On the most critical issue of his presidency – the long-term fiscal sustainability of the United States, Barack Obama just voted “present”.
Today Obama delivered a mind numbing budget that includes $26.3 trillion in NEW debt over the next decade. 2011 will see the biggest one-year debt jump in history, or nearly $2 trillion, to reach $15.476 trillion by Sept. 30, the end of the fiscal year. That would be 102.6 percent of GDP – the first time since World War II that dubious figure has been reached. On top of this, Obama plans on strapping our families with a ten-year, $1.5 trillion tax hike.
Jake Tapper of ABC stated today that “At no point in the president’s 10-year projection would the U.S. government spend less than it’s taking in….The plan shows that Obama will not take the lead on any aggressive measure to eliminate the nation’s $14 trillion debt.”
Under the Obama budget, tax revenues will grow from 14.4% of GDP in 2011 to 20% of GDP in 2021. By comparison, the historical average is only 18% of GDP.
- Raising the top marginal income tax rate (at which a majority of small business profits face taxation) from 35% to 39.6%. This is a $709 billion/10 year tax hike
- Raising the capital gains and dividends rate from 15% to 20%
- Raising the death tax rate from 35% to 45% and lowering the death tax exemption amount from $5 million ($10 million for couples) to $3.5 million. This is a $98 billion/ten year tax hike
- Capping the value of itemized deductions at the 28% bracket rate. This will effectively cut tax deductions for mortgage interest, charitable contributions, property taxes, state and local income or sales taxes, out-of-pocket medical expenses, and unreimbursed employee business expenses. A new means-tested phaseout of itemized deductions limits them even more. This is a $321 billion/ten year tax hike
- New bank taxes totaling $33 billion over ten years
- New international corporate tax hikes totaling $129 billion over ten years
- New life insurance company taxes totaling $14 billion over ten years
- Massive new taxes on energy, including LIFO repeal, Superfund, domestic energy manufacturing, and many others totaling $120 billion over ten years
- Increasing unemployment payroll taxes by $15 billion over ten years
- Taxing management capital gains in an investment partnership (“carried interest”) as ordinary income. This is a tax hike of $15 billion over ten years
- A giveaway to the trial lawyers—not letting companies deduct the cost of punitive damages from a lawsuit settlement. This is a tax hike of $300 million over ten years
- Increasing tax penalties, information reporting, and IRS information sharing. This is a ten-year tax hike of $20 billion.
- The “tax relief” in the budget is mostly just an extension of present law, and also some refundable credit outlay spending in the tax code. There is virtually no new tax relief relative to present law in the President’s budget.
The “tax relief” in the budget is mostly just an extension of present law, and also some refundable credit outlay spending in the tax code. There is virtually no new tax relief relative to present law in the President’s budget.
because this president is too weak, too cautious, too beholden to politics over policy to lead. In this budget, in his refusal to do anything concrete to tackle the looming entitlement debt, in his failure to address the generational injustice, in his blithe indifference to the increasing danger of default, he has betrayed those of us who took him to be a serious president prepared to put the good of the country before his short term political interests. Like his State of the Union, this budget is good short term politics but such a massive pile of fiscal bull***t it makes it perfectly clear that Obama is kicking this vital issue down the road.
To all those under 30 who worked so hard to get this man elected, know this: he just screwed you over. He thinks you’re fools. Either the US will go into default because of Obama’s cowardice, or you will be paying far far more for far far less because this president has no courage when it counts. He let you down. On the critical issue of America’s fiscal crisis, he represents no hope and no change. Just the same old Washington politics he once promised to end.
With ice water in his veins, the president is still able to stand before his teleprompter and declare that the “government must live within it’s means, and start taking responsibility for it’s deficits.” Faced with a president and congress more than willing to strap your children and grandchildren with debt, high taxes and a dire economy caused by THEIR glutenous spending, it will take a miracle for us to turn this great nation around. We can start by sending Obama to the unemployment line in 2012.