Freedom of BLEEP

Yesterday, President Obama announced that he would like to exempt small businesses from capital gains taxes for the next year to help them through the tough economic times.

How does this help small businesses? It doesn’t really. This is clearly a strategic maneuver to deceive feeble-minded Americans into believing that our Government is providing tax relief. And the Democrats know that they’ll get away with it since many Americans couldn’t define capital gains tax to save their own life!

Why encourage small businesses to invest in stocks and bonds if we want them to start hiring more workers? It’s not just a logical fallacy; it’s duplicitous trickery intended to avert our eyes from the many ways that Democrats are actually raising taxes on small businesses. Even the New York Times admits that Obama hasn’t brought much to the table for the small businesses of America.

How exactly are the democrats raising taxes on small business?

1.) Under the proposed health care legislation, employers with payrolls exceeding $250,000 will have to provide health care to employees or pay up to an 8% penalty tax. It’s important to emphasize this is based on payroll exceeding $250,000, not based on net profits exceeding $250,000. This is going to have a huge impact on many, many small businesses in America.

2.) In addition to the cost of providing insurance, a surtax of 5.4% will also be levied on some small businesses to pay for the new government-run health care system. Democrats argue that this will only effect 1.9% of small businesses, but these figures are misleading. They include sole proprietors (that don’t have any employees) as small businesses. It’s the successful businesses in the top 1.9% which produce the most jobs.

3.) Democrats have proposed a new tax to help pay for the war in Afghanistan. Again, this will be aimed at those “earning more than $200,000 or $250,000.”

4.) Democrats also plan to repeal of a form of inventory accounting that tends to reduce business taxes. This is a particularly sneaky way to raise taxes on small businesses without the general public noticing.

5.) Democrats have been pushing for mandates that will require investment partnerships to pay the regular income tax rate instead of the lower capital gains rate. Small business owners have spoken out against such reforms, yet Democrats passed this as part of a “Tax Relief” bill.

6.) Oh, and by the way, capital gains taxes are actually increasing by at least 33% for everyone in America, and up to 69% for small businesses. Sure, small businesses will be off the hook for one year, but in 2011 Obama will be increasing the base capital gains tax rate to 20% — and the 5.4% health care surtax will also apply to capital gains on top of that. So that’s a 69% capital gains tax increase for America’s job-producing small businesses.

Why are small businesses so important?

Here are just a few statistics taken from the US-SBA:

• Small businesses represent 99.7 percent of all employer firms.
• Small businesses employ over half of all private sector employees.
• Small businesses pay 44 percent of total U.S. private payroll.
• Small businesses have generated 64 percent of net new jobs.

Increased Energy Prices

Cap and Trade will require utility companies to supply 20 percent of their power from renewable energy sources by 2020. The Senate was unable to pass a smaller mandate in 2007, mainly because favored sources of renewable energy just don’t work in certain regions of the country. This standard will force utilities to increasingly rely on expensive sources of energy like wind and solar – expensive because they must be located far away from urban areas, necessitating long transmission lines. The associated costs will find their way into your monthly utility bills.

Forthcoming Obama Tariffs

The Cap and Trade Bill will give the Obama administration broad new powers to enact tariffs on imports from countries that have not imposed similar offset limits. All of the inexpensive goods we enjoy from the East will become more of a luxury. Additionally, the Obama Tariffs will inevitably lead to other countries placing tariffs on our goods and our economy will suffer even more. According to the New York Times:

A House committee working on sweeping energy legislation seems determined to make sure that the United States will tax China and other carbon polluters, potentially disrupting an already-sensitive climate change debate in Congress. The Ways and Means Committee’s proposed bill language would virtually require that the president impose an import tariff on any country that fails to clamp down on greenhouse gas emissions.

Increased Fuel Prices

Relative to other companies in the energy sector, domestic oil refineries will receive a low number of permits. This will rapidly decrease the supply of gasoline. Even if refineries are able to meet offset limits through improved efficiency, the associated cost will still be passed down to consumers. Not only will you be paying more to fill your own tank, but you’ll be paying higher prices for everything you buy that has been transported.

