The Obama plan: massive tax hikes
posted at 9:03 am on February 27, 2009 by Ed Morrissey
Jake Tapper took a look at the fine print in Deadbeatonomics yesterday, and discovered a lot of tax hikes among the Hope and Change. His plan for revitalizing the economy relies on sucking about a trillion dollars out of it over a ten-year period, starting in 2011:
1) On people making more than $250,000.
- $338 billion – Bush tax cuts expire
- $179 billlion – eliminate itemized deduction
- $118 billion – capital gains tax hike
Total: $636 billion/10 years
2) Businesses:
- $17 billion – Reinstate Superfund taxes
- $24 billion – tax carried-interest as income
- $5 billion – codify “economic substance doctrine”
- $61 billion – repeal LIFO
- $210 billion – international enforcement, reform deferral, other tax reform
- $4 billion – information reporting for rental payments
- $5.3 billion – excise tax on Gulf of Mexico oil and gas
- $3.4 billion – repeal expensing of tangible drilling costs
- $62 million – repeal deduction for tertiary injectants
- $49 million – repeal passive loss exception for working interests in oil and natural gas properties
- $13 billion – repeal manufacturing tax deduction for oil and natural gas companies
- $1 billion – increase to 7 years geological and geophysical amortization period for independent producers
- $882 million – eliminate advanced earned income tax credit
Total: $353 billion/10 years
Most of this is vaporware. This is a triumph of static tax analysis, which assumes that increased taxes have no effect on the amount of money available for taxation. For instance, the hike from 15% to 20% on capital-gains taxes assumes that people will invest and cash out in the same manner they do at 15%. They won’t. The fact of increasing the tax will discourage investors and encourage them to shift money out before the hike. Not only will the extra revenue vanish, but investment levels will drop, leading to job losses and less opportunity for American businesses.
And what “itemized deduction” will get eliminated? All of them? Some of them?
The business tax hikes are even worse. Obama will increase taxes on existing American oil production starting in 2011. Do we have massive amounts of alternative energy capacity ready to replace the energy production and usage that this will discourage? A growing economy has to have a reliable energy supply. Energy producers get hit on several fronts in this plan, and those costs will either result in lower energy production or increased cost to the consumers.
Again, the expected revenues will far exceed the reality, once the depressive economic effects of these taxes kick in. The spending, unfortunately, will be all too real, which will mean huge, ballooning deficits. It’s the inevitable result of Deadbeatonomics.
Blowback
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Gee…so many Dems voted for Iraq. How do you square that? Or is that not listed in your notes?
genso on February 27, 2009 at 2:30 PM
Wrong. We are against it at the federal level. You want a bike path, to it at the state level or lower. We do have state governments, county governments, city, etc.
WashJeff on February 27, 2009 at 2:31 PM
Unless you like driving your balls on buffao & grama grass.
It really doesn’t mow very nicely!
I suppose coyote burgers might also be mistaken to contain Congresscritters.
If it gets to that point we can just hunt PETApeckerheads for food!
I can never see the plentiful coyote getting ‘endangered’.
But then again, they are trying to list the black-tailed prairie dog as endangered.
They are more plentiful (taking into consideration the ratios of predators & prey in their home territories you eco people!) than coyotes!
I’m really scratching my head over this latest wacko effort.
Badger40 on February 27, 2009 at 2:31 PM
I agree with Neil Boortz on this one. I hope that small business owners will specifically target those employees that voted for Obama when forced to begin eliminating jobs.
jimmy2shoes on February 27, 2009 at 2:31 PM
What? And give them a raise?
genso on February 27, 2009 at 2:33 PM
Congress didn’t give him a blank check, but you have a point.
We should have used a nuke like I have advocated all along.
Then there would be no nation building going on & also, no AlQaeda troubles.
Badger40 on February 27, 2009 at 2:33 PM
Is that what you call throwing aircraft carriers full of cash to Democrat Party donors and supporters?
What “nation” does that build, the Obama-nation?
Barack Obama and the Democrat Party have just stolen three trillion dollars from the American people.
So like your hero Barack Obama, you’re pissing on the victory we’ve won over there.
Typical leftist person.
NoDonkey on February 27, 2009 at 2:33 PM
Unfortunately, those of us with NO employees will have to fire ourselves.
I’m screwed no matter where I turn.
Badger40 on February 27, 2009 at 2:34 PM
This says it best…
http://pajamasmedia.com/eddriscoll/2009/02/27/photo-and-quote-of-the-day/
Keemo on February 27, 2009 at 2:34 PM
No a promotion, to customer.
jimmy2shoes on February 27, 2009 at 2:34 PM
Shutdown all govt programs with the exception of the military.
