U.S. District Court Judge Reggie Walton called upon the IRS to defend itself in court on July 11th.
According to the Washington Examiner, IRS lawyers will be asked to explain “why the IRS shouldn’t be required to let an outside expert evaluate whether emails on the computer hard drives of former IRS official Lois Lerner and six colleagues really are lost forever.”
The motion filed seeks an outside computer forensics expert to determine the ability to salvage or not the data apparently lost to a crash. At the very least, the IRS was not following proper laws and procedures to protect information.
“If the IRS’s public statements about ‘recycling’ Ms. Lerner’s hard drive are true, that alone establishes spoliation of evidence that violates federal statutes and regulations, the Federal Rules of Civil Procedure, and professional ethics and responsibility.
Even though the IRS claims it lost all of Lerner’s emails due to a hard drive crash, as least some of those appear at some point to have been archived (the ones from 2009): As reported,
“House congressional investigators have requested emails from 2009 to 2011, when the IRS division led by Lerner began targeting for extra scrutiny Tea Party and other conservative nonprofits applying for tax-exempt status.
The IRS had a contract with email-achiever Sonasoft in effect at least through 2009, according to the website FedSpending.org.
That same year, the company tweeted: “The IRS uses Sonasoft to back up their servers, why wouldn’t you choose them to protect your servers?”
And a document on the company website suggests its system “archives all email content and so reduces the risk of non-compliance with legal, regulatory and other obligations to preserve critical business content.”
However, whether Sonasoft’s government contract extended through 2011 or if the company had the capacity to save every email from such a large agency remains unclear.”
In sworn testimony this morning (Friday, June 20th) IRS Commissioner John Koskinen stated that Obama was told about Lerner’s emails in April. This would be 6 weeks before Congress was told.
“The IRS knew in February, or maybe even in March, and Treasury and the White House knew at least in April — but Congress and the American people didn’t find out until June.”
Congress received a letter from the White House on Wednesday informing them they knew about the emails in April, having been informed by the Treasury Department. IRS head, Koskinen, stated he had seen the letter as well.
“He said his “understanding” is that someone in the IRS general counsel’s office informed someone in the Treasury Department’s general counsel office “that there was an issue and the IRS was investigating.”
The extensive, substantive, and expensive Obamacare changes being made now on a regular basis by President Obama certainly appear to be an unconstitutional, if for no other reason than law changes of that magnitude seem clearly to be Congress’s domain. But the administration argues that these are just minor tweaks needed to ease the implementation of a vast new law. Let’s look at reality.
Government periodically changes tax rules through new legislation. Often, the new laws require clarification concerning how to interpret the law under certain conditions, and the law itself anticipates that the IRS will issue regulations, rulings, or procedures to assist in understanding the law. The President’s Obamacare changes have nothing to do with this, since the President is changing unambiguous, clearly understandable provisions of the law.
Often, especially when new laws reflect a major change from prior law, these new laws require a way to smooth the transition. So when President Clinton phased out exemptions and some deductions for high net-worth individuals, the law provided that only ⅓ of the disallowances would apply for the first year, ⅔ for the second year, and complete disallowances from the 3rd year forward. This is an example of a “transition rule”. It allowed for the substantial effects of the new law to be smoothly integrated into people’s tax lives.
As a CPA, I have to deal with the tax code side of things, and the process that happens with such tax changes is called the “transition rules”. Tedious as it may be, Congress spends a lot of time on these transition rules to get it right.
Having experienced major tax changes such as the 1986 IRC overhaul, and the Bush “tax cuts” of 2001 and 2003, I can say that the transition rules during these times were specific, onerous, and complicated. They particulars were negotiated by Congress down to every last period and exclamation point.
Everyone knows the transition rules are the province of Congress.
So for the President to come out and say that he has the universal right to make tax transition rules, it is laughable — and one of the biggest lies yet. If his advisors did not tell him it is Congress’s role to make transition rules, he should fire all of them for incompetence.
One of the most important things about transition rules is that Congress spends time negotiating in committee and on the floor, the revenue effect of those rules. They are complex and interwoven with the law and focus on the effects of implementing that law. An example might be for Congress to consider whether to make the pain of the law spread out over time, or implemented all at once.
