President Obama announced his 2013 proposed budget last week calling for about $2 trillion dollars in tax hikes and fees. In fairness it also includes some new tax cuts and credits for some which would lower that total to roughly $1.5 trillion – not much if you say it fast.
The orgy of profligate government spending during the last two presidential administrations continues unabated under this budget, and to keep it going strong, taxes will be drastically increased for successful individuals while any spending cuts here will be more than offset by more spending there.
Remember the Bush tax cuts? You know; the ones that did nothing whatsoever to strengthen the economy but, together with massive increases in military and other spending, resulted in the greatest economic collapse in America since the great depression? Well, they are scheduled to expire at the end of this year and the president can’t wait.
He hopes that by allowing the cuts to expire the government will collect about $968 billion in extra revenue over the next ten years from taxpayers earning more than $250,000 per year. Their income tax rate will jump back to the neighborhood 39.6 % of earned income. They’re already paying 35 % now, and the rate they’ll pay on dividend income would leap to 39.6 % from the 15% they pay now.
Long term capital gains for these folks will be taxed at the new rate of 20%, up from the current 15%, and the estate tax when they die balloons to 45% of what they accumulated during life, from the current 35% death tax now.
All of this means that, just with federal taxation alone, these folks will have to fork over about 40% of any income they receive during their lives, and then if they somehow manage to save anything for their kids, the government will confiscate nearly half of it when they die. If you are successful in this country, your government regards you as a golden goose.
Even God Almighty Himself, during biblical times, was more than satisfied and happy to take 10% in sacrifices from His flock of sheep. The United States Government, by contrast, demands more than four times that figure and it is never satisfied. It just keeps taking and spending; spending and taking.
The hike in investment income taxes, for example, is not quite enough to satisfy the government monster. It plans to implement a surcharge of 3.8 % to fund the federal health care overhaul, which will bring the top dividend tax rate to 43.4 %, and the top capital gains rate to 23.8 %.
Investors in the economy would be taxed on their profits as ordinary income, instead of at the current 15% rate, if the president has his way -- a tax increase amounting to more than 100%. And every household enjoying income of more than $1 million annually will be caught up in the “Buffett Rule,” which ensures that at least 30 % of it is taxed.
On top of all that, the value of all itemized deductions for households making more than $250,000, including items such as mortgage interest and charitable contributions, would be cut to a 28 % rate with the hope of raising another $584 billion in tax revenue over the next 10 years. So the cost of owning a home and giving to charity goes way up under Obama’s new budget plan.
Airline tickets will cost more too with stiff new fees to pay for “airline security.” I guess this means that the TSA won’t be going away anytime soon. Financial institutions will be charged some $61 billion-over the next decade in "financial crisis responsibility” fees, which will no doubt be passed right on down to the consumer – you and me – making the cost of doing business higher than ever.
The president considers things like the winding down of the wars in Iraq and Afghanistan as “savings,” and claims that his proposed budget will result in $4 trillion in “deficit savings,” yet the deficit is still expected to rise by at least $6.6 trillion over the next 10 years. It’s quite clear, then, that any “savings” generated by this budget will be far outweighed by new spending.
Don’t count on the Republicans to put a halt to the spending spree, unless by some miracle the libertarian, Ron Paul, is elected president. Republicans spend just as much or more as Democrats and want less taxes to boot which results in even greater deficits and debt.
Case in point: The Obama administration wants to cut funding for the “D.C. Opportunity Scholarship” program, a $60 million political pet project of House Speaker, John Boehner (R-Ohio), which helps underprivileged children in Washington D.C. get vouchers for private schools. This has politicians on both sides of the aisle screaming bloody murder. The president can’t even cut $60 million worth of pork without causing hysteria on Capitol Hill.
Meanwhile, the powers that be at NASA, are crying “irrational,” over proposed cuts for exploration of other planets, especially Mars. Two years ago, President Obama said his ultimate goal was to send astronauts to Mars. Faced, however, with a choice between spending massive amounts on a new space telescope, or massive amounts on expeditions to Mars; Mars lost. Mars missions will continue, of course, but not at the rate of spending earlier anticipated.
The cuts to the Mars missions are part of a proposed reduction of about $300 million in NASA's $1.5 billion annual planetary science budget. The current Mars budget is $581.7 million. "To me, it's totally irrational and unjustified," carped Edward Weiler, NASA's former administrator for science. "We are the only country on this planet that has the demonstrated ability to land on another planet, namely Mars. It is a national prestige issue."
You see, as far as United States government agency administrators are concerned, it’s perfectly right and proper to spend $billions of taxpayer dollars on boondoggles such as national prestige issues. Why not? The money isn’t coming out of his pocket.
Instead, NASA is planning to spend a lot more taxpayer dollars on a replacement for the aging Hubble Space Telescope, and save Mars missions for later. The new James Webb Space Telescope, originally estimated to cost $3.5 billion, is now projected to cost around $8 billion, a budget busting cost overrun of more than 100%.
Where is the savings?
There are never any savings in politician land; only taxing and spending.
Remember the great Solyndra fiasco and scandal? The United States government guaranteed a loan for the staggering sum of $535 million – over a half $billion taxpayer dollars -- to a company which was going bankrupt, and the money simply disappeared into the sinkhole.
Now we know where at least a small portion of it went. Solyndra executives were awarded quarterly bonuses worth up to $60,000 apiece as the California solar-panel Company was headed for bankruptcy. The payments were described by one former employee as "retention" bonuses to slow the high rate of turnover at the company. The rats were deserting the sinking ship and taking the bonuses with them.
This is the audacity of government taxing and spending.