MarkTheGreat on February 27, 2009 at 2:34 PM
Yep! Screwed, royally.
jimmy2shoes on February 27, 2009 at 2:35 PM
Mmmmmmmmmmmmm…coyote burgers served on a PETA.
WashJeff on February 27, 2009 at 2:35 PM
There’s no “nation building” in Barry’s budget.
MarkTheGreat on February 27, 2009 at 2:35 PM
genso on February 27, 2009 at 2:22
Haven’t you heard about the greenies that are advocating drinking human breast milk (PETA again), and eating plants and insects? (PETA wouldn’t go for the insects, that is too close to an animal).
Hey that’s it! I was getting ready to go on my annual “get in shape for swimsuit diet”, but instead I’ll just eat plants from now on, I’ll be in great shape! Then I won’t have to worry about eating animals or those high taxes cuz my grocery bill will be a lot less! LOL!
Susanboo on February 27, 2009 at 2:36 PM
Hell, yes. Return the power to the states and then we can choose betwen the lib slum and the free states. I’m thinking a major influx here in SC if that happens.
genso on February 27, 2009 at 2:36 PM
Funny how fiscal cons are against nation building in our country but gave w a blank check in Iraq and wasted billions.
getalife on February 27, 2009 at 2:28 PM
I can’t believe people exist that are dumb enough to write such absolute bullshit. Does this thing have any comprehension as to how our government works?
Keemo on February 27, 2009 at 2:36 PM
Rhetorical, right?
jimmy2shoes on February 27, 2009 at 2:38 PM
Looks like 20 people showed up for the tea party in DC.
Embarrassing.
getalife on February 27, 2009 at 2:38 PM
You don’t “build a nation” by taxing away all its wealth, tool. And we already have a nation, one that was built by hard-working, innovative, risk-taking entrepreneurs — the same type of people that Obama is busy trying to tax and regulate out of existence.
Obama isn’t “building a nation” — he’s trying to destroy one, so that he can replace it with the type of soul-destroying Communist sh#thole that his parents and mentors (like Frank Marshall Davis and Ayers and Wright) so admired.
AZCoyote on February 27, 2009 at 2:38 PM
He’s a liberal.
MarkTheGreat on February 27, 2009 at 2:38 PM
You can’t be serious about the breast milk. Oy vey.
genso on February 27, 2009 at 2:39 PM
LOL!
MOAN! Another way for those capitalist conservative sexual pigs to keep us women enslaved!
We will be kept barefoot & pregnant to be harvested for breast milk!
Badger40 on February 27, 2009 at 2:39 PM
A restaurant in the Netherlands somewhere is already using it in its menu.
UGH!
I accidentally tasted some when my daughter was a baby while I was pouring my own into a bottle to warm it splashed up on my face.
Not so bad-but I’d rather drink my own thank you!
Badger40 on February 27, 2009 at 2:40 PM
A perfect example why libs oppose charter schools and home-schooling. Got to hang on to that voter base. Carville said it best. Lib Dems need stupid people to keep them in power. This election proves the point.
Cody1991 on February 27, 2009 at 2:40 PM
We have jobs. So we can pay for your social programs.
No time to protest.
But relax-we will be there when it hits the fan.
We are slow to rouse, but when roused-we will not stop.
Badger40 on February 27, 2009 at 2:41 PM
Fixed it.
WashJeff on February 27, 2009 at 2:42 PM
Yes, I’m somewhat discerning about breasts myself.
genso on February 27, 2009 at 2:42 PM
That can backfire if they aren’t careful, y’know.
sethstorm on February 27, 2009 at 2:45 PM
The fatal flaw, that taxes are a static quality, despite evidence to the contrary.
We’re in deep doo-doo.
itsspideyman on February 27, 2009 at 2:46 PM
OK. Explain how?
genso on February 27, 2009 at 2:47 PM
You’re being snookered people. Even Obama’s so called $13 tax break is not a reduction in rates, it’s simply a credit that must be included in the following year’s tax return and taxed as normal income. In fact you’ll end up giving most of it back. How long will it be before these Kool Aid drinking fools will catch on to his game? Except for the parasites that are clinging to Obama’s legs screaming “more free stuff messiah”, everyone else had better get ready to have the lifeblood sucked out of them.
rplat on February 27, 2009 at 2:50 PM
Yeah, and between 500-1000 showed up in a bunch of other cities. Including liberal cesspools like Chicago. Imagine how many will show up in the springtime when it’s not 20 degrees outside.