It is absolutely irregular for President Obama to insert himself into law and play with the transition rules willy-nilly. As a CPA, I would demand to see his detailed analysis of the revenue effects of these changes. I am not confident that such an analysis exists.
It is absolutely critical to understand the problem that Obama creates: only Congress is allowed to appropriate revenue, not the President. Therefore, any transition rules changes made by Obama that wreak havoc on the budget lack the proper authority to appropriate extra revenue to cover the effect of such changes.
Today marks the fifth anniversary of the Santinelli Rant on the floor of the Chicago Mercantile Exchange, which spawned the infamous Tea Party (Taxed Enough Already?). Even if you heard it then, it’s definitely worthwhile listening to once more:
The first Tea Party protests subsequently followed on February 27th to protest the American Recovery and Reinvestment Act (ARRA) stimulus bill signed by President Barack Obama on February 17th, 2009.
There is raging debate about whether or not the Tea Party still holds the influence it did during the 2010 Congressional elections as well as whether or not ARRA helped our economy recovery.
“Five years later, the U.S. economy is undoubtedly in a stronger position, thanks to the grit and determination of our nation’s workers and businesses. The economy has now grown for 11 straight quarters, and businesses have added 8.5 million jobs since early 2010. While far more work remains to ensure that the economy provides opportunity for every American, there can be no question that President Obama’s actions to date have laid the groundwork for stronger, more sustainable economic growth in the years ahead.”
At the same time, Obama has more than doubled the public debt. CNS News reported that “the marketable debt of the U.S. government has more than doubled–climbing by 106 percent–while President Barack Obama has been in office, increasing from $5,749,916,000,000 at the end of January 2009 to $11,825,322,000,000 at the end of January 2014”
Errors and omissions (E&O) is the coverage that protects you from another individual or company that wants to hold you responsible for something that you provided which does not give expected results. Does the President have coverage?
There were many statements made last night during the State of the Union that didn’t seem to match up with reality for many Americans. Going through the transcript of the State of the Union, it was easy to point out problems in Obama’s address. Below, I’ve gone through the speech, and outlined in italics the exact words he said used.
Looks like Obama needs insurance! I’m providing the errors and omissions coverage for Obama for the State of the Union he gave to everyday America.
____________ Tonight, this chamber speaks with one voice to the people we represent: it is you, our citizens, who make the state of our union strong.
>>> This chamber speaks with one voice because of the growing (mis)use of Executive Action used, and threatened to be used, by Obama during his Presidency.
Here are the results of your efforts: The lowest unemployment rate in over five years.
>>> It’s the lowest unemployment rate in over 5 years because of the amount of people who have stopped looking for a job. Obama fails to mention that this is also the lowest number of workers in the workforce since the early 1960s.
Our deficits – cut by more than half
>> Deficits have been cut only this year because of non-policy reasons (Large Fannie/Freddie payments to the Treasury in 2012 and accelerated tax transactions at the end of 2012 that count on this fiscal year). Also, we still have had yearly $1 trillion deficits, which was never seen before Obama became president.
And for the first time in over a decade, business leaders around the world have declared that China is no longer the world’s number one place to invest; America is.
>> No, actually this year, America fell out of the top ten list for the first time in twenty years on the Index of Economic Freedom.
In the coming months, let’s see where else we can make progress together. Let’s make this a year of action. That’s what most Americans want – for all of us in this chamber to focus on their lives, their hopes, their aspirations.
>>> Most Americans don’t want Congress to take action for the sake of action. Most people want Congress to get out of the way so that they can make their own destiny.
Today, after four years of economic growth
>>> Economic growth has slowed to a crawl
and those at the top have never done better
>> Those at the top have lost more wealth than any other income bracket and have also seen their taxes rise due to legislation passed during Obama’s presidency
But average wages have barely budged.
>>> Businesses can’t afford to pay their workers more due to excessive regulations, higher taxes, and Obamacare changes — all which have hindered their ability to operate day-to-day and more importantly, plan long-term.
And too many still aren’t working at all.
>>> This is first true statement of the night<<<
So wherever and whenever I can take steps without legislation to expand opportunity for more American families, that’s what I’m going to do.
>>> Bypassing the Constitution is not how American families elected the President to operate.
Opportunity is who we are. And the defining project of our generation is to restore that promise.
