The Solution to Everything, Tax it.

658.) President Obama has been President for four years, and during those four years we have been given an excellent view of how he seeks to solve the problems of the United States.  He seeks to solve our debt problem by spending more of China’s money, and of course tax every last thing he can get his hands on.  He was willing to let taxes go up on the middle class, unless taxes were raised on the upper income earners.  He would not negotiate on raising the tax rates, not one bit. Well a deal was made, that stopped us from supposedly going over this made up cliff. However after the deal was made President Obama had some interesting words, the tax hikes were not done, he wants more.

In his weekly radio address President Obama said that he would be willing to consider some spending cuts to lower the deficit, but only if he would be able to reform the tax code… right, we’ll come back to this.   In this address President Obama said, ” I believe we can find more places to cut spending without shortchanging things like education, job training, research and technology all which of which are critical to our prosperity in a 21st century economy,.  But spending cuts must be balanced with more reforms to our tax code. The wealthiest individuals and the biggest corporations shouldn’t be able tot take advantage of loopholes and deductions that aren’t available to most Americans.”  Do basically what President Obama is saying here is that he is unwilling to take the deficit seriously unless we reform the tax code. Well you know, I believe the GOP proposed a bill that closed loopholes and limited deductions for the top income bracket. President Obama said that that was not a serious option, so what has changed? I guess the only thing that has changed is that he got what he always wanted, a tax rate increase on the job creators of this nation. Now he is going to pretend as though he is willing to negotiate. Now he is going to pretend as though he is willing to actually cut spending. However the first part of this address shows the truth. He won’t cut spending because to do so we will have to address all areas in which the government has treated itself to a healthy portion of China’s dollars.  That means we will have to reform education, we will have to reform job training programs, we will have to stop funding research projects and technology projects.  The government has spent us into oblivion, guess what that means, hard choices are going to have to be made, and people are going to suffer, because the progressives in congress don’t understand that money doesn’t just magically appear.  It has to be earned. These tax hikes that President Obama has been salivating on over the last year and a half aren’t even a drop in the bucket when dealing with trillion dollar deficits.  At one time, his proposal included 85 billion in new revenue, our deficit is running at 1,200 billion dollars.  He tax hikes were a joke, a political ploy to appease his base, and thumb his nose at the GOP.

In that same address President Obama had this to say, about the up coming debt ceiling debate, funny I thought we just had one of those, oh yes that is right the progressive have fought tooth and nail to end any attempt to cut spending, anyways “‘One thing I will not compromise over is whether or not Congress should pay the tab for a bill they’ve already racked up” There is more to this quote, him story telling, and trying to place himself on high. This quote just burns me up,  he has the audacity to place the blame for our debt on CONGRESS, as if he had nothing to do with it? This man lives in a fantasy world. Someone better tell him that he doesn’t get to campaign anymore, he has been doing that for the last five and half years, and it is time to start governing.  He truly believes that every last American is a moron, he has to if he thinks that blaming the debt on congress is going to somehow convince the American People that congress alone is responsible for the financial problems we now face.  The congress, control by radical progressives at the time, passed the 787 billion dollar stimulus bill (thanks to base line budgeting the gift that keeps on give 787 trillion, plus 3-10% every year), then that same congress passed an additional $410 billion supplemental spending bill for fiscal year 2009 ( a bill rejected by big spender President Bush in 2008) then lets not forget the CBO estimated 1.6 trillion dollars of new federal spending coming in 2014 thanks to Obamacare. All of that spending even though it was passed by the congress, didn’t just happen, it didn’t just pass the house, pass the senate, then magically go into affect. No there is a third step that must be taken, President Obama signed them into law. He could have vetoed all of the spending that has been amassed under his watch, but he didn’t he signed in into law. He is just a responsible for the this debt, actually more so than the congress.  Let us not forget the fact that the only reason President Obama’s spending spree came to an end is that the TEA Party took the House of Representatives away from the control of the radical left wing progressives.  Unfortunately the TEA Party came too late, the damage was done.  The Progressive racked up a massive amount of new government spending, that has been placed into the budgets of countless government agencies. So there has been a major shift in congressional power, a large portion of congress is not responsible for the spending, President Obama however, he was the one signing the loan against our children’s future.