Doughboy on February 27, 2009 at 2:52 PM
What could they do, ruin the business or something? /sarc/
jimmy2shoes on February 27, 2009 at 2:53 PM
jimmy2shoes on February 27, 2009 at 2:38 PM
Actually, I’d be happy with a reply if only for the entertainment value.
Keemo on February 27, 2009 at 2:54 PM
Can’t we just increase taxes on beer, cigarettes, and gambling?
jediwebdude on February 27, 2009 at 2:55 PM
And that is why the Democrats want an unconstituional congressional seat there.
WashJeff on February 27, 2009 at 2:55 PM
They don’t reply. Just shallow rhetoric. No depth. No real life common sense. Welcome to our new class of overlords.
genso on February 27, 2009 at 2:55 PM
Yields are rising across the spectrum as the Treasury sucks up every available monetary unit of capital all over the world to try to pay for Obama’s spending jihad and it still isn’t enough.
We may be witnessing the unfolding of one of the greatest economic catastrophe in modern history in real time.
KentAllard on February 27, 2009 at 2:56 PM
Many of the states are getting sick of the power grab hidden in all these bailout and budget bills by the Federal Government and are starting to act.
neuquenguy on February 27, 2009 at 2:57 PM
Group up and turn their conversation to concerted speech.
sethstorm on February 27, 2009 at 2:57 PM
I’ll fill in for him. “Well, it’s, it’s THAT DAMNED GEORGE BUSH!”
How’d I do?
jimmy2shoes on February 27, 2009 at 2:57 PM
Them’s fightin’ words (snarl).
NoDonkey on February 27, 2009 at 2:57 PM
I’m surprised anyone in DC showed up…its full of government drones that leech off the taxpayer..
right4life on February 27, 2009 at 2:58 PM
Won’t work. All evidence I have reviewed over the years, not only here in the US, but abroad, has shown over the past century that doing so simply contracts domestic legal over the counter sales, pushes such activities underground, leads to blackmarketeering, or offshore purchases and activity. In essence for every 10 cents increase in tax on these items you lose 20 cents in revenue…if not more, over the short and long run.
coldwarrior on February 27, 2009 at 2:59 PM
WTF…do you have a cogent thought? Please try again cause….damn, that was stupid.
genso on February 27, 2009 at 2:59 PM
Why don’t we just tax oxygen, that’s what it’s coming to, isn’t it? I mean they’re already trying to tax CO2. One element’s just as good as another, right?
jimmy2shoes on February 27, 2009 at 2:59 PM
getalife, you don’t build a nation by taking the producers to the point you take away all incentive to work hard to better yourself. The whole point of taking away the 70% income tax rates from the beginning was to spur on economic growth by inducing the multiplier effect of money. With more money in commerce, it creates growth, induces producers to hire, and jumpstarts the biggest hiring group of all, small business.
The greatest impact from these taxes will be the effect on small business, companies with 20 or less that are 40% of the work force. While larger companies will just pass their tax increases on to the general public (companies are not payers of tax but collectors, as they will pass it on to the consumers and YOU will be the one paying business taxes), smaller businesses will either have to cut down to the bone or go out alltogether.
We are going to fall down a deep, deep hole. It will be impossible to collect these taxes, take this money out of the economy, and expect the taxes revenues to maintain this pace. In 4 years we will wake up from this orgy of taxes with unemployment rates above 9%, the dow still around 6,000-7,000 and crying for a way to spur growth and investment.
And I’ll bet a years pay someone will get the bright idea to cut takes. I just hope it isn’t Mr. Precedent.
itsspideyman on February 27, 2009 at 3:01 PM
Most of the kool-aid drinkers, even with this extra $13/wk, won’t make enough to pay taxes.
MarkTheGreat on February 27, 2009 at 3:01 PM
Ditto.
jimmy2shoes on February 27, 2009 at 3:01 PM
Looks like 20 people showed up for the tea party in DC.
Embarrassing.
getalife on February 27, 2009 at 2:38 PM
The day is coming… Consumer spending is way down, while purchases of guns and ammo are way up… Trust me, Obama stickers are being removed from bumpers across this great nation. The man is going to bring about change we can believe in, only not the type of change I think you Liberals had hoped for. Damage brings about damage control.
Keemo on February 27, 2009 at 3:01 PM
And people wonder why I oppose the War on Some Drugs.
MarkTheGreat on February 27, 2009 at 3:03 PM
Don’t inject Barney Frank into this!
jimmy2shoes on February 27, 2009 at 3:03 PM
The line about what an awesome responsibility it is for him to be our C-in-C was pretty cornball, too.