>>> Debt is who we are. We can’t restore opportunity with this generation or the next because of the staggering amount of debt — more than $50,000 per man, woman, and child
So let’s make that decision easier for more companies. Both Democrats and Republicans have argued that our tax code is riddled with wasteful, complicated loopholes that punish businesses investing here, and reward companies that keep profits abroad.
>>> Please cite the loophole. American businesses are actually punished with the highest corporate tax rate in the world. They move businesses abroad so that they can keep more of their hard earned money themselves.
But I will act on my own to slash bureaucracy and streamline the permitting process for key projects, so we can get more construction workers on the job as fast as possible.
>>>Is this before or after we start the “Shovel-Ready” projects?
Federally-funded research helped lead to the ideas and inventions behind Google and smartphones. That’s why Congress should undo the damage done by last year’s cuts to basic research.
>>> Federally funded research — like Green Energy companies or NIH “studies”?
Now, one of the biggest factors in bringing more jobs back is our commitment to American energy. The all-of-the-above energy strategy I announced a few years ago is working, and today, America is closer to energy independence than we’ve been in decades.
>> That strategy of subsidizing companies like Solyndra, Satcon Technology, and A123 systems?
One of the reasons why is natural gas – if extracted safely, it’s the bridge fuel that can power our economy with less of the carbon pollution that causes climate change. Businesses plan to invest almost $100 billion in new factories that use natural gas.
>>>While shuttering the coal industry by imposing overreaching and impossible regulations to run them out of business.
Let’s continue that progress with a smarter tax policy that stops giving $4 billion a year to fossil fuel industries that don’t need it, so that we can invest more in fuels of the future that do.
>> Lets continue with a smarter tax policy that stops giving billions of our taxpayer money to subsidize companies that still manage to go bankrupt
And even as we’ve increased energy production, we’ve partnered with businesses, builders, and local communities to reduce the energy we consume.
>>> By taking away our regular lightbulbs
When we rescued our automakers, for example, we worked with them to set higher fuel efficiency standards for our cars. In the coming months, I’ll build on that success by setting new standards for our trucks, so we can keep driving down oil imports and what we pay at the pump.
>>> So that the price of cars goes up for consumers, and so that state legislatures can imposes fees on hybrids and electric cars because they are not bringing in as much revenue from fuel-efficient cars via the gas tax.
But the debate is settled. Climate change is a fact.
>>> It’s Global Warming when it is warm, and Climate Change when it is cold. It must be a polar vortex out there
So let’s get immigration reform done this year.
>>> If you want immigration reform done, try doing it through Congress, not by Executive Fiat.
Two years ago, as the auto industry came roaring back
>>> How did it come “roaring back” again? Cash for Clunkers cost taxpayers money, taxpayers had to bail out the auto industry, and production of the “new” electric cars is sluggish or has stopped altogether
And if Congress wants to help, you can concentrate funding on proven programs that connect more ready-to-work Americans with ready-to-be-filled jobs.
>>>What are these ambiguous and undetailed “programs”, and if they are so “proven”, why are record numbers of Americans still not working?
I’m also convinced we can help Americans return to the workforce faster by reforming unemployment insurance so that it’s more effective in today’s economy. But first, this Congress needs to restore the unemployment insurance you just let expire for 1.6 million people.
>>>99 weeks of unemployment isn’t enough?
Five years ago, we set out to change the odds for all our kids. We worked with lenders to reform student loans, and today, more young people are earning college degrees than ever before.
>>Obama’s reform was that the rates on federal student loans just doubled. And more young people are in debt than ever before just out of college with dismal job prospects — thanks to Obama’s economy.
And as Congress decides what it’s going to do, I’m going to pull together a coalition of elected officials, business leaders, and philanthropists willing to help more kids access the high-quality pre-K they need.
>>> Because or current K-12 education system is already leading the world in education, right, so we can focus on pre-K?
Today, women make up about half our workforce. But they still make 77 cents for every dollar a man earns. That is wrong, and in 2014, it’s an embarrassment. A woman deserves equal pay for equal work.
>>> Unless you work for the White House. Obama’s own White House staff still underpays its women compared to men.
