O is most forward about taxing the "rich". The taxes is his new budget go beyond what he proposed on the campaign trail. There is a merciless logic to this. With his new tax cuts, less than half the country pays any income tax so it is easy to promise new government services without raising taxes on the majority. By classifying professionals and middle-tier executives as rich, O implies that these people don't deserve all of the money that they currently make so it is just for the government to redistribute it. This is questionable logic at the best of times. During a recession it is only likely to make the downturn worse.
But O has a lot of hidden taxes that will affect everyone, the poor more than the rich.
One of the tax increases on the rich is cutting the credit that they get for charitable contributions. This will hurt charities instead of the rich. If you take away the tax incentives to donate then people will simply stop donating.
O has a new charge for carbon emissions. The details of how this will be implemented have not been released but it does not matter. These new fees will be added to the cost of producing electricity along with some heavy industry like steel production. These fees will amount to hundreds of billions. The poor will feel this the hardest since a larger portion of their income goes to paying for utilities.
Your wireless phone plan will cost more, too. The mobile carries thought that they bought the rights to this spectrum but O wants to add a new levy on using them. This will start out at $50 million this year per company, $200 million next year, and top out at $550 million for a total of $5 billion over the next decade. This will be added to your monthly phone bill.
Even with these new taxes O only promises to cut the deficit in half in the next four years. Since he nearly doubled the deficit that Bush left him, that will still be an astounding trillion dollars a year for the foreseeable future. This is unsustainable spending. People are beginning to speculate on the US defaulting on its debt. So far this is not considered a huge risk but we are already rated as being a bigger risk than Japan or Germany. If this fear grows then we will be unable to sell treasury bills or have to sell them at a much higher interest rate. Either one will cause unimaginable trouble to the economy. If we cannot sell our bonds then we will have to print new money to pay our debts which will trigger inflation rates that we haven't seen since the 1970s. If our bonds go for a higher rate then we will see interest rates jump sky-high which will also trigger a round of inflation. Either way, people on adjustable-rate mortgages will see their payments jump and trigger a new round of foreclosures and bank problems.
Economists have been saying that it would be crazy to raise taxes during a recession. O seems to be banking on his stimulus to fix the economy so fast that new taxes are not a problem.
Obama is being audacious. Unfortunately, this is not a good quality in a president:
1. Fearless daring; intrepidity.
1. Fearless daring; intrepidity.
2. Bold or insolent heedlessness of restraints, as of those imposed by prudence, propriety, or convention.3. An act or instance of intrepidity or insolent heedlessness: