President Obama is making a big deal about his new proposal for a tax increase on the "wealthy" so as to "help the middle class" with enlarged child care credits, tuition help and the like. The proposal is strictly a political stunt, but it merits discussion nevertheless.
Over Obama's years as president, the average middle class family has seen its income fall by just around 10%. This declining income has squeezed families all across America and made a great many unhappy. The reasons for the decline are in large part the policies followed by the federal government under Obama. These include the following:
1. Interest rates have been cut to near zero. Middle income families with some savings used to be able to get 5% interest on those amounts, but under Obama the rate paid on that interest has fallen to less than one quarter of one percent. Consider the retired folks on social security who thought that they would be able to supplement that income with $10,000 earned each year on their life savings of $200,000. Those people lost about a quarter of their expected income or more due to the government's policies.
2. Waves of illegal immigrants have taken many of the lowest paying jobs across the country. In addition, all of these extra (and illegal) workers have kept the level of wages from rising to keep pace with inflation because there is always another worker who will take the job for less. People have worked in the same job for the last five years with no raise. This does not affect the people with high skills in jobs that cannot be done by untrained or poorly trained illegals. For middle class folks who have jobs requiring lower level of skills, however, the illegal immigration has been a heavy weight pushing the wage levels down. As a result, millions who should have seen their incomes rise gradually during the last six years have instead seen no rise or even a decline as prices have nevertheless risen. Obama's failure to enforce the immigration laws has made this situation into a disaster for the lower middle class.
3. The federal government has injected a great deal of uncertainty into the economy which has prevented a true recovery from the recession. The merits of Obamacare can be debated (although the law is clearly a failure), but it is undeniable that imposition of Obamacare kept many businesses from hiring or expanding during the last five years. New federal bank regulations that encouraged banks to limit loans to small business also had the effect of slowing the growth of new businesses that normally are the main engines of American economic growth. Environmental rules have been modified so as to drive the cost of electric power up while smashing the coal industry that provides the basis for middle class life in states like Kentucky and West Virginia. Obama has been oblivious to the effects his policies have had on the economy and on the middle class for the last six years, and he has destroyed the livelihood of many.
So, Obama has been a disaster for the middle class, but now, suddenly, he is concerned about helping these people. Really? Think about what he is proposing. The plan is to raise taxes on the supposedly wealthy to the tune of about $350 billion and to return about $150 billion to the middle class. This is a false claim, but let's assume for the moment that Obama is actually correct in his description of the taxpayers and transfer recipients. Obama is "helping" the middle class by taking money from the wealthy, or so he says. But does this help? If you have the flu, does it help you if the government infects others with the same disease? If your car gets damaged in an accident, does it help you if the government comes and smashes your neighbor's car? Why does it help the middle class to take money from the supposedly wealthy? The simple answer is that it does not help. But that simple truth does not stop Obama from saying this stuff.
And let's consider those wealthy folks who are going to be taxed. Consider the people who will get hit with the new capital gains taxes due on death. Imagine that a couple have savings after a lifetime of work of $500,000 and they own a small business which they founded and have worked in for the last thirty years. That business is worth $1.5 million dollars mainly because the building in which their store is located has gone up in value over the years. Then suddenly the husband dies. He leaves everything to his wife. Under Obama's new tax proposal, that wife will get hit with a major new tax bill. Indeed, she will have to pay perhaps as much as half a million dollars in Obamatax. Does that make sense? NO!
It is a terrible thing that Obama has returned to class warfare as a means of political battle. It has always been the core of his message, but it still does terrible damage to the fabric of the country every time he returns to it. Obama simply cannot look at a problem and consider a solution that will help all Americans. Instead, he sees every problem as the basis for a grievance by one group or another. He truly does not care about growing the economy. His focus is on re-dividing the wealth that already exists. As a result, America has lost eight years of possible progress for eight years of Obama engendered class warfare.
Over Obama's years as president, the average middle class family has seen its income fall by just around 10%. This declining income has squeezed families all across America and made a great many unhappy. The reasons for the decline are in large part the policies followed by the federal government under Obama. These include the following:
1. Interest rates have been cut to near zero. Middle income families with some savings used to be able to get 5% interest on those amounts, but under Obama the rate paid on that interest has fallen to less than one quarter of one percent. Consider the retired folks on social security who thought that they would be able to supplement that income with $10,000 earned each year on their life savings of $200,000. Those people lost about a quarter of their expected income or more due to the government's policies.
2. Waves of illegal immigrants have taken many of the lowest paying jobs across the country. In addition, all of these extra (and illegal) workers have kept the level of wages from rising to keep pace with inflation because there is always another worker who will take the job for less. People have worked in the same job for the last five years with no raise. This does not affect the people with high skills in jobs that cannot be done by untrained or poorly trained illegals. For middle class folks who have jobs requiring lower level of skills, however, the illegal immigration has been a heavy weight pushing the wage levels down. As a result, millions who should have seen their incomes rise gradually during the last six years have instead seen no rise or even a decline as prices have nevertheless risen. Obama's failure to enforce the immigration laws has made this situation into a disaster for the lower middle class.
3. The federal government has injected a great deal of uncertainty into the economy which has prevented a true recovery from the recession. The merits of Obamacare can be debated (although the law is clearly a failure), but it is undeniable that imposition of Obamacare kept many businesses from hiring or expanding during the last five years. New federal bank regulations that encouraged banks to limit loans to small business also had the effect of slowing the growth of new businesses that normally are the main engines of American economic growth. Environmental rules have been modified so as to drive the cost of electric power up while smashing the coal industry that provides the basis for middle class life in states like Kentucky and West Virginia. Obama has been oblivious to the effects his policies have had on the economy and on the middle class for the last six years, and he has destroyed the livelihood of many.
So, Obama has been a disaster for the middle class, but now, suddenly, he is concerned about helping these people. Really? Think about what he is proposing. The plan is to raise taxes on the supposedly wealthy to the tune of about $350 billion and to return about $150 billion to the middle class. This is a false claim, but let's assume for the moment that Obama is actually correct in his description of the taxpayers and transfer recipients. Obama is "helping" the middle class by taking money from the wealthy, or so he says. But does this help? If you have the flu, does it help you if the government infects others with the same disease? If your car gets damaged in an accident, does it help you if the government comes and smashes your neighbor's car? Why does it help the middle class to take money from the supposedly wealthy? The simple answer is that it does not help. But that simple truth does not stop Obama from saying this stuff.
And let's consider those wealthy folks who are going to be taxed. Consider the people who will get hit with the new capital gains taxes due on death. Imagine that a couple have savings after a lifetime of work of $500,000 and they own a small business which they founded and have worked in for the last thirty years. That business is worth $1.5 million dollars mainly because the building in which their store is located has gone up in value over the years. Then suddenly the husband dies. He leaves everything to his wife. Under Obama's new tax proposal, that wife will get hit with a major new tax bill. Indeed, she will have to pay perhaps as much as half a million dollars in Obamatax. Does that make sense? NO!
It is a terrible thing that Obama has returned to class warfare as a means of political battle. It has always been the core of his message, but it still does terrible damage to the fabric of the country every time he returns to it. Obama simply cannot look at a problem and consider a solution that will help all Americans. Instead, he sees every problem as the basis for a grievance by one group or another. He truly does not care about growing the economy. His focus is on re-dividing the wealth that already exists. As a result, America has lost eight years of possible progress for eight years of Obama engendered class warfare.
No comments:
Post a Comment