In the coming weeks, I will issue an Executive Order requiring federal contractors to pay their federally-funded employees a fair wage of at least $10.10 an hour – because if you cook our troops’ meals or wash their dishes, you shouldn’t have to live in poverty.
>>> That’s giving Federal Workers a 42% pay raise unilaterally with my tax dollars.
Tom Harkin and George Miller have a bill to fix that by lifting the minimum wage to $10.10. This will help families. It will give businesses customers with more money to spend. It doesn’t involve any new bureaucratic program. So join the rest of the country. Say yes. Give America a raise.
>>> Businesses will not be able to absorb a minimum wage hike of up to 42% without cutting jobs to make up the balance sheet. That will give Americans more unemployment.
And if this Congress wants to help, work with me to fix an upside-down tax code that gives big tax breaks to help the wealthy save, but does little to nothing for middle-class Americans.
>>> Please state the big tax breaks to save? The wealthy pay a 39.6% of their income to the government (not counting state and local taxes) plus the Obamacare surtaxes that started this year, also only for the wealthy. That means they save less of their money because more gets taken in taxes to fund the government.
Send me legislation that protects taxpayers from footing the bill for a housing crisis ever again, and keeps the dream of homeownership alive for future generations of Americans.
>>> Americans footed the bill for the housing crisis in the form of TARP (which Obama voted for as Senator) and ARRA (which Obama signed as President). Obama could have paid the mortgage off for every homeowner in America and still have spent less taxpayer money overall. Talk about economic stimulus and the dream of homeownership!
One last point on financial security. For decades, few things exposed hard-working families to economic hardship more than a broken healthcare system. And in case you haven’t heard, we’re in the process of fixing that.
>>> After we fix the website, the application process, the security holes, and the healthplans…
That’s what health insurance reform is all about – the peace of mind that if misfortune strikes, you don’t have to lose everything.
>>> Not everything. But you can lose your health plan, and you can lose your doctor
Already, because of the Affordable Care Act, more than three million Americans under age 26 have gained coverage under their parents’ plans. More than nine million Americans have signed up for private health insurance or Medicaid coverage.
>>> Signed up means “Placed in the shopping cart”. And millions more have lost their plans and haven’t signed up with Obamacare
And here’s another number: zero. We did all this while adding years to Medicare’s finances, keeping Medicare premiums flat, and lowering prescription costs for millions of seniors.
>>> Here’s another number: Trillions. Obama added trillions to Medicare’s entitlement deficit and trillions to our deficit to pay for Obamacare
So again, if you have specific plans to cut costs, cover more people, and increase choice – tell America what you’d do differently. Let’s see if the numbers add up. But let’s not have another forty-something votes to repeal a law that’s already helping millions of Americans like Amanda. The first forty were plenty. We got it. We all owe it to the American people to say what we’re for, not just what we’re against.
>>> We’ve polled the American people and the majority of the American people are for repealing Obamacare.
That’s why, tonight, I ask every American who knows someone without health insurance to help them get covered by March 31st. Moms, get on your kids to sign up. Kids, call your mom and walk her through the application.
>>> Because the enrollment numbers are so low, the President has to actually beg the American people to sign up, use millions in taxpayer money to run ads, and use Hollywood to promote Obamacare
It should be the power of our vote, not the size of our bank account, that drives our democracy.
>>> We are a Republic, not a democracy, Mr. President
And I know this chamber agrees that few Americans give more to their country than our diplomats and the men and women of the United States Armed Forces.
>>> Obama cares so much for the military that he just announced a 42% pay increase for federal workers, after just making cuts to military pensions.
But I will not send our troops into harm’s way unless truly necessary
>>> Yes, we saw that policy with Benghazi
That’s why I’ve imposed prudent limits on the use of drones – for we will not be safer if people abroad believe we strike within their countries without regard for the consequence.
>>> What about being safer domestically? Obama fails to mention that the first US citizen was killed yesterday via drones because of a dispute over 3 cows that belonged to a neighbor.
That’s why, working with this Congress, I will reform our surveillance programs – because the vital work of our intelligence community depends on public confidence, here and abroad, that the privacy of ordinary people is not being violated.
>>> Translation: If you like your privacy, you can keep your privacy, just like your health plan and doctor.
