The completely unserious Obama budget
By Neal Boortz
First of all … you do know that wasn’t a sincere budget speech Obama gave yesterday, don’t you? Obama knows full well that Senate Majority Leader Harry Reid has no intention of ever allowing this budget to come before the Senate for a vote. The last time an Obama budget was voted on in the Senate it lost … 99 to zip. The Senate hasn’t passed a budget in well over 1000 days … and they have no intention whatsoever of taking this piece of Obama squeeze up.
No …. It wasn’t a budget speech. It was a campaign speech. And that document … those thick books the taxpayers paid for … aren’t a budget. They’re campaign materials. To understand that this is a campaign ploy just do a slow cruise of newspaper headlines from around the country. “Obama proposes higher taxes on the rich.” Mission accomplished! That’s the message Obama was trying to get out; not that he was serious about bringing our spending under control; not that he recognized the danger in runaway entitlement spending; but that he wanted to raise taxes on the rich. THAT is what Obama followers wanted to hear.
In the minds of the moocher class all that really matters is that you raise taxes on the rich. After all, they don’t deserve that money – Obama has said so --- and they don’t need it. Obama has said that too. And Obama has also told them that it’s simply not fair for those people to have so much money while the moocher class has so little. So raise their taxes! Sure! Everything will be fine! They don’t need the money, so they certainly won’t miss it; and the rich will just keep on doing what they’ve been doing to become rich and the money will just flow like golden nectar into the federal treasury, there to be doled out by a beneficent Obama administration to the poor, poor pitiful less fortunate souls who somehow are just unable to provide for their own existence.
Obama tells us that he is going to reduce the deficit by increasing taxes on the rich. There’s an interesting little rule in Washington that allows Obama to make this claim without being laughed off the podium. Obama will tell us that the Congressional Budget Office finds that his tax increases will bring in X amount of additional revenue. There’s a glitch here though. The CBO MUST assume that the evil rich will not change either their earning or investing behavior when the taxes go up. The assumption that must be made is that the rich will do nothing to lower their tax burden. Republicans are trying to change this rule, but as you might expect they are running into a lot of resistance from Democrats. Somehow Democrats feel they will be hurt if the CBO has to make a more honest and realistic assessment of the affect of tax policies. If the CBO says “Hey .. hold on! If you raise this tax the people paying the tax are going to adjust their economic behavior and you simply aren’t going to get the revenue you think you will get” the Democrats will loose the tax increase argument time after time. They can’t allow that to happen.
Do you see how absurd that assumption that the rich won’t change their behavior is? Try this example. Obama wants to tax capital gains – that’s your return on an investment – as ordinary income. That means when the Bush tax cuts expire – and when you add on the 3.8% ObamaCare tax plus the 1.2% itemized deduction phase-out -- the evil SOB rich investor will be paying 44.6% on his capital gains. So tell me this … after these taxes are passed, but before they go into effect … why wouldn’t this evil, greedy rich monster just sell his investments, pay the 15% capital gains tax in effect right now, and put that money into tax free municipal bonds?
Then there’s Obama’s idea that if a family makes over $1 million a year, they will be subject to a minimum tax of 30%. Do you seriously think these people aren’t going to change their financial behavior here? How do we prevent these people from sending their money overseas to work in more favorable tax climates? What’s Obama going to do? Erect an economic Berlin Wall? Is he going to shoot this money in the back as it tries to escape?
The point here is that the rich didn’t get that way through stupidity. They have ways to move their investments and their money around in order to avoid confiscatory taxes. Increasing capital gains taxes will appeal to those who are either envious of or hate the rich … but it will not bring increased revenues to the government. Obama knows this. He’s admitted it. When Charles Gibson asked Obama if he knew that past increases in the capital gains tax actually reduced tax revenue, Obama admitted that this was correct. It didn’t matter, though, because it was an issue of “fairness.” In other words, that money needs to be taken away from these people because it just isn’t fair for them to keep it. Now that’s some serious economic thought there.
The enormity of this insincere budget and the accompanying tax increases, and the the consequences for your children’s future is daunting, and yet the ObamaMedia morning shows gave it a whopping 47 seconds worth of coverage. Not even one minute of network coverage yesterday morning was devoted to PrezBo’s budget! But I’m sure that all of America is now intimately familiar with the Grammy gowns worn on the red carpet and latest on the death of Whitney Houston.
Obama’s budget, while it may not be ‘sexy,’ has consequences. Try this one on for size: Even when Congress DOES pass a budget, they only control about 38% of total federal spending, and that figure is declining --- FAST. The rest is “mandatory” spending, which goes toward Medicare, Medicaid, Social Security and interest on our national debt. In fact, Dear Ruler’s budget will spend 1.5 times as much money on health care as on defense, including the cost of the continuing war in Afghanistan in 2013.
Considering these fact, what was Obama’s plan for reforming these entitlements and reining in our national debt? Well … there was no plan. Just tax increases. No entitlement reform, but here’s what Obama’s budget DOES do over the next ten years:
President Obama’s budget spends $47 trillion over the next 10 years;
Spends $3.8 trillion in FY13;
Spends $5.8 trillion in FY 22;
Increases spending by $1.5 trillion over the next ten years;
President Obama’s budget taxes $1.9 trillion more over the next ten years;
Hikes taxes by $1.4 trillion in income taxes;
Hikes taxes by $143 billion in death taxes;
Hikes other miscellaneous taxes by $340 billion;
President Obama’s budget increases borrowing by $11 trillion over the next 10 years;
Increases debt by $1.3 trillion in FY12;
Will add up to a staggering $6.2 trillion in debt during Obama’s four years in office;
Expected debt at end of FY22 is $25.9 trillion.
President Obama’s budget has a built in gimmick to use the wind down in Iraq and Afghanistan as a $1 trillion in savings; and,
Does not complete the 2009 promise of President Obama to cut the deficit in half in his first term.
If you really want the details on Obama’s budget, Jamie Dupree’s blog is a must-read. But here’s something else to consider … historically our federal government’s tax revenue averages about 18.3% of GDP. Under Obama’s budget, tax revenues would rise to an unprecedented 20.1% of GDP by 2022. What this means is that there is less revenue in the hand of private citizens and businesses engaging in free-market endeavors. Instead, more money is being taken by the government and directed to wherever the government feels it should be spent. This is how ObamaNomics works.