Major Tax Hike on the Way

Here's the headline: "Obama's First Budget Seeks To Trim Deficit". How nice. We wouldn't want to put the words "higher taxes" in a headline about Obama, now would we?

Obama is planning to raise taxes on the "wealthy" and businesses. Apparently Obama has forgotten that we are in a recession. The administration has announced a White House summit on "fiscal responsibility." I wonder if Obama has to stop himself from laughing out loud when he says that phrase, considering he just signed the most fiscally irresponsible bill in our nation's history.  

Serious investors (i.e. those making over $250,000) will see their capital gains tax raised from 15-20% - that should really help the stock market, which has already dropped 10% in the month since Obama took office. Capital gains taxes reduce the incentive to invest. Investing is already a scary prospect - now investors have another huge reason to sit on their money, instead of using it to create jobs. Obama plans to raise total taxation by 19%. Considering the times we are in, this is economic malpractice.

As I've noted many times on this blog - taxes on corporations and small businesses hurt everyone - they don't just punish big bad business and people dressed like the Monopoly Man. Those taxes are passed down to you and I in the form of higher prices. Higher prices mean decreased demand for those goods and services, which means the companies have to lay more people off - maybe even you. 

If Obama really cared about the deficit, he wouldn't have signed a bill loaded with hundreds of billions in pork projects for Democrats in the House and Senate. This is all part of a plan to advance his health care agenda which will further erode our economy, reduce economic freedom, and introduce us to government-rationed health care. 

47 Million Uninsured

Obama's health care plan is a well disguised march toward socialized medicine, as I wrote earlier. When this debate begins to heat up sometime next year, the media will be sure to beat us over the head with the "47 million uninsured" line. Let's break down these 47 million people.

• 10 million are not U.S. citizens.
• 8.3 million make between $50,000 and $74,999.
• 8.7 million make over $75,000.
• 45% (21 million) will be insured within 4 months. There are always people between jobs who are counted as uninsured.
• 15 million already qualify for existing government health care.
  

17 million who can afford health insurance but choose not to purchase it + 15 million who only need to sign up for government health care they already qualify for + 10 million non-citizens = 42 million. Out of the additional 5 million, 2 million or more will have insurance in the next four months.

Really we're talking about 3 million people or 1% of the population. This is not a crisis requiring a massive government takeover of 1/7 of our economy. Allowing people to buy health coverage across state lines would allow many more people to afford health care without higher taxes and government intrusion. For example, the average premium for family coverage in America is about $5,800. In New York the average is $12,250 because of over regulation. It is currently illegal for a New Yorker to buy cheaper health insurance from out of state and the President-elect is opposed to any legislation that would change this situation.

95%

*Updated*

Obama claims that he will cut taxes for 95% of Americans. When confronted with the fact that more than 30% of Americans don't pay any income taxes (15% more very little) and that this would require checks to be sent to these people, he modified the plan to include a "work requirement," as if it makes sense to send welfare checks (paid for by someone else, against their will) to people as long as they are working. Obama's "tax calculator" ad claims to show your tax cut under his plan vs. John McCain's. It shows no tax cut under McCain's plan for anyone making less than $250,000. This is a complete falsehood, equal to the Obama's other lies like associating McCain with Hispanic slurs, cutting Medicare and cutting Social Security.

McCain's health care plan provides a big tax cut for all Americans. Obama and Biden have done their best to distort the plan, but every independent analysis of the plan has shown that it benefits 95% of Americans. The plan provides a $5,000 tax credit to everyone who wants to buy their own health plan. A tax credit is different than a deduction. If you owed $10,000 in taxes, but bought your own health plan, you would now owe $5,000. Isn't that a tax cut?

Obama says this plan will cause people to lose their employer based insurance, but that's kind of the point. Obama either doesn't understand economics or is being intentionally misleading. Your health insurance from your employer is part of your compensation. Your total compensation is based on the value of your work to your employer and the availability of workers with comparable skills. McCain's plan would encourage many people to choose to get all of their compensation in cash and then buy their own health insurance. They would get an increase in take home pay and a tax cut.

More importantly, the Bush tax cuts are set to expire in 2010. Then 100% of people that pay income tax will get a tax increase, though Obama doesn't see it that way - he considers it the end of a tax cut. Don't you see the difference. McCain would extend the Bush tax cuts and he would eliminate the Alternative Minimum Tax, which would save working families with children ensnared by the AMT an average of $2700 a year.

Obama has also proposed raising the payroll taxes for anyone making over $94,700 a year and would raise capital gains taxes from 15% to 20%, a substantial tax increase for the 50% of Americans who own stock. And let's not forget his new taxes on businesses, which will be passed down to you through higher prices.

I guess the calculator missed a few things.

McCain's Healthcare Plan

Obama and Biden have been distorting McCain's health care plan both in the debates and in commercials. Obama says it will be a net tax on you and that you'll be less likely to have insurance. This is absolutely false.

The average employer contribution to family coverage is $9,325. Everyone with employer contributions under $20,000 benefits under McCain's plan. McCain's plan allows for you to have a $5,000 tax credit to buy health insurance for your family if your job doesn't include it as part of your compensation. Most jobs would probably still offer health insurance in order to attract good employees, but the new tax credit may encourage some people to choose to get their own insurance and get more in cash from their employer.

One advantage to having individual health insurance is that it is portable if you switch jobs. McCain's plan also allows you to shop across state lines for the plan that fits your needs best. Obama considers this incredibly dangerous because you are too stupid to know which plan to choose. States usually weigh down insurance plans with too much regulation. Liberals love it when the government requires insurance companies to cover everything, but it makes insurance incredibly expensive. You might want a more basic plan you can actually afford, but the state government has probably made that plan illegal. McCain would allow you to choose from plans offered around the country. McCain also favors tort reform to prevent frivolous lawsuits that also drive health care costs up. Obama opposes tort reform, as do most Democrats who get millions from trial lawyers.

Obama's plan is to force employers to either provide health insurance or to pay a fine to the government (Obama says "asking employers" instead of "forcing" like they would have any choice in the matter). It's really impossible to know the impact of this plan because Obama refuses to say how much the fine would be. If it is high, it would encourage employers to offer health benefits, but it would also destroy jobs for people who currently don't have health insurance because many employers wouldn't be able to afford it. If the fine is low, it would encourage the employer to just enroll the employee in the government's plan and we would see a mass exodus from private insurance plans into the government plan. Voila, government run health care. All-knowing government officials would then ration health care to keep down costs and the free markets role in health care would be over.