Friday, December 25, 2009

The Real EVIL of the Obama Presidency

All those that seek to have a better world and think Obama is the answer do not realize that what he is out to kill is possibility - their possibility, anyone who isn't already at the peak of political power or financial power. He think that money is evil or at least an enormous threat except in their hands. They damn it. They tax it.

As an end in itself money leaves a person empty. With no end for which to use it - be it his family's future, an invention, a shot for the moon, why bother trying to earn money. But this is just the point. Most people do have ends in mind.

Political power is also an empty game when it has as its end the maintenance of its own power. And this is the phenomenon we are now seeing with the Democrats in Washington. Whatever illustrious value the Democrat Party has had in the past, this is not it. Corrupt to the core, we are seeing them cut off all avenues for their competitors to effectively challenge them. Cutting off the money is key.

The other key areas where people must be dis-empowered if those in power are to maintain their grip is in information and the process of thinking itself, which involves education. There are many other fronts in this battle but Victor Davis Hanson puts his finger on one of them.

What's Behind War Targeting Wannabe Rich?

By VICTOR DAVIS HANSON Posted 12/24/2009 06:17 PM ET

There is class warfare going on in this country — but it's not against the established rich. It's against those who are trying to become wealthy.

President Obama has declared that those who make over $200,000 will pay higher income taxes. Caps on payroll taxes are supposed to come off as well for the upper class. Envisioned estate taxes will take 45% of individual inheritances valued over $3.5 million. Many states have also hiked their income taxes on the upper brackets.

Again, most of those targeted are not the already rich — a Warren Buffett or Bill Gates — but millions of the wannabe rich. They may have achieved larger-than-average annual incomes, but they're not the multimillionaire speculators on Wall Street who nearly wrecked the American economy in search of huge bonuses and payoffs.

Most are instead professionals and small-business owners who take enormous risks in hopes of being well-off and passing their wealth on to their children.

Oddly, much of the populist rhetoric about the need to gouge the newly affluent is voiced by the entrenched wealthy, who don't have to care how high taxes go, given their own vast fortunes.

Take Bill Gates Sr., who is clamoring for higher estate taxes on inheritances. Such advocacy comes easy for him. After all, he is the father of the richest man in the world — someone who clearly needs no inheritance.

Billionaires also often set up charitable foundations to ensure that their estates are channeled to their own preferences rather than simply given over to a needy U.S. Treasury. In contrast, moderately affluent business owners or farmers often leave enough property for their heirs to pay death taxes, but not enough to set up tax-exempt charitable foundations.

Warren Buffett also wants higher income taxes on the wealthy. He once confessed that thanks to all sorts of write-offs, he had paid only about 17% of his gross income in federal taxes, a lower rate than many employees in his office.

But Buffett, like Bill Gates Jr., is worth many billions of dollars. In truth, he has so much money that no amount of taxes would affect him much. A combined tax bite of 60% of his annual income would still leave Buffett each year with millions. Yet the same rate could cripple a business owner making $300,000 in annual income.

Often those in government claim that their higher-taxes proposals are simply targeting the affluent like themselves — proof of their own selflessness. President Obama, for example, has complained that the well-off like him could afford to pay more.

But unlike politicians in Washington, most upscale Americans in private enterprise do not receive free government perks and lavish pensions. Nor are they guaranteed lucrative post-political lobbying and speaking careers.

Focusing tax hikes on those who in some years make between $200,000 and $500,000 makes no sense in a recession for a variety of reasons. They are neither the speculators who caused the panic of 2008 nor the Washington politicians who are bankrupting the country.

Instead, most are small-business owners who hire the majority of the nation's employees. But faced with the talk of higher taxes, more regulations and hostile rhetoric, they will remain confused, and so retrench rather than expand.

With the proposed new income, payroll and health care tax rates, along with increased state and local taxes, many business owners fear that 60% to 70% of their income will go to the government. That does not seem a good way to persuade small businesses to hire more workers in hopes of greater rewards.

Income is also not the only barometer of affluence. Two-hundred thousand dollars is quite a lot of annual money in Kansas, but does not always go so far in San Jose, where modest houses often cost well over half a million dollars. For those whose children do not qualify for need-based scholarships, a private liberal-arts education can easily set a parent back $200,000 per child over four years.

Why the war against the productive classes who want to be rich?

Maybe it is because they are not as numerous as the proverbial middle class. Perhaps they do not earn our empathy that is properly accorded to the poor. They surely lack the status and insider connections that accrue to the very rich.

Yet continue to punish and demonize them, and the country will grind to a halt — as we are seeing now.

1 comment:

Robert said...

I think the rich are harmed by high taxes.
If you tax businesses too high you are making their ability to plan for the future more difficult and you are taking from the businessman the money he/she needs in order to hire people and produce. If you assume a direct relationship between taxes and jobs you can see the impact of taxes on future production. As a general rule, for every $100K of taxes paid by a company (approximately) the company is costing the economy 1 job (this includes about $40K for training and purchasing the equipment and support services needed to perform the job). Likewise for taxes on rich individuals. For every $100K he/she pays in taxes, you are removing 1 productive job. This is why job losses were the first thing to happen when Obama started his spending spree. It was not as much Bush's fault as it was the removal of trillions of dollars from the economy and the diversion of these dollars to non-productive means.
Now divide $1 Trillion by $100K and you get 10M jobs lost. When you consider that a lot of the money allocated to stimulus bills has not been spent, you can see why businesses are refusing to invest in the future and why banks are afraid to lend money.
There is only one solution to this: the government should stop deficit spending and give the people their money back. Then you will see a massive improvement in the economy and a return to growing job numbers.