Category Archives: morality

Tax “Negotiation”

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Here’s another example of the Progressive view of negotiations.

In public statements, [Treasury Secretary Timothy, who has joined the negotiations] Geithner has suggested he will hold the line on the core White House demand to raise tax rates on wealthier Americans.  If “people look at this and look at it carefully, they’ll come to the judgment we reached,” he said at a Wall Street Journal conference earlier this month, adding that this meant “higher rates” and limits on tax deductions.

Because, of course, they’re right; anyone with any sense will agree with them, so that question is closed.

This is consistent with the new Obama position of being willing to discuss only tax raises, with spending cuts and entitlement reform completely off the table.  Progressives will talk about them later.  They promise.

The Lies Continue

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By why would we be surprised?

President Obama returned to campaign mode on Monday – casting Republicans as against the middle class by saying their failure to accept his offer for a limited extension of tax breaks will essentially ruin Christmas for consumers and retailers.

“Stop holding the middle class and our economy hostage over a disagreement on tax cuts,” the letter [he sent to Congress Monday] states, as Congress returns…to try to reach a deal that would avert the $500 billion mix of tax increases and budget cuts set to take effect in early January.

Because, of course his way is the only way, and those Evil Republicans are blocking him, again.  And never mind that it’s Obama who’s holding not just the middle class, but our entire economy, hostage against his getting his ransom from a tiny group of Americans whom he hates so much.

Here’s the Obama compromise: he’s repeating that he won’t sign a bill that doesn’t raise tax rates on those Americans.

And this:

A growing number of Democrats say they are willing to let the country go off the fiscal cliff if a deal cannot be reached by Jan. 1 that raises taxes on the top two percent of earners while protecting costly entitlement programs.

Led by Senator Patty Murray (D, WA), Democrats have pushed the idea that the cliff is not as bad as the hype, with it being more of a “slope” than a “cliff.”

Senator Charles Schumer (D, NY) backs Murray, also saying that Democrats can’t cave in.  He and other Democrats believe that Obama won a mandate for increased taxes with the presidential election.

Also weighing in on Monday in a New York Times Op-Ed was billionaire investor Warren Buffett, who has said he think the country will be just fine going over the fiscal cliff.

The Progressive compromise, generally, remains, “Do it our way,” and Progressive bipartisanship means Republicans doing it the Progressives’ way.

Can It Get Any More Feckless?

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Here’s a statement from our State Department’s statement concerning Mohamed Morsi’s power grab (coup?) in Egypt:

The decisions and declarations announced on November 22 raise concerns for many Egyptians and for the international community.  One of the aspirations of the revolution was to ensure that power would not be overly concentrated in the hands of any one person or institution.  The current constitutional vacuum in Egypt can only be resolved by the adoption of a constitution that includes checks and balances, and respects fundamental freedoms, individual rights, and the rule of law consistent with Egypt’s international commitments.  We call for calm and encourage all parties to work together and call for all Egyptians to resolve their differences over these important issues peacefully and through democratic dialogue.

This wishy-washy set of remarks is another example a foreign policy of leading from behind—which is to say following, and being influenced by the events ahead.

The answer to the question, then, seems to be…yes.  We just haven’t seen it yet.

Taxes and Widows and Orphans

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Included in President Barack Obama’s demand to raise tax rates on those Americans he hates so much is a raise in tax rates on dividends, unless the Republicans pay Obama’s price.  Obama’s ransom, after all, is simple: raise the rates on the Evil Rich, or the rates will go up for everyone.  Nice economy you got there….

Here’s what happens to dividends if Obama gets either one of his choices.

Presently, qualified dividends (which are most of the dividends about which you and I care) are taxed at a 15% rate for stockholders who are in a 25% or higher income tax bracket, and at a 5% rate for those investors in a lower bracket.  If Obama gets his way on tax rates generally, those rates will rise to ordinary income rates: those in the 39.6% bracket, for instance, will pay 39.6% on their dividend income (not 15%), those in the 15% bracket (which will reappear if Obama holds out for his ransom and the Republicans refuse to fold) will pay 15% on their dividends (not 5%).  Notice that: if Obama gets his way, the poor will get the highest tax bump.

Think the poor don’t invest?  Where are the savings of the retired, and of the stereotypical widows and orphans?  In safe, stable, income-producing vehicles—mutual funds that invest heavily in dividend-paying  stocks funds (or interest-paying bond funds).  These folks—on fixed incomes—are going to see a significant bump in their tax bill because a significant share of their income is dividend income.

Two top dividend mutual funds currently have a yield, courtesy of their dividend-paying stock holdings, of between 2% and 3%.  That’s not a lot of margin on which a retiree—or a widow or an orphan—can afford to see a tripling of his tax bite.

Of course, these folks could switch entirely to funds that pay interest rather than dividends, but with the Fed artificially suppressing interest rates, where’s the value in that?

Republicans need to find some courage.  The House needs to pass, this session, a budget (again) that includes lower rates across the board and spending cuts in the amount necessary to bring Federal spending to less than Federal revenues, with the difference mandated to paying down the debt.  Let the Democrats, led by our President, defend their refusal to pass this bill in the Senate and sign it into law; let them explain why they prefer the catastrophe of the Obama tax increases and sequestration.

And Republicans need to get serious about taking their message to all Americans.

The Obama Ransom

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The Wall Street Journal described the broad reach of President Barack Obama’s tax increases, which are set to occur in six weeks unless Republicans pay the ransom on the 98% of Americans which he’s demanding.  Here’s the effect on lower income Americans.

A married couple making between $20,000 and $30,000 a year would go from receiving, on average, a $15 tax credit to owing $1,408, according to research by the Tax Policy Center, a joint venture of the Brookings Institution and the Urban Institute.

The situation of an individual from the higher end of that range makes manifest that impact.

Traci Petty, 42, [is] a single mother…studying for a master’s in business administration in Danville, VA, while earning about $30,000 a year working part-time at a nonprofit.

Ms Petty would be hit by the shrinking of the child credit to $500 from $1,000, the higher payroll taxes and the elimination of the Bush-era 10% tax bracket.  Altogether, she would face at least a $1,500 cut in the $4,000 or so tax refund she gets each year.  She counts on the refund to pay bills.

But then, we’ve seen no evidence Obama even cares about these folks; his rhetoric focuses on “helping” the middle class and abusing those Americans at the upper end of the economic scale whom he hates so much.