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  • Morning Bell: How the Obama Tax Hikes Affect You

    Yesterday, Time Magazine senior political analyst Mark Halperin wrote: “With the exception of core Obama Administration loyalists, most politically engaged elites have reached the same conclusions: the White House is in over its head, isolated, insular, arrogant and clueless about how to get along with or persuade members of Congress, the media, the business community or working-class voters.” As if to prove Halperin’s point, Vice President Joe Biden told a group of Democratic donors in Seattle Friday: “The Recovery Act didn’t do enough because we couldn’t spend enough.”

    At least Biden’s statement shows that the White House is coming to grips with the fact that their $862 billion economic stimulus plan failed. Last Friday’s jobs report established that fact yet again, showing a net loss of 95,000 jobs in September, a half million jobs lost since the Obama recovery began, and an unemployment rate of 9.6%. In President Obama’s two years in office, federal spending is up more than 21% and the national debt has risen by $2.9 trillion. And Biden wants the American people to believe that this administration has not spent enough? Clueless indeed. Heritage Foundation Senior Fellow J.D. Foster explains why the Obama stimulus failed:

    The theory underlying Obama’s stimulus was that the economy was weak because total demand was too low. The suggested solution is then to increase demand by increasing government spending, exploding the deficit in the process.

    This theory of demand manipulation through deficit spending ignores the simplest of realities: Government spending must be financed. So to finance deficit spending, government must borrow from private markets, thereby reducing private demand by the same amount as deficit spending increases public demand. In effect, the theory says that if I take a dollar from my right pocket to my left, then I’m a dollar richer. No wonder it always fails.

    On top of President Obama’s failed spending policies, now the White House wants to saddle the U.S. economy with the largest tax hike in American history. Taxes on individual income, capital gains and dividends are all set to rise. As Harvard professor Greg Mankiw explained yesterday: “[D]on’t let anyone fool you into thinking that when the government taxes the rich, only the rich bear the burden.”

    The Heritage Foundation Center for Data Analysis has estimated the impacts of the Obama tax hikes and found they would: 1) decrease inflation-adjusted gross domestic product (GDP) by $1.1 trillion by 2020; 2) decrease business investment by $33 billion a year; 3) decrease personal savings by $38 billion in 2011 alone; 4) decrease consumer spending by $706 billion through 2020; and 5) kill an average of 693,000 jobs a year through 2020.

    The CDA has even broken down these impacts by state and congressional district. You can find the state-by-state and district-by-district results here (in the right hand column). West Virginians will see their individual income taxes rise by $1.6 billion. Nevadans will lose $2,697 per household in disposable income. And Wisconsin will lose 14,083 jobs annually. The stakes are high. Click through and find out How the Obama Tax Hikes Affect You.

    Quick Hits:

    Posted in Ongoing Priorities [slideshow_deploy]

    31 Responses to Morning Bell: How the Obama Tax Hikes Affect You

    1. Ken Jarvis - Las Veg says:

      Use a condom and you will learn….

      No deposit, no return!

      Help spread that across the Internet, and the WORLD.

      LVKen7@Gmail.com

    2. Cynthia Yost,Arlingt says:

      Is there any thinking person left in America who doesn't realize that Barack O is in over his head? He is spectacularly incompetent,and I squirm with embarrassment almost every time he opens his mouth,because usually either another lie or another nonsensical comment comes out,even with a teleprompter. Without one,he babbles on and on and fumbles for words, like a badly prepared third grader the first time he has to speak to a group. His policies are obviously illogical,and not launched with facts firmly in hand,just his dogmatic,progressive laundry list of what he himself wants done.

      He is an embarrassingly awful President,and I eagerly await his crushing defeat in 2012. Has any other president ever lost in a poll against an unspecified "Someone else"? BO has,which gives me hope for the future of our country.

    3. Lin Hodges - Chesape says:

      The Government can never spend us into prosperity. When the Government spends our tax money, they are taking OUT of the Economy. I trust Americans to spend more wisely then our Government. Washington never seems to "Get It!"

    4. C LabOUNTY MERRITT I says:

      BHO's stimulus bill had nothing to do with the economy.

      The economy was an excuse to spend more money to put us further in debt with the goal to make us all more dependant on the governement —- ergo redistribution.

      HF needs to spend more time digging into BHO's and his cronie's values and ideologies.

    5. Ben C. Ann Arbor, MI says:

      If the above isn't enough read the website Human Events and the posting New Lame Duck Threat to Bailout Union Pensions by Connie Hair. The newest attach will be on 401K's to help "spread the wealth." When will it ever end?

    6. Dennis Georgia says:

      It is good that biden finally said the stimilus did not work, but his reason is stupid.