I have talked about this before, but I would like to bring it up again. There is this misconception, perpetuated by President Obama and his progressive allies, that the debt is not his fault, he inherited the debt. This is partially true, yes he inherited a debt and deficit from President Bush, just as President Bush inherited a debt and deficit from President Clinton.  President Obama likes to claim that he is merely getting saddled with the debt racked up from President Bush, that the trillion dollar deficits that we are now running are just the chickens coming home to roost from eight years of the Bush Administration. However this is a fantasy. In 2008 President Bush had built up an outrageous $458 billion dollar deficit. The last budget deficit from a budget adopted by a Republican controlled congress was just $161 billion in 2007.  The budget deficits from President Obama’s four years in office are just in a completely different league. Let us take a look.

      2007 Deficit $161 billion dollars
      2008 Deficit $458 billion dollars
      2009 Deficit $1,413 billion dollars
      2010 Deficit $1,293 billion dollars
      2011 Deficit $1,300 billion dollars
      2012 Deficit $1,327 billion dollars

So what happened in 2009 that caused the deficit, not the debt, the deficit to jump almost a trillion dollars? The answer, radical out of control spending.  Time to do a little logical process, and maybe some math, I wonder what would happen to a country running a 458 billion dollar a year deficit adds 787 billion dollars, and then another 410 billion dollars of new spending? Does that 1,197 billion dollars of new spending just not appear on the deficit?  You know I bet you that the 1,197 billion dollars of new spending is the real reason why the deficit ballooned from $458 billion dollars in 2008 all the way up to $1,413 billion dollars in 2009.  But why then did the deficits remain so high in 2010, 2011, and 2012? They didn’t pass any insane spending bills (other then the Taxation and Expensive Care Act), why then was the deficit so high, this must be the chickens coming home to roost from the spending under President Bush. Actually no its not.

You see the progressives have a nice tool hidden up their sleeves called base line budgeting. Under base line budgeting every government department gets a 3 to 10% increase in their budget, whether they need it or not. This magical little budgeting tool allows progressive politicians such as John Boehnor, Nancy Pelosi, Harry Reid, and President Obama to claim they cut spending, without actually cutting spending. Those evil draconian cuts in the fiscal cliff debate, didn’t actually cut spending, all they did was cut the growth of spending, so we are still spending trillions, but just not going to spend a little more the next time.  It works like this. Say you need a new car, you can afford a $30,000 car, you save up the money, get financing, and go to the dealership to buy the $30,000 car. While you are there the salesman shows you a fancy new Mercedes Benz, you sit in it, test drive it, and fall in love with it. Then the sales man tells you that the car is normally $70,000, but right now you can have it for $60,000. A heck of a deal, you jump on it, buy the car, and brag about how much money you saved. Unfortunately you didn’t actually save $10,000, you lost an extra $30,000 or twice what you could afford to spend. That is what the government has been doing to us with their insane spending.  That is why we have had trillion dollar plus deficits for the last four years. Yes they stopped making new spending, but the 1,197 billion dollars of new spending didn’t just go away in 2009, no instead sense most of that money was given to departments for spending, that money was added to their budgets for 2009, then that money plus the previous years budget are added together, and then an additional 3% of that is added to the departments budget.  That is why we have high deficits.  It is not mostly congress’s fault, yes some limp wristed members of the old congress still remain, but thanks to the 2010 election most of those responsible for the spending are gone. The majority of the blame for the deficit rests solely on the shoulders of President Barack Obama the one man who could have held to his belief that a $400 billion dollar deficit was unpatriotic, but instead chose to spend over a trillion dollars in his first year of office.  He is the one who racked up this debt, so he should not be placing the blame for it on the congress, just because the majority of its members are a different party than he is.

