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Yes American Middle-Class, Barack Obama Will Raise Your Taxes

by @ 10:17 am on August 29, 2009. Filed under Barack Obama, Economics, Politics

Today’s Washington Post provides the latest evidence that the Obama Administration is laying the ground work for a middle-class tax hike:

During last year’s campaign, President Obama vowed to enact a bold agenda without raising taxes for the middle class, a pledge budget experts viewed with skepticism. Since then, a severe recession, massive deficits and a national debt that is swelling toward a 50-year high have only made his promise harder to keep.

The Obama administration has insisted that the pledge will stand. But the president’s top economic advisers have refused to rule out broad-based tax increases to close the yawning gap between federal revenue and government spending and are warning of tough choices ahead.

(…)

Obama, meanwhile, has vowed to pay for any new initiatives and to draft an overhaul of the health-care system that eventually would save the government money, driving deficits down. But effective health reforms would take decades to produce savings. In the meantime, White House budget director Peter R. Orszag acknowledged, “there are additional steps that will be necessary.”

“The administration is very concerned about these [future] deficits, and getting those deficits under control is a top priority of the administration,” Orszag told reporters this week as he rolled out a new economic forecast that added $2 trillion to deficit projections from 2010 to 2019.

Treasury Secretary Timothy F. Geithner and White House economic adviser Lawrence H. Summers have both delicately sidestepped the tax question on Sunday talk shows. Orszag has also refused to discuss what steps Obama might take to reduce the deficit in the budget blueprint he will present to Congress in February. But budget analysts say he has few real options.

“If you rule out inflating our way out of the problem and defaulting on the debt, there are two ways: Cut spending or raise taxes,” said William G. Gale, an expert on fiscal policy at the Brookings Institution. With more than 80 percent of federal spending devoted to politically untouchable programs such as Social Security, Medicare and Medicaid, he said, “it’s going to be really hard to make significant headway on the spending side. So that means you’ve got to think about taxes.”

And, it won’t necessarily take a new piece of legislation for the tax hikes to occur:

Obama could raise taxes without taking any legislative action. If he let all the Bush tax cuts expire next year and refused to enact legislation to restrain the alternative minimum tax, deficits would be about $200 billion a year lower and the debt would stop growing as a percentage of the economy, according to Gale’s analysis of new data from the nonpartisan Congressional Budget Office. But that would mean big tax increases for most American families, violating Obama’s pledge.

Just in time for the 2012 elections, interestingly enough……..

Much like George H.W. Bush, Barack Obama could come to regret his “Read My Lips” Moment.

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10 Responses to “Yes American Middle-Class, Barack Obama Will Raise Your Taxes”

  1. [...] MATACONIS: Yes, American Middle Class, Barack Obama Will Raise Your Taxes. “Much like George H.W. Bush, Barack Obama could come to regret his ‘Read My Lips’ [...]

  2. Heavy C says:

    “If he let all the Bush tax cuts expire next year…”

    And this will result in one more “don’t blame me, this is W’s fault” moment.

  3. Koblog says:

    If (actually, when) Obama raises taxes via this stealthy “letting Bush cuts expire” manner, deficits will rise and tax income will (continue to) fall.

    When productive people are punished, the government gets less.

  4. Koblog says:

    “If he let all the Bush tax cuts expire next year and refused to enact legislation to restrain the alternative minimum tax, deficits would be about $200 billion a year lower and the debt would stop growing as a percentage of the economy…”

    This defective assumptive analysis always assumes nothing else changes. It assumes everyone still has the same job, makes the same money or more and will continue to pay taxes.

    This downturn has clearly shown that tax receipts go down when people are unemployed. Duh.

    When taxes go up, people will spend less, more businesses will fail, more unemployment will happen, fewer people will be paid, less taxes will be collected, more people will be on unemployment insurance, causing deficits to rise.

    The only answer is to let businesses prosper. But to Obama those entities are greedy and evil. It’s not in Obama’s DNA to be pro-business.

  5. Boglee says:

    Only a total retard could believe that taxes would not have go up to finance Obama’s reckless spending, and yet……

  6. MarkJ says:

    Question: What will be U.S. national sport in 2012?

    Answer: Tax evasion.

    I hope President Zero is already scouting around for “that perfect retirement villa” in Cannes because, if he’s actually stupid enough to break his middle-class tax pledge, he’s political D.E.A.D.M.E.A.T.

  7. Boghie says:

    The real enjoyable tax event that will happen if President Obama elects to allow the Bush tax changes to simply retire…

    The ‘Marriage Penalty’ will be reinstated.

    That WILL BE a MASSIVE TAX INCREASE on the middle class.

  8. Jeff says:

    Obama has already raised more than at least 10 billion in new taxes on the middle and lower class with his new increased federal cigarette tax … so promise broken already …

    Jeff Carlson
    http://www.harlemghost.blogspot.com

  9. Urbin Report says:

    Obama’s Read My Lips moment is on its way…

    It seems that someone at CNN has finally done that math on our Dear Leader’s programs and figured out what the rest of us did before the election.
    He’s going to jack taxes through the roof.
    Ace points out some highlights of the article:
    ……

  10. looking closely says:

    Of course Obama violated his pledge not to raise taxes on low-earners his very first month in office, when he dramatically raised the Federal cigarette excise tax.

    Since smokers are disproportionately poor, this was a regressive tax increase, hitting the poorest Americans hardest. A typical pack-a-day smoker can expect to cough up over an additional $220 per year in cigarette taxes from this increase alone.

    Next, Obama’s claim that he wasn’t going to raise taxes on anyone making under $250k per year simply wasn’t credible on its face.

    The majority of American households own stocks, either directly, or indirectly via 401ks or similar retirement plans, with the overwhelming majority of these households earning less than $250k per year.

    By extension the majority of American households will get hit directly or indirectly by any expiration of the Bush tax cuts, via increased taxes on capital gains and dividends. Some of them won’t see the “hit” since the money won’t be coming directly out of their paychecks, but the effect will still be less net worth in their retirement accounts.

    One group that will see the money coming right out of their bank accounts will be older retired individuals who are relying on dividend-paying stocks to make a steady income. These “widows and orphans” investors (yes, that’s actually what they are called), will be hurt badly, because not only will their dividend income be cut, but the value of the underlying securities will also go down as dividend-paying stocks will become worth less under a higher-dividend tax regime.

    Blaming these sorts of tax increases on expiration of Bush’s tax cuts may be literally true, but politically disingenuous. Obama campaigned on permitting the Bush tax cuts to expire and he can’t disown the results if he lets it happen. If it happens on his watch, he’ll be responsible for the political (and economic) consequences.

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