      As long as the media continues to blow smoke up peoples pants leg, tells them the forest is on fire and people believe it we are in trouble. I do believe that obama will turn out to be worse than carter ever was.I know lots of people do not remember when carter left office, in shame over the hostage situtation, and what he had done to this country. I remeber when in the interest on a home was 15% and you were lucky to get that. The money that obama and the dems have spent will have to be paid back, the only way to do that is to raise taxes, and they will be steep on all of us. Interest rates will go through the roof, car loans will be so high we can not afford to buy, home mortgages will soar if you are lucky to be approved. Money is going to be in very short supply, those that have it will hold to it, business will not hire or expand for fear of what is or may happen in the future. People we are in a world of do-do, and noone can smell the stink, especially the dems and obama.

    7. john koss, Tennessee says:

      Going to early vote tommorrow as I am going in for surgery on 28th. Won't let Obama get me down. Judgement Day for the Democrats is fast approaching and also it should be noted those like minded individuals who feel we can tax our way to a better society. (See that stupid commercial for Travelers with all the animals playing together?) Who dreamed that one up David Axelgrease. I do not cease to be insulted by the stupidity of the politicians, social reformers and advertisers' who have so much influence within our country. What else is new though. One has to learn when things get you really down there is only one thing to do: Go Fishing.

    8. Blair Franconia, NH says:

      Ronald Reagan said it: "Government isn't the solution. Government is the problem. He was right then. He's right now. We have a deficit that's almost a Greek tragedy,

      a President who's an arrogant SOB, a Congress that doesn't give a tinker's damn about the people, and a government who believes that we work for it and not the other way around. There was a government just like this in David Webber's Honorverse. That was the People's Republic of Haven with its Legurslaturist ruling elite. We're well on our to becoming the PRH. According to David Webber, he got the idea for the People's Republic of Haven not from the Soviet Union, or Revolutionary France, but from the United States. What's next? A communist coup backed by Chinaand a communist government with the ability to kill its citizens at will? Revolutionary France fell into the Reign of Terror, the Soviet Union had its share of purges, and so did Iran during the Islamic Revolution thirty years ago.

      Sound far-fetched? Maybe it is. Maybe it isn't. The choice is ours. Do we want to end up like China or Venezuela? In Venezuela, elections are a joke, a sham, and a

      con job. Hugo Chavez is a retard who was dropped on his head at birth. He's not a

      democrat, (or Democrat, either with a large or small d). He's a demagogue. So, too,

      unfortunately, is MMM, MMM. BARACK HUSSEIN OBAMA!

    9. Ruth, St. Helena Isl says:

      WHAT DISPOSABLE INCOME????? I don't know how the rest of the nation is doing but we don't have any disposable income. How does this sound to everyone out there: Send all monies designated for the IRS to the treasurer of your state asking that the money be put into an interest growing escrow account. It is THE ONLY WAY to keep the government from getting it and if there is enough money in your states treasury, then your state won't have to depend on the Federal Government for money. Problem solved.

    10. Hank Richards says:

      Basic Economy 101: In reference to and from a marketing aspect, you can not create a demand for a product or service; you can only satisfy the demand. End of subject.

    11. Jill, California says:

      Don't forget that when the so-called wealthy business people making $250,000 or more have to pay more in taxes, many will be forced to raise prices on the goods and services they sell. Thus their tax increases will be passed on to the middle class. The middle class is going to be squeezed from all directions.

    12. Seth, Connecticut says:

      I do not understand how borrowing a dollar from China is like taking money out of one pocket and putting it in another. Yes in time that borrowing will have to be repaid from the other pocket but not immediately…maybe not for many months or years depending on the maturity of the loan. It seems to me that the correlation in real time is inaccurate and therefore not a very good reason why the stimulus hasn't worked..

    13. DGHarrison, Minnesot says:

      The Obamanites with their spending spree calculated to bring back prosperity are like a bunch of old ladies down at the bowling alley, sitting at little tables with piles of losing pull-tabs on the floor up to their knees. They sit there in a trance, methodically ripping the tabs open, each with her own sequence of pulls, for luck. A husband of one of these zombies is shouting, "I told you not to take the Christmas Club money, but it's all gone. And I wrote a check for the utilities, and it bounced. Stop spending money on pull tabs! You're never going to win back enough to cover all our losses!" But the old woman doesn't even acknowledge him standing there, as she pries open a tab to win $2.00. "Whoopee! She yells. I'm on a winning streak now!" The old man sadly walks away, heading for the VFW, where they have free popcorn and a big screen TV with the Vikings playing.