A self-congratulatory speech given to a bunch of Marines who are prepared to make the ultimate sacrifice is a cheeseball move.
Otis B on February 27, 2009 at 3:04 PM
Liberals tell us that any spending program will stimulate the economy, regardless of what it is spent on.
At the same time they tell as that tax increases have no affect on the economy.
Be a liberal, it beats thinking.
MarkTheGreat on February 27, 2009 at 3:05 PM
Didn’t they try that in Soviet Russia and realized quickly that its actually to their advantage to have a populace that was allowed to drink away their problems. Easier to deal with a drunk than a rebel.
genso on February 27, 2009 at 3:06 PM
getalife on February 27, 2009 at 2:38 PM
I can’t wait to hear your tune in two years.
Otis B on February 27, 2009 at 3:06 PM
This guy is going to give himself a shoulder separation the way he pats himself on the back constantly.
Still wishing his daddy hadn’t left his skank hippie of a mom, do we have to suffer through another President with abandonment issues?
NoDonkey on February 27, 2009 at 3:07 PM
No, it’s quite a rational response to a cheap shot.
Depends on how well concerted speech is protected. Otherwise you’re going to have some frustrated business owners with a god complex but unable to use it.
sethstorm on February 27, 2009 at 3:07 PM
getalife on February 27, 2009 at 2:38 PM
I can’t wait to hear your tune in two years.
Otis B on February 27, 2009 at 3:06 PM
Absolutely Otis B.
itsspideyman on February 27, 2009 at 3:08 PM
OT Story from Drudge:
Hahh-Hahh. Union wages for the convention probably put it over the top.
WashJeff on February 27, 2009 at 3:08 PM
How is asking you to explain a statement a cheap shot? Is it that we aren’t supposed to ask for clarification? However, you need to continue to explain what your definition of concerted speech is and why it should be protected beyond the protection of all speech. Are you saying that the employees should be able to tell the employer how to operate his/her business? If so, as a business owner, that is a very fast track to being fired.
genso on February 27, 2009 at 3:12 PM
Don’t hold your breath. If someone is clueless enough to vote for an unaccomplished marketing creation, and to still support him after seeing what a dangerous incompetent he is, I wouldn’t have much hope in additional doses of reality changing their mind, specially if they believe they will be getting more freebies from the government. At least until the freebies run out. And by increasing taxes, foreign debt and inflation, the dems can keep the illusion going for another 8 years.
neuquenguy on February 27, 2009 at 3:12 PM
The Dow is at 7094, and falling…and Obama finished speaking at Camp Lejeune at what time?
coldwarrior on February 27, 2009 at 3:13 PM
thats right, the new bi-racial MESSIAH can do no wrong..can you dig it??
right4life on February 27, 2009 at 3:15 PM
The Dow is at 7094, and falling…and Obama finished speaking at Camp Lejeune at what time?
coldwarrior on February 27, 2009 at 3:13 PM
genso on February 27, 2009 at 3:15 PM
neuquenguy on February 27, 2009 at 3:12 PM
It’s the short-sightedness of it all that baffles me.
I don’t see how they’ll be able to stretch this out past the mid-terms, but if they do, I think we’ll be pretty well sunk.
Otis B on February 27, 2009 at 3:17 PM
When you take money that is not yours and give it to people who did not earn it, it causes those who earn it to earn less (or hide it) so as not to lose more.
coldwarrior on February 27, 2009 at 3:18 PM
And I might add that this administration’s timing is impeccable in stemming any hope of a rally at the end of every day.
genso on February 27, 2009 at 3:18 PM
coldwarrior on February 27, 2009 at 3:13 PM
Afternoon dump. -104+ now. This admin. has given no reason for buyers to prevent a fall to 6,000. That will be next week’s entertainment.
Cody1991 on February 27, 2009 at 3:19 PM
Almost makes you wonder if it’s intentional, doesn’t it?
jimmy2shoes on February 27, 2009 at 3:20 PM
I have eliminated any doubt of it in my mind.
genso on February 27, 2009 at 3:20 PM
Frankly, I believe it is intentional. Keep the specter of crisis vivid so they can pass more hairbrained legislation. After all, we got to do “something!”
Sometimes, something is doing nothing at all…let the market work on its own…reach equilibrium, proceed from there.