Any ways, back to the taxation issue

659.) President Obama has made few attempts to hide the fact that he is all for raising taxes. However, he does like to hide it when he raises taxes on anyone but the evil rich. One such place that he was able to pass new tax hikes under our noses was in the Taxation and Expensive Care Act.  In this law there are all sorts of great new taxes for the American Consumer to pay.   One such tax was the Medical Device Excise Tax (MDET).  Section 4191 of the Internal Revenue Code imposes an excise tax on the sale of certain medical devices by the manufacturer or importer of the device.  So technically the 2.3% tax should be charged to the manufacturer or the importer, not the consumer. However, the IRS has clearly stated that the responsibility to pay the tax generally falls upon the manufacturer or the importer, however that lovely word “generally” means that the tax responsibility is no set in stone.  From the IRS “Generally, the manufacturer or importer of a taxable medical device is responsible for  filing From 720, Quarterly Federal Excise Tax Return, and paying the tax to the IRS.”  What this means is that the that manufacturer or importer can pass the increase in price on to the consumer.   The tax is supposed to raise $29 billion dollars to help pay for the Taxation and Expensive Care act. The progressive’s well meaning plan was for that $29 billion to come out of the pocket of manufactures. However sense the tax is 2.3% and many manufacturers operate at a profit margin of 4%, that means over half the profit of the company is going to taxes. It is inevitable then that prices on goods will go up. So as is always the case with a tax on producers, the increased revenue will actually be coming out of the pockets of the average American consumer.

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4 comments
  1. Yes, what could’ve possibly happened in the end of 2008 and the beginning of 2009 to make the deficit explode?  The economy imploding, the dow going down six thousand points, a few trillion dollars vanishing from the economy, the banks and the auto and housing industry collapsing all within the space of a few months?Nah, the black guy did it!

  2. AOK4WAY said:

    No doubt. But isn’t that just capitalism doing what it’s supposed to do, serving capital? I know that isn’t what we’re supposed to believe, but isn’t it true? The entire system is set up in a way that favors capital over consumer. No new tax that ever comes along will ever come from anywhere but the taxpayers’ pockets, my friend!

  3. virtus1 said:

    Agnodorko thinks the the stock prices as reflected by the Dow caused the federal budget deficit?  The Dow is a reflection of the value of shares traded, and has little impact on the size of the federal deficit.Does that economic numbskull actually think that the “vanishing” dollars caused federal spending to exceed revenues?  The aggressive and progressive tax structure in the United States acts as a machine which produces deadweight loss (depending on the slope of the supply and demand curve) which exceeds the value of the revenue generated by up to three times.  The addition of these taxes drives the optimal quantity of goods and services exchanged on the market down, and the price of such goods are driven up.  These taxes reduce the value created in the economy compared to the value created under natural conditions.  In other words, taxes reduce the wealth an economy creates.The housing industry collapsed because interest rates were held down to long and too low.  This caused a bubble which agnoflupso’s beloved dear leader is re-inflating and will burst again.  The auto industry was killed by ridiculous policies the automakers agreed to while negotiating labor contracts, building inferior automobiles that look like blocky turds (only 200bhp from a 5L engine???), and doggedly holding onto outdated manufacturing techniques in a very competitive market.  These failures only increased the federal debt because the federal government under the leadership of idiots like Timothy Geithner and the criminal TARP program blew through hundreds of billions of dollars.Yet again, agnoputzo creates an argument based on a flimsy platitude, and defends the worst executive the US has managed to elect.  That can be objectively measured by the length and depth of the real unemployment rate, labor force participation rate, frequency and continuation of war crimes, federal spending as a component of GDP, monetary irresponsibility, etc….

  4. @agnophilo – Now I am a racists? you are getting desperate.  Why are you progressives so obsessed with race. Are you incapable of seeing past it?

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