    14. toledofan says:

      You'd think, by now, people would realize that the 'rich' whoever they are are the engines that make the economy grow and when they don't invest, expand or retool, the economy goes south. I guess that at some point in time, looking at things like unemployment at 10% or higher, a deficeit over a trillion dollars in the past year, a sagging housing market and a weak America, you'd think the light bulb would get bright and the President or his administraion would say stop, it's not working. To do that, I believe, would signal the failure of socialism and if that happens the Democratic Party would be made extinct. It's sad that most of these 60's groovy kind of people have to face the reality that their ideology is a failure and all these years of trying to just do good had made things so much worse.

    15. Drew Page, IL says:

      What's the matter with you people? Don't you realize the recession is over? All this talk about unemployment, don't you people realize that 90% of American workers are employed? Don't you realize how much better things are today than they would have been if Mr. Obama wasn't elected? Most mortgages have not gone into default and most have not been foreclosed.

      All this harping about a budget is nonsense. All a budget does is limit how much you can spend. America doesn't need a budget limiting the government's ability to help people.

    16. Elaine Lincolnton NC says:

      This should be a perfect example to all Americans that Socialist/Progressivism has never nor will ever work- there it is before your eyes people. A total failure and a form of government we have for decades been holding at bay; thank God people are waking up to this stupidity. Now its time to take down all Obama and his supporters alone with their minions have put in place. Time to renew America with the freedoms to grow prosper and be free under limited government, a lot to do yet stay united.

    17. Tom Georgia says:

      And now, the rest of the story.

      Since everything that any government does is done with an efficiency of less than 100%, when money is taken from the left pocket and moved to the right pocket, the amount that is taken from the left pocket will be greater than the amount that arrives to the right pocket.

      For the policies of the freedom-fearing, regressive statists who are in the majority in Washington, (I almost made the mistake of saying in control) to work as they are intended to work would require that either the federal government or the nation's economy or both be able to operate with the properties and characteristics of a perpetual motion machine that could produce more and more work while using and dissipating less and less energy.

      I am laughing at the hopeless, hapless, helpless damned fools but the real reason that I'm laughing is to keep from crying because of the likely irreperable damage that they have done to the best nation that has ever existed.

      Viable solutions have to fit and function within the systemic situation that exists at the time that they are formulated and implemented. Policies that provided a fairly good fit and were to some extent helpful in providing solutions within the systemic situation that existed 80 years ago are worse than useless when applied to the systemic situation that we have now, a decade into the 21st century. They are and will continue to be destructive in the extreme.

      You have to fix what is broken instead of trying to fix what your rote, formulaic solutions say must be broken. Our governments are the most badly broken part of our nation. Our federal government is the most badly broken of our governments.

      It is We, the people who must fix what is broken.

    18. Ben C. Ann Arbor, MI says:

      Ken Jarvis – from your post yesterday re the WSJ. Yes, the Chamber of Commerce acknowledges the $100K from foreign sources but flatly denies it is used for campaigns. Given the size of the organization why would they try to cover it up? There are simply too many people involved with the Chamber to be deceitful. On the other hand, George Soros contributed many millions of his billions to get Obama elected and how about the hundreds of thousands of dollars received in his campaign for which cannot be accounted? Something about "throwing the first stone comes to mind".

    19. Toni, Cleveland, OHI says:

      obama was over his head the day he took office and maybe even before that! A community organizer without any skills and he thought he could run this country???? No. The plan of the people who are his puppet-masters was to destroy this country, using him as their puppet and moronic people in this country fell hook, line, and sinker for his lies! Reminder: November 2nd – TAKE OUT THE TRASH!!!!

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    21. Manawai, Honolulu says:

      My income is less than $250,000 but I'm solidly against allowing the Bush tax cuts to expire since those earning $250,000 and over are the folks who are spending money and keeping those dollars in circulation. Here in Hawaii it's the well-healed traveler that is keeping our tourist-based economy alive. Reducing their disposable income does nothing for the Hawaiian economy other than to lengthen the recession and joblessness of so many unfortunates in Hawaii. Raising of taxes in a recession/depression is the worst possible thing one can do. It is politically motivated by politicians who can't fathom how the economy works and pander solely those ignorant folks who beleive their hate the rich rhetoric. It is the biggest lie yet from the clueless liberal left; the same folks who want to end all fishing in Hawaii by changing the rules in the Management Plan for the Hawaii Humpback Whale Sanctuary.

    22. KC - New Mexico says:

      We need a flat tax – everyone pays based on their income – no deductions, no exclusions! This is so simple that it hurts! It is fair to everyone who lives and is legally in this country.

      The article did not talk about the death tax – it is terrible that our families who worked their butts off and made good money, invested and made more can not pass all this to their families upon death. The money has already been taxed. So now the family will loose out in 2011. This just is not right that our families monies must be given to the poor – they certainly did not earn it.

    23. Pingback: Morning Bell: How the Obama Tax Hikes Affect You | The Foundry … | The Ultimate Tax Guru

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    25. MN J says:

      An aside – PLEASE start using zeroes instead of million, billion, trillion.