Painful? Yes. So is giving birth.
coldwarrior on February 27, 2009 at 3:21 PM
Or Tennessee…
ladyingray on February 27, 2009 at 3:21 PM
16 hours of labor and a C-section were more fun than this!
ladyingray on February 27, 2009 at 3:22 PM
Speaking as a parent of five…it was worth it in the long run, no?
coldwarrior on February 27, 2009 at 3:23 PM
According to CNBC, investors are changing their strategy for getting out of the market. They were waiting for a rally to get out, but now are just selling. And in a month, all of the funds will face a margin call. There may be a complete failure of the market if it keeps dropping til then.
genso on February 27, 2009 at 3:23 PM
I think it is intentional as well, at this point.
What I can’t figure out is how they think it will recover.
Do they intend to seize funds and place them directly into the market?
Anyone know how this is supposed to play out, if it is in fact planned?
Otis B on February 27, 2009 at 3:24 PM
I think it’s intentional. Then again, this admin. if full of stupid ideologues. They’re playing with fire, not just domestically but on a much wider scale.
Cody1991 on February 27, 2009 at 3:24 PM
Funnier how the people who complained about $400 billion deficits under Bush don’t blink at $2 trillion deficits under Obama.
Chuck Schick on February 27, 2009 at 3:25 PM
At least there is joy at the end of the labor. I see nothing joyous coming out of this.
jimmy2shoes on February 27, 2009 at 3:26 PM
I’m saying that owning a business and having a god complex for it only paints a target on you. That’s part of why we have so much anti-business sentiment right now.
sethstorm on February 27, 2009 at 3:26 PM
C’mon guys, you know this is what happens when we all don’t support our president.
If the comments on this thread were more positive, we’d all be rolling in it, dontcha know?
We’re still rolling in it, but right now it’s more like what pigs roll in.
NoDonkey on February 27, 2009 at 3:27 PM
I have a theory on that. If they can reduce the value of everyone’s investments they will set a new base. Then they raise cap gain taxes so that when the market rebounds over the next few years, there will be higher tax revenues as people get back in to rebuild their savings. Net win for government. The lower the market goes now, the more tax revenue even on a marginal increase in the market.
genso on February 27, 2009 at 3:27 PM
coldwarrior on February 27, 2009 at 3:23 PM
jimmy2shoes on February 27, 2009 at 3:26 PM
My little bundle of joy is all grown up and is a proud member of the USAF! Hell yeah! (as he would say)
ladyingray on February 27, 2009 at 3:28 PM
Absolutely.
So we’ll build an economy over disgruntled people who take no risks and do nothing productive.
We’ll just sue and gripe ourselves into prosperity.
Sounds like a plan. An Obama-nation.
NoDonkey on February 27, 2009 at 3:29 PM
My little bundle of joy is all grown up and is a proud member of the USAF! Hell yeah!
jimmy2shoes on February 27, 2009 at 3:30 PM
You are a sad person who will never be successful in business…even as an lowly employee, which is probably your real problem. The boss just doesn’t see your wisdom, I guess. Of course you know how his business should be run….he just isn’t listening.
genso on February 27, 2009 at 3:30 PM
Everyone selling in this market is unpatriotic!
Chuck Schick on February 27, 2009 at 3:31 PM
jimmy2shoes on February 27, 2009 at 3:30 PM
I will. I’m proud of him and all our military. My niece just graduated from Army NG basic training. I’m afraid it’s just gotten a whole lot tougher (and less safe) for all of them.
ladyingray on February 27, 2009 at 3:32 PM
They have my prayers.
jimmy2shoes on February 27, 2009 at 3:34 PM
the market is RACIST!!
right4life on February 27, 2009 at 3:34 PM
What makes them think that anyone will want to get back in under those rules?
Otis B on February 27, 2009 at 3:34 PM
Not the best, but at least I was unpatriotic when the market was at 8250.
WashJeff on February 27, 2009 at 3:34 PM
Oh, hell… After the libs read that they are gonna’ come back now and ask you for details: like Who’s on first, and What’s on second.
Now ya’ done it.
Yoop on February 27, 2009 at 3:35 PM
ladyingray on February 27, 2009 at 3:28 PM
I just swore my son in to the Navy in October. He’s going to be an AD, an aviation machinist’s mate, working on aircraft engines.
Having the opportunity to swear him in was a great experience.
Otis B on February 27, 2009 at 3:36 PM
What makes them think that raising taxes will spur the economy. I didn’t say it was a good theory, but I can’t for the life of me figure out their end game. They will have to have production and growth to sustain any kind of society. At some point, the market will likely attract investment again, especially if it scales back to 80′s levels.
genso on February 27, 2009 at 3:37 PM
WashJeff on February 27, 2009 at 3:34 PM
We bailed at about the same point.
Otis B on February 27, 2009 at 3:38 PM
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