And it is American diplomacy, backed by pressure, that has halted the progress of Iran’s nuclear program – and rolled parts of that program back – for the very first time in a decade. As we gather here tonight, Iran has begun to eliminate its stockpile of higher levels of enriched uranium. It is not installing advanced centrifuges. Unprecedented inspections help the world verify, every day, that Iran is not building a bomb. And with our allies and partners, we’re engaged in negotiations to see if we can peacefully achieve a goal we all share: preventing Iran from obtaining a nuclear weapon.
>> That’s not what Iran says. Please show us the agreement signed between our two nations. Obama has yet to do that.
And we all continue to join forces to honor and support our remarkable military families.
>>> Obama honors them by making reductions to their pensions and going after military chaplains’ ability to minister to troops
The America we want for our kids – a rising America where honest work is plentiful and communities are strong; where prosperity is widely shared and opportunity for all lets us go as far as our dreams and toil will take us – none of it is easy. But if we work together; if we summon what is best in us, with our feet planted firmly in today but our eyes cast towards tomorrow – I know it’s within our reach.
>>> As Obama reaches for his pen — not to work together under the Constitution, but unilaterally by Executive Order like he stated repeatedly during this address.
Believe it.
>>> As Obama asked us to believe him on Benghazi, the IRS, Fast and Furious, Obamacare, our doctors, and our health plans, to name a few.
God bless you, and God bless the United States of America.
As each day passes, the various facets of Obamacare are getting implemented in order to be fully operational by 2014. And we are beginning to hear about difficulties in the implementation caused primarily by either 1) people or companies trying to avoid the “penalties” or 2) people wanting to pay the penalties in order to avoid having to pay for intentionally overpriced health “insurance”.
In order to achieve adequate and targeted enrollment in Obamacare those representing the Government have begun to be aggressive. They are choosing to use all methods at their disposal to pressure, cajole, and otherwise push people to “do the right thing” and buy the mandated insurance product. Health and Human Services Secretary Kathleen Sebelius has millions now at her disposal to dispatch “navigators” and “in-person assisters” to help enroll more Americans into Obamacare. But the very act of doing so may be rendering Obamacare unconstitutional.
It is worthwhile to remember that the only way in which the law of Obamacare was saved from being declared unconstitutional was the that that there is no penalty associated with Obamacare. It was ruled to be a “tax” derived from not purchasing the mandated health coverage. In reaching his conclusion, Justice Roberts accepted the Administration’s position that there is absolutely no negative interference whatsoever on anyone opting to pay the “tax” rather than buy the product.
Therefore, any attempt by the administration or any of the implementing bodies to pressure, threaten or even imply some sort of wrongdoing by those choosing to not buy insurance would be clearly unconstitutional.
If those implementing Obamacare are properly following the Supreme Court’s mandate, they should be telling prospective insurance purchasers that they should be deciding for themselves whether they would be better off with the insurance or the penalty. We know this is not happening. At the macro level, governors have been hustled to implement the exchanges in their states. And at the individual level, Obamacare officials are pushing for more enrollees to ensure a steady flow of premiums paid by healthy patients in order to cover those who are high-risk and high-cost.
What can be done? If we are vigilant in not allowing individuals and businesses into being compelled to buy Obamacare, can we starve the beast? Are the tactics and funding unconstitutional? If so, Obamacare may just die of its own deficiencies.
There are two important fiscal dates coming up in February: February 12 and February 15.
February 12 is the scheduled date of Obama’s State of the Union speech, which is also Lincoln’s birthday.
It also happens to be three days before the “X Date”, February 15, the estimated date that the Treasury may not be able to pay its bills. The debt ceiling deadline.
Does anyone want to speculate as to whether the President of the United States is going to announce during his State of the Union Address that he will be unilaterally bypassing Congress to raise the debt ceiling?
Picture the all-too-familiar scenario: it’s February 12th, and Congress will be deadlocked over raising the debt ceiling, cutting spending, raising taxes, and sequestration scenarios. We know that there will be no decision by then, because deadlines mean nothing in Congress – as we just witnessed with the fiscal cliff debates running down to the wire.
“In the event that Republicans make good on their threat by failing to act, or by moving unilaterally to pass a debt limit extension only as part of an unbalanced or unreasonable legislation, we believe you must be willing to take any lawful steps to ensure that America does not break its promises and trigger a global economic crisis — without congressional approval, if necessary”
Can Obama do this? That’s up for debate, as both sides of the aisle have given their evidence for or against such a move.
But wait. Does anyone remember the “We Can’t Wait” policy implemented by Obama in the fall of 2011, following the last debt ceiling showdown? The White House describes the program:
“President Obama is not letting congressional gridlock slow our economic growth. Without a doubt, the most urgent challenge that we face right now is getting our economy to grow faster and to create more jobs…. we can’t wait for an increasingly dysfunctional Congress to do its job. Where they won’t act, I will.”
The narrative is being shaped. We have Obama’s program “We Can’t Wait” in place. According to the whitehouse.gov , Obama has issued 45 Executive Orders under this program. Couple the program with Reid’s letter, the time frame for the State of the Union and the potential default of the Treasury, and you have a perfect storm.
Be prepared. Be prepared for Obama to trot out imagery, language and ideas from Lincoln and work them into his State of the Union address as a backdrop to an announcement on the debt ceiling. Obama can, and will, propose that “We Can’t Wait” for Congress to act (or not act) on a potential default – since it is certain they will be gridlocked – and will use an Executive Order lifting the debt ceiling limit. This will change the ensuing discussion on taxes, spending, and sequestration. But will it also change forever the nature and function of the presidency?
In order to understand the magnitude of government spending, debt and fiscal cliff “solutions”, it is helpful to scale down the numbers to more manageable ones that we are more accustomed to. Most citizens cannot properly comprehend the magnitude of the government finances because the amounts with which we are dealing were — at one time — unimaginable.
First, some basic facts:
1. Government annual revenue FY2012 = $2.5T ($2,500,000,000,000)
2. Government annual spending FY2012 = $3.8T ($3,800,000,000,000)
3. Government annual deficit FY2012 = $1.3T ($1,300,000,000)
4. Current total government debt = $16.37T ($16,372,000,000,000)
5. Population of the United States = 314M people (314,000,000)
6. Current total Medicare liabilities (per the Annual Trustees Report) = $42.8T ($42,800,000,000,000)
7. Current total Social Security liabilities (per the Annual Trustees Report) = $20.5T ($20,500,000,000,000)
The best way to visualize the numbers is to reduce each figure by $10 million ($10,000,000 – or 8 zeros). So for instance, $2.5 trillion becomes $25,000 and so forth. Then, we can apply those numbers for a typical family in three parts: 1) Annual Deficit; 2) Current Debt (“Shadow Debt”); and 3) Entitlement (“Future”) Debt. The following scenario will be based on a family of three. And finally, we can see the proposed fiscal cliff solutions and their impact with these scaled down numbers.
2) Current Government Debt (“Shadow Debt”) — think of this as your mortgage, credit cards, etc)
Each citizen share of debt = $163,700/3.14 = $52,000
Citizen share x 3 people (family of three) = $156,000. Current Government Debt for Family = $156K
3) Promised/Future Debt to Pay to Others (Entitlements)
Medicare: $428,000/3.14 = $136,000 per person
Citizen share x 3 = $408,000 for Medicare per family
Social Security: $205,000/3.14 = $65,000 per person
Citizen share x 3 = $195,000 for Medicare per family Total “Promised” Debt for Family of Three = $408,000 + $195,000 = $603,000
How do the Fiscal Cliff plans impact this debt?
Current Obama Plan:
Cut $850B over 10 years, plus add $1.3T in revenue
$850B = $85 Billion a year ($85,000,000,000), or $850 a year (scaled down)
Citizen share of cuts = $850/3.14 = $270 per person; x 3 = $812 a year
$1.3T = $130 Billion a year ($130,000,000,000) or $1300 a year (scaled down)
Citizen share of revenue = 1300/3.14 = $414 a year; x 3 = $1242 in revenue/year
Current Boehner Plan:
Cut $1 Trillion over 10 years, plus add $1 Trillion in Revenue
$1T = $100 Billion a year ($100,000,000,000) or $ 1,000 a year (scaled down)
Citizen share of cuts = $1,000/3.14 = $318 per person; x 3 = $955 a year
$1T = $100 Billion a year ($100,000,000,000) or $ 1,000 a year (scaled down)
Citizen share of revenue = $1,000/3.14 = $318 per person; x 3 = $955 a year
Total Current Financial Picture for a Family of Three
Annual Income: $25,000
Annual Spending: $38,000
Annual Expenses/Deficit per year: $13,000
Current Government “Shadow” Debt: $156,000 (ie. like mortgage & credit cards)
Promised Future Entitlement (SS and Medicare) Debt: $603,000
Therefore, total debt on a mere $25,000 Income is $759,000 PLUS $13,000 in annual added deficits Ask yourself is that even remotely affordable or sustainable? Now multiply that by 10 Million (10,000,000), and you’ll have the real debt numbers for the government.
And those debt “Fiscal Cliff” Solutions for the Family Scenario?
—Obama’s Plan: cuts a mere $812 a year for 10 years and adds $1242 in revenue
— Boehner’s Plan: cuts a mere $955 a year for 10 years and adds $955 in revenue.
Those are not real solutions!
These numbers, brought down to equivalent figures, are a scary and sober reminder about just how deep in debt our country is. And both “solutions” barely make a dent in solving our fiscal crisis. So, what do we do? Where do we go from here? What reforms are needed — both short and long-term?
Class warfare proved to be the winner in this election cycle as it was a key component of Obama’s policies and re-election rhetoric. The components of such a tactic were easily recognized: 1) the political opponent (Romney) will hurt those among us who are most vulnerable (elderly, poor, etc); 2) the political opponent (Romney) does not care about the “middle class”; 3) the political opponent (Romney) wants to benefit those most advantaged (the rich/elite).
The third point of this strategy was the one that resonated most with Obama supporters; he continuously and intentionally railed against “millionaires and billionaires”, and talked about “the wealthy paying their fair share” in order to create a divide and separate that particular fiscal population from the rest of “mainstream America”.
Besides the obvious baseness of such an argument coming from the President of the United States, it is critically important to note the amount of true millionaires and billionaires are so few in number, that taxing them more – as Obama plans to do – will not help with any significant deficit reduction. His assertion was pure dishonest political speech; you cannot possibly create enough revenue from the millionaire/billionaire population even if you were to tax them at 100%. Our fiscal situation is so dire in this country that an increased tax on this group in any large or small amount solves nothing in the long-term.
Unfortunately, none of this mattered to Obama. He intentionally threw the labels around so that they conveniently fit whatever emotive language would coerce voters and supporters to rally behind his outrageous monetary policies. It was classical class-warfare: antagonizing lower socio-economic groups against the “rich”. Simultaneously, he added record numbers of citizens to entitlement rolls, thereby creating a further divide. And it worked to win.
Obama has stated his intent to raise the marginal rates on the top income earners, (aka the “rich”, “wealthy”, or “top 2%”). Yet history shows us that higher tax rates results in less – not more – tax collections. Democrats like to wax poetic about the high rates of 70% and even 91%. What they fail to comprehend or deliberately don’t explain is that at those times, there were an enormous amount of tax shelters such as real estate, so that people could legally lower that taxable income and would not have to actually pay the outrageous tax rates.
With the IRC reforms of 1986, Reagan reduced the tax rates to 28% in exchange for getting rid of the tax shelters. As a result, the amount of federal income collected was more at 28% and a clean tax code than at 91% and tax shelters, because at 28%, it really wasn’t worth the time, cost, and effort to hide money. We need comprehensive tax reform, but not the type that Obama is pushing. His policies of more “tax credits” (which is government spending run through the tax code) and marginal rate increases hampers our recovery. If the federal tax rates are going to rise again – and they will – in addition to state and local tax hikes, the tax burden in this country will be staggering. People will do one of two things: 1) start finding ways not to pay it like they did when the rates were outrageous or 2) stop working and investing so much because it’s just going to get taken away from them. When that happens, the economy worsens — and it is already suffering enough.
Blindly vilifying the rich was simply a tactic Obama used to pit classes against one another for political gain. But putting it into practice? Imposing higher taxes on that segment of the population most able to invest in and aid our recovery is true economic ignorance. Why take additional money from those taxpayers who have been able to create wealth and employment successfully and give it to the government and politicians who have proven their ability to mismanage and squander income? What worked to win the White House, will not work to win the economy back.
