Stmarie’s Weblog

2012 Election Information

Barack Obama and the Tax Tipping Point October 23, 2008

Here is an article that was written by Adam Lerrick a professor at Carnegie Mellon University.

Adam Lerrick a professor at Carnegie Mellon University

Article displayed below:

Obama and the Tax Tipping Point

Additional articles by economists showing how damaging Barack Obama will be to the United States of America.

The Obama Tax Hike

On Dividend Taxes, It’s a Post-Partisan Race

Keep in mind that this article like so many other articles that show the flawed ideology of Barack Obama are written by economic scholars and not Marxist/Socialists dictators that promise Utopia.

If Barack Obama can present an advanced degree in Economics and all of his papers that he (Barack Obama) has published over the years then he may be far more creditable than just a golden tongued Marxist Dictator pronouncing that Socialism is the answer.

Here are the things that Barack Obama will accomplish if he is elected.

1. Barack Obama will greatly diminish the ability for anyone to save any money either through savings or investing as a huge amounts of money earned will go to the IRS.

2. Barack Obama will greatly reduce the incentive to work as individuals will to look to see how much of their paycheck and saving are being taken by The IRS and they can make more money by being unemployed with Marxist/ Socialist distributions.

3. Barack Obama will discourage companies from growing as they know that success will lead them to be subject to any “Windfall Profits” tax that the Marxist Socialist want to impose.

4. Barack Obama will create a shrinking job market. As companies pay more and more taxes they will hire less and less people to maintain any kind of reasonable profit margin.  People will work much harder for longer hours and any kind of comfortable lifestyle will be stripped from the American Worker.

5. Barack Obama will chase any company that is subject to “Windfall Taxes” off shore greatly reducing the number of jobs in the United States.  This will be primarily in the manufacturing sector but will apply to the service sector also.

6. Barack Obama will greatly exacerbate the growing number of “Working Poor” that will become extremely dependent on Marxist Socialism support. As these number grow it will only mandate even higher taxes to offset the spending load of the Marxist/ Socialist Utopia that was promised to the people that elected Barack Obama in the year 2008.

This is a very compelling article for anyone  to vote for anyone other than Barack Obama.

“What happens when the voter in the  exact middle of the earnings spectrum receives more in benefits from  Washington than he pays in taxes?

Economists Allan Meltzer and Scott Richard  posed this question 27 years ago. We may soon enough know the answer.

Barack Obama is offering voters strong incentives to support higher  taxes and bigger government. This could be the magic income-redistribution  formula Democrats have long sought.

Sen. Obama is promising $500 and $1,000 gift-wrapped packets of money  in the form of refundable tax credits. These will shift the tax demographics  to the tipping point where half of all voters will receive a cash windfall  from Washington and an overwhelming majority will gain from tax hikes and more  government spending.

In 2006, the latest year for which we have Census data, 220 million  Americans were eligible to vote and 89 million — 40% — paid no income taxes.

According to the Tax Policy Center (a joint venture of the Brookings  Institution and the Urban Institute), this will jump to 49% when Mr. Obama’s  cash credits remove 18 million more voters from the tax rolls. What’s more,  there are an additional 24 million taxpayers (11% of the electorate) who will  pay a minimal amount of income taxes — less than 5% of their income and less  than $1,000 annually.

In all, three out of every five voters will pay little or nothing in  income taxes under Mr. Obama’s plans and gain when taxes rise on the 40% that  already pays 95% of income tax revenues.
The plunder that the Democrats plan to extract from  the “very rich” — the 5% that earn more than $250,000 and who already pay 60%  of the federal income tax bill — will never stretch to cover the expansive  programs Mr. Obama promises.

What next? A core group of Obama enthusiasts — those educated  professionals who applaud the “fairness” of their candidate’s tax plans —  will soon see their $100,000-$150,000 incomes targeted. As entitlements expand  and a self-interested majority votes, the higher tax brackets will kick in at  lower levels down the ladder, all the way to households with a $75,000  income.

Calculating how far society’s top earners can be pushed before they  stop (or cut back on) producing is difficult. But the incentives are easy to  see. Voters who benefit from government programs will push for higher tax  rates on higher earners — at least until those who power the economy and  create jobs and wealth stop working, stop investing, or move out of the  country.

Other nations have tried the ideology of fairness in the place of  incentives and found that reward without work is a recipe for decline. In the  late 1970s and throughout the 1980s, Margaret Thatcher took on the unions and  slashed taxes to restore growth and jobs in Great Britain. In Germany a few  years ago, Social Democrat Gerhard Schroeder defied his party’s dogma and  loosened labor’s grip on the economy to end stagnation. And more recently in  France, Nicolas Sarkozy was swept to power on a platform of restoring  flexibility to the economy.

The sequence is always the same. High-tax, big-spending policies force  the economy to lose momentum. Then growth in government spending outstrips  revenues. Fiscal and trade deficits soar. Public debt, excessive taxation and  unemployment follow. The central bank tries to solve the problem by printing  money. International competitiveness is lost and the currency depreciates. The  system stagnates. And then a frightened electorate returns conservatives to  power.

The economic tides will not stand still while Washington experiments  with European-type social democracy, even though the dollar’s role as the  global reserve currency will buy some time. Our trademark competitive  advantage will be lost, and once lost, it will be hard to regain. There are  too many emerging economies focused on prosperity and not redistribution for  the U.S. to easily recapture its role of global economic leader.

Tomorrow’s children may come to question why  their parents sold their birthright for a mess of “fairness” — whatever that  will signify when jobs are scarce and American opportunity is no longer the  envy of the world.”


Mr. Lerrick is a professor of economics at Carnegie Mellon  University and a visiting scholar at the American Enterprise  Institute.

Bob Barr for President 2008

I voted today. Did you?

ST

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2 Responses to “Barack Obama and the Tax Tipping Point”

  1. rrichardson Says:

    Please vote for Bob Barr, the Libertarian Party candidate for president.

    Why vote for McCain? He voted for the bailout, just like Obama. And both McCain and Obama voted for US government investment in big commercial banks, which is socialist, Socialism, maybe even Communism. Why not send a message to both parties that it is time to vote on principles? Why not? YES, we should!

    Only Bob Barr is moral enough and conservative enough to deal with the issue of housing, Wall Street, and the rest of the current mess. He has not taken a cent from Fannie or Freddie or from any of the Wall Street firms that profit from the bailout. And Bob Barr has the support of Rep. Ron Paul, who did so well in the Republican primary debates.

    Here’s Bob’s Web site: http://www.bobbarr2008.com/

  2. stmarie Says:

    Thanks RR.

    I voted for Bob Barr today. I really think that the country will be shock when they find out how many votes Bob Barr will get. I also have officially changed my party affiliation to Libertarian. I was actually inspired to look at the the Libertarian party by two ex Democrats that were so disappointed that Barack won over Hillary. They also have realized the corruptness that Barack Obama will bring to the presidency.

    ST


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