Obama's Fuzzy Tax Math
I'm still recovering from having served a two-week sentence in Chicago – in February. After much consideration, I've decided I need a new booking agent.
I've read through many of the State of the Union that really wasn't the State of the Union reviews. Obama spent a good deal of time throwing numbers and figures around whilst engaging in a revision of automotive history for which W would have been laughed off the lectern. While Henry Ford may have invented the automobile assembly line, it was a German that actually invented the horseless carriage. His name escapes me at present.
The problem with playing fast, loose, and furious with figures is eventually somebody with a big brain comes along with a spreadsheet and starts checking your math. Well, the guys with the green eye shades over at the Wall Street Journal have gotten out their slide rules and taken Obama to task on some of his soaring and baseless rhetoric. I highly recommend reading the whole thing, but I'll give you some of the best graphs with my emphasis added.
On Obama's "read my lips" pledge that anyone making $250 large or less will not see "one dime" in tax increases:
On soaking the richest 2% of Americans to fund his reckless expansion of an already bloated government:
This is going to be some trick. Even the most basic inspection of the IRS income tax statistics shows that raising taxes on the salaries, dividends and capital gains of those making more than $250,000 can't possibly raise enough revenue to fund Mr. Obama's new spending ambitions.
During the campaign, Obama's definition of "wealthy" slide from $300 large all the way down to $150 large. I don't think it's presumptuous of me to say there are those in Congress – The Pelosi, Barney Frank, Maxine Waters, etc. – who have a much lower "wealthy" threshold than does Obama. As we've already seen, Barry is more likely than not to acquiesce to them than they are to him. It's his way of voting "present".
Note that federal income taxes are already "progressive" with a 35% top marginal rate, and that Mr. Obama is (so far) proposing to raise it only to 39.6%, plus another two percentage points in hidden deduction phase-outs. He'd also raise capital gains and dividend rates, but those both yield far less revenue than the income tax. These combined increases won't come close to raising the hundreds of billions of dollars in revenue that Mr. Obama is going to need.
So, the WSJ guys ran some experimental numbers on what threshold would be necessary to meet the $4 trillion budget Team Obama plans to spend in Fiscal Year 2010 (which starts on October 1, 2009). Here's what they came up with:
Simply put, Obama's math doesn't add up. NRO's CampaignSpot blogger Jim Geraghty has coined the phrase that "all statements made by Barack Obama come with an expiration date. All of them."
Even taking every taxable "dime" of everyone earning more than $75,000 in 2006 would have barely yielded enough to cover that $4 trillion.
Fast forward to this year (and 2010) when the Wall Street meltdown and recession are going to mean far few taxpayers earning more than $500,000. Profits are plunging, businesses are cutting or eliminating dividends, hedge funds are rolling up, and, most of all, capital nationwide is on strike. Raising taxes now will thus yield far less revenue than it would have in 2006.
The bottom line is that Mr. Obama is selling the country on a 2% illusion. Unwinding the U.S. commitment in Iraq and allowing the Bush tax cuts to expire can't possibly pay for his agenda. Taxes on the not-so-rich will need to rise as well.
Check your wallet, dear reader. You've probably got milk in your refrigerator that will last longer than Obama's "not one dime" pledge will.
Check my math. Is $208,850 still less than $250 large?
Here endeth the lesson.
The Parable of Plan Porkulus
After having read much of the commentary surrounding Team Obama's full court press to pass the non-simulative, pork laden, sorry excuse for an economic recovery plan, I've only become more frustrated by what passes for solid economic action these days.
But I digress.
Therefore, on a more lighthearted note, I've decided to share with you the Parable of Plan Porkulus. It's not entirely an original work. Unlike our current Vice-President, I did not entirely plagiarize someone else's work – I only paraphrased it to make my point. Enjoy!
In the beginning was the Election. In the face of the Election, the MSM looked out upon the firmament and said "Let there be Obama!"
And there was Obama. And Obama lacked substance.
"Be ye not concerned," said the MSM, "for what he lacks of substance we will make up for with style".
And it came to pass that the nation's marketplace became troubled and there was much concern among the people. The people, therefore did look to Obama for further light and knowledge in the form of a Plan.
Therefore, Obama did sit in the Oval Office and thought to himself "I have not the economic sense that God gave the turtle. Let me go henceforth and seek out the counsel of the Treasury."
And Obama did walk across the street to the Treasury and, upon seeking counsel, heard this lament from those who dwelt therein: "Behold, the One, we have not a viable Plan for the SECTREAS knows not how to navigate TurboTax without being beguiled by the very tax code he seeks to enforce. Wherefore seek thou counsel elsewhere."
Being much perplexed, Obama did journey to Capitol Hill whereupon he met with The Pelosi and Harry of the Barren Desert. "Behold," he cried, "I am the One heretofore prophesized by Oprah! I won the Election! Create thee with thy minions, therefore, a Plan whereby our Party can beguile the Nation unto the convincing of the People that peace and prosperity can only be accomplished through the merciful actions of a kind and gentle government."
Thus did The Pelosi and Harry of the Barren Desert descend into the smoke filled caverns of Capitol Hill and did work mightily into the night to create Plan Porkulus. In the morning The Pelosi did stand before the MSM and the evil Republicans and did boldly declare the need to pass Plan Porkulus lest another 500 million jobs be sacrificed upon the economic alter.
And it came to pass that the Republicans did look upon Plan Porkulus in all its obesity and did offer their opinions unto the People and the MSM: "It is a crock of s**t and it stinketh for behold its simulative value is without form and it altogether lacks substance."
The MSM did speak unto the people, basking in the afterglow of the Election and also having been recently in the presence of The One and did say "It is a container of a vital growth promoting substance with an interesting odor. Nevertheless, as it has been blessed by The One we find it to be fascinating and of good report."
The Wall Street Journal did look upon Plan Porkulus, and being more polite than House Republicans, did say "It is a container of excrement with an odor that few can tolerate."
Wherefore did Harry of the Barren Desert take upon himself the mantle of Plan Porkulus, boldly declaring that "It contains that which aids plant growth and it is indeed strong."
SlowJoe Biden did also look upon Plan Porkulus and did say "It is a powerful promoter of growth, but there is still a 30% chance we'll be screwed."
Wherefore The One did extend his mighty hand and venture forth among the People and the assembled worshipping throngs of MSM reporters. He did suffer the poor and downtrodden to come unto him along with the disgruntled fast food workers all the while proclaiming "This plan will greatly stimulate the growth and efficiency of this country."
Thus did The Pelosi, Harry of the Barren Desert, and their minions declare in one voice "This is a good plan!"
And Plan Porkulus became law.
This is how s**t happens.