

Morning Bell: The Obama Tax Tsunami is Here


Posted July 22nd, 2010 at 9:23am in Entitlements with 0 comments Print This Post

The American people are already well aware of President Barack Obama’s historic expansion of government spending: his $862 billion economic stimulus that has completely failed to keep unemployment below 8% as promised; his still-expanding health care law which the Congressional Budget Office now admits will cost more than $1 trillion; and an Obama budget that increases government spending by $12,000 per household. But all that spending is just the first half of President Obama’s game plan.

The second half of Obama’s attempted transformation began last night when the Senate rejected Sen. Jim DeMint’s (R-SC) effort to end the Death Tax. This year is actually the first year since 1916 that Americans do not have to pay any federal taxes when a family member dies. But thanks to the way Congress had to pass the legislation that phased out the Death Tax in 2001, it is set to go from zero percent to 55 percent at the stroke of midnight on December 31, 2010. The Death Tax is but one of many government taxes on capital and entrepreneurship, and its reinstatement will be yet another job killer from the Obama administration. It rewards estate tax lawyers, insurance companies and big businesses at the expense of small family-owned enterprises. According to a study by the American Family Business Foundation, a full repeal of the death tax, like the one rejected by the Senate last night, would create 1.5 million jobs. Before the vote, Sen. DeMint described the tax as an “unfair, immoral double tax on property and assets that folks have already paid taxes on throughout their lives.” He added: “The Obama death tax is just the latest example of this administration’s assault on small businesses.”

Sen. DeMint is dead on. Last night’s vote to raise the Death Tax is just the beginning of the Obama administration’s historic tax hike campaign. Unless Congress acts to oppose President Obama’s agenda, everyone’s taxes on personal income, capital gains and dividends will rise. Married couples will see their taxes rise even higher, as will families with children. According to The Tax Foundation, a family of four with two earners making $85,000 a year would pay about $1,800 more in federal income taxes in 2011. Tax Foundation president Scott Hodge tells MSNBC: “I’m hard pressed to think of another moment in the history of the tax code in which we have had so many provisions expire at the same time impacting so many Americans all at once.”

For two generations after post-war reconstruction, Europe and America have pursued different economic models, and accordingly, moved in different economic directions. The American model was low tax, low spending and small government. It favored growth, income and vibrancy. The European model is high tax, high spending and big government. It favored fairness, equality and stability. It also featured unemployment rates double those of the United States, often hovering around 10 percent. Now that is no longer the case. Under Obama’s economic leadership, U.S. unemployment rates are surpassing Europe’s.

Last night’s vote was just the beginning of a larger choice the American people must make: do they want to continue down the Obama path of high taxes, high spending and high unemployment? Or do they still believe in American exceptionalism, in limited government and in a vibrant U.S. economy? Last night’s vote was a step in the wrong direction.

Quick Hits:

•While the Obama administration continues to kill thousands of jobs in the Gulf with its oil drilling ban, countries like Norway, Brazil and Canada are increasing their deep-water oil drilling.

•While the oil spill has been an economic disaster for the Gulf, like everything else in the Obama administration, it has been a boon to Washington’s economy as energy and environmental groups spent millions to shape any energy legislation inspired by the crisis.

•According to The New York Times, the TARP inspector general has called the Obama administration’s mortgage modification program “one of the greatest failures” of the Treasury Department.

•Thanks to unemployed older Americans, illegal immigrants and an increase in the minimum wage, the teen unemployment rate in June was at 25.7 percent – about three times the national rate of 9.5 percent.

•According to Gallup, only 11 percent of Americans say they have a great deal or quite a lot of confidence in Congress, placing them dead last out of the 16 institutions rated this year
 
http://blog.heritage.org/2010/07/22/morning-bell-the-obama-tax-tsunami-is-here/