      1.6 trillion reads as 16 to most people – 1,600,000,000,000 looks a lot worse. The loss of 85,000 jobs looks bad. 1.6 trillion looks ok. It's called marketing.

    26. Linda, Louisiana says:

      When the Democrats ever learn that taking money from Peter to pay Paul never works. There is just so many dollars in the kitty, and taking those dollars from one and giving it to another doesn't make more money. And borrowing money from foreign countries is not the answer. This administration has been a failure at everything, or else he is doing just what he set out to do – to destroy this Nation. I am willing to bet that Mr. Biden and a few Democrats are ready to stop playing this game. Surely they can see that nothing that Obama is doing is working for the good of this Nation.

    27. Randy J Blankenship, says:

      I, like many others, knew not only was Barack Obama the wrong person for the office of President of the United States because of his personal beliefs, ideology, and associations, but he would be way out of touch with the duties and responsibilities of the office. He has put himself in a dead end collision with the Constitution and the American people even before taking office. Foreign leaders understand the problem: our allies do not agree with his ideas and smile out of politeness, while our enemies don't fear him. A majority of the American people now, finally, know he is not Presidential material, and Democrats running for reelection realize that the votes they casted during the past 20 months have hurt them and they don't want to be seen on the same stage with him. Everyone is running away from President Obama.

      http://www.TheFreedomCause.com and http://www.Blankenship2012.com for more good insight and a true Constitutional Conservative.

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    29. Ed, Virginia says:

      I agree. Taking money of the the free market, where market force efficiently guide their allocation in the engine of productivity, investment, and utilization, and putting instead into politicized government government spending is always a bad deal.

      And taxation will always be an economic decelerant. It reduces the profit motive by reducing profitability/viability, and leeches money out of re-investment, R&D, etc.,

      As a personal note, I am on disability, and for at least now, dependent on government servies. I realize a rising tide raises all boats, and I hope good economic policy will raise my prospects partial employment, and be able to fund the kind of services a wealthy nation can provide, when it is truly necessary.

    30. Rick Sovel, Ohio says:

      It doesn't take a Rocket Scientist to figure out that the billions spent on the last attempted bailout was focussed on the wrong area.The money shouldn't have been handed out to the Banks or Car Manufacturers. Not looking for a free handout, but who actually buys manufactured products and commodities. Had a small portion of that money been filtered out to the American people to spend and I'm not talking about $300, it could have been doled out over a period of months alphabetically to keep a flow of spending power in effect. Supply and demand just might might have helped people keep their jobs and stimulated the economy for who knows how long..

      Maybe my idea isn't the correct solution to this Countries problem but on the other hand I don't think the method that was used was the total answer either.

    31. Kevin H, College Par says:

      Hehe…the stimulus failed. That's a pretty good one. It really is amazing people can even type that – i guess they just don't want to look at the facts and the numbers.

      More than one-third of the package was tax relief, but some folks don't like to read the bills.

      The stimulus gave over 110 million american families a tax cut – over 95% of working families. Tens of thousands of businesses were given tax relief. Millions of americans were given college tax credits. I thought you all were for tax cuts and credits. But I guess not when a Democrat gives them.

      9 straight months of private sector job growth – that's a failure? When this adminstration took over, more than 700,000 jobs were being lost each and every month, and now they have added jobs to private sector the last 9 months – and you think it's a failure? According to CBO (which heritage always cites as non-partisan scorekeeper) – the Stimulus created or saved 3.3 million jobs.

      It added 4.5% to GDP growth. I presume you think that is a failure. Perhaps you forgot how quickly it was dropping each month before President OPbama took over? Do any of you not remember 2 years ago and the horrible freefall the country and economy was in?

      How about the stock market. DOW was in the 6,000s before the stimulus, it's now in the 11,000s – nearly a 100% increase. That's a failure?

      Come on people – open your eyes and stop buying this heritage fox news stuff they are feeding you.

      over 1,900 projects and military facilities, over 500 projects at veterans medical facilities, more than 3,000 clean drinking water programs, funding for advanced battery work (which will have enormous impact on future), tens of thousands of research projects on cancer, alzheimers, heart diseases, etc..

      over 75,000 projects across US were started because of the stimulus, more than 70,000 small businesses have received loans through the stimulus, 40,000 miles of roads across the US improved, 70 private companies given grants for advanced battery and electronic vehicle research and development, ovre 4,000 DoD construction and imrpovement projects, etc..

      I'm amazed at how much people beleive the lies from the right. Look at the facts and stop regurgitating what you hear. Look at the numbers and facts and decide for yourself.

      In my eyes, anyone who claims the stimulus was a failure is either a spokesperson for a political party (like Conn) or just plain ignorant.

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