Inefficient Government Expenditures

The projects receiving grants and financing under this legislation will not go to the cheapest bidder or even to the most competent contractor. Instead, companies will be required to implement Davis-Bacon union-wage rules, making it hard for non-union companies to compete. Most often, the grants will be paying inflated union wages.

Handouts for Other Nations

The Cap and Trade Bill will channel billions of dollars into subsidies for “international clean technology deployment for emerging markets.” For some reason, Democrats want to spend huge sums of money trying to impose our regulations on other countries. And remember, we’re talking about money taken from your pockets through cap and trade taxes. The value of the dollar is dropping, interest rates are shooting up, we are under a mountain of debt… But liberals want to give our money away to countries like China and India - countries that are already on track to surpass our GDP.

Increased Appliance Prices

The bill even extends to cover appliances. Washers and dryers, dishwashers, showerheads, televisions, and just about anything else you might want to buy will be subject to strict efficiency regulations. Like everything else, the price for these appliances will go up.

Another $25 Billion for Detroit

It’s part of the Auto Bailout Ad Infinitum Program.

Government Galore

Who do you think will be tracking offsets, micromanaging manufacturers, inspecting factories, inspecting power plants, inspecting farms, inspecting your house, inspecting imports, collecting tariffs, reviewing subsidy applicants, testing appliances, monitoring retailers, managing auctions, calculating costs, awarding grants, writing reports, and organizing data - all in between games of solitaire? Dozens of taxpayer-funded government agencies that run about as efficiently as your local DMV.

CAP AND TRADE IS A TAX ON THE MIDDLE CLASS

The answer is yes. If you are a taxpaying American, you’re seeing a little over $9 extra show up on your paycheck each week. This is your stimulus check. And your promised tax deduction!

Let’s be honest. Will a minor decrease in withholdings really stimulate the economy when most Americans don’t even notice it? Even if you did realize you were getting the stimulus, does the extra nine bucks really make you want to go out and spend? Wouldn’t it make more sense to give us a fat check all at once like Bush did last year?

Which leads to another question. The withholdings deduction does add up to the $500 tax cut that Obama promised. But under Bush, taxpaying Americans received a tax rebate of $600 to $1200. By neglecting to renew these rebates, didn’t Obama actually raise our taxes?

The math really isn’t that complicated. However, it does take some calculus to see the big picture: the limit of taxes as Obama’s government expansion approaches infinity is equal to your paycheck.

Stay tuned for other ways that Obama will be raising your taxes.

Obama’s Power Grab, Part I

Thanks to the liberals in office, our government will now be deciding where your donations to charity go. They will be taking money out of your taxes to give to charities of their choice. Charities like tattoo removal. Obviously they are selecting charities backed by their campaign donors, possibly making this one of the most corrupt pieces of legislation in American history. So much for Obama’s promise to clean up Washington…

You don’t think tattoo removal is a worthy cause? Adding insult to injury, the Obama tax plan will also reduce the deductions for voluntary charitable contributions (in addition to increasing the taxes of those making over $250,000 - otherwise known as the top 2% of Americans who already pay more than 40% of all federal income taxes!!). Many are rightfully angered by the proposition, arguing that not-for-profits can barely survive amidst the downturn in the economy. They rely on each and every dollar coming in from donors, and reducing the charitable donation tax deductions will most definitely decrease donations.

Liberals love to vilify the rich by painting them as selfish misers, only out for the tax benefit of donating. Of course those who are already predisposed to donate will continue, but when you take away the additional tax benefits, it is only reasonable to assume that people will reduce their contributions during tough times.

But charities be comforted! Peter Orszag, Obama’s director of the Office and Management Budget, assures that in the recovery act “there’s $100 million to support nonprofits and charities as we get through this period of economic difficulty.” That is, if you are one of the liberals’ pet charities. As NYT-labeled “fundraising expert” Robert Sharpe Jr. says “The administration’s proposal is doing just that, reordering charitable priorities by taking money wealthy people would have given to other charities and making it go into the health care system.”  Unfortunately, health care is only one of the many “charitable contributions” that the government is making with taxpayer dollars.

I’m curious where it says in the Constitution that the government is equipped to “reorder” American citizens’ priorities. This is just another way that the democrats are taking personal decisions out of the hands of Americans and making the decisions for them. Should the government really decide which charities are worthy and which aren’t?

No one said it better than House republican leader, John Boehner. “Oh…my…God.”

He was commenting on the current stimulus package that House democrats have introduced, just in time for Obama’s rise to the throne.  The phrase ”stimulus package” is being used very loosely, as most of the bill is going towards ridiculous welfare programs and liberal spending that will do little to get our economy out of the trouble it’s in.  At best, it will encourage people to sit lethargically in front of their new taxpayer funded Digital TVs and eat more government subsidized food.

A great deal of the money will go to extending unemployment benefits for out-of-work Americans and creating new “green jobs”  (i.e. lightbulb changers).  While retrofitting government offices, building energy efficient infrastructure, and investing in a green energy grid are all noble causes, there is a disconnect between these projects and stabilizing our economy.  This massive spending may create temporary jobs, but what happens when these projects are finished?  Will we continue to keep these “green collar” workers on the taxpayers’ payroll ad infinitum?

Also hidden in the bill among the other random allotments are the Obama “tax cuts.” Funny how the tax cuts were promised to families making under $250,000, yet the bill only rewards those that make less than $150,000.  By the time the bill is passed, it may be down to $75,000 or even $50,000, since it has become a liberal mentality that all the “wealthy” people should be punished for their hard work and success.  Let’s discriminate against those who create jobs, and see how this stimulus works.  Additionally, the “tax cuts,” as promised, are refundable. This article explains, “[b]ecause it’s refundable, Americans without income could apply for it.”. Without income?  Meaning, non-working Americans?  Meaning, welfare?  Someone explain this, because it doesn’t sound like a “tax cut” to me. But I digress…

Other funding includes: $20 billion to increase the food stamp benefits, $87 billion for an increase in the Medicaid matching rate, $1 billion to aid states in the collection of child support, another $1 billion toward preparations for the 2010 census, $4 billion to support local law enforcement, and $800 million to clean up toxic waste sites.  How exactly does this stimulate the economy?  Anyone can B.S. some tangential economic benefits from these programs, but at the heart of this “stimulus package” is porkbarrell spending on social welfare programs that would give any liberal a wet dream. In the words of White House Chief of Staff Rahm Emanuel, “You never want a serious crisis to go to waste.”

The Senate runoff election between incumbent Saxby Chambliss and Jim Martin takes place tomorrow. Before dropping a vote for Jim Martin, consider the following:

1.) Jim Martin voted for the largest tax increase in the history of Georgia.

2.) Jim Martin proposed legislation that would increase property tax by 150 percent.

3.) Jim Martin voted to eliminate mandatory minimum sentences for drug dealers, voted against making extremely violent criminals serve their entire prison sentence, and voted against making it a felony to distribute drugs within 1000 feet of a school.

4.) Jim Martin voted twice against making English the official language of Georgia.

5.) Jim Martin supports the Card Check bill, which will eliminate the secret ballot for union votes.

Earlier this week, we discussed how president-elect Obama has played a central role in bringing the U.S. economy to its knees. Now let’s consider how his actions since the election have worsened the situation.

1.) For the incoming administration, economic advisers will be among the most consequential appointments. Yet even the New York Times disagrees with Mr. Obama’s decision, stating that two of his key advisers “have played central roles in policies that helped provoke today’s financial crisis. [...] unless they recognize their past mistakes, there is little hope that they can provide the sound judgment and leadership that the country needs to dig out of this desperate mess.”

2.) Obama has promised to raise capital gains taxes. Investing is risky - especially in today’s volatile market - and individuals will have less incentive to invest money if they are taxed more on their investments. This isn’t rocket science. Still, the president-elect has refused to say whether he will wait for the economy to improve before imposing his tax hike.

3.) Obama has promised to raise taxes on large corporations. Of course, the net result will be lower profit margins for the Fortune 500 and falling stock indexes. Again, Obama refuses to indicate whether he will delay the tax hike until conditions improve, which has created a great deal of unease among investors.

4.) Obama has promised more regulation for big business. Investors don’t get excited when they hear companies will have more hoops to jump through and additional regulatory penalties which can prevent businesses from expanding. 

5.) Obama endorses the Check Card bill, which will make it easier for unions to bully large and small businesses. This bill will eliminate the secret ballot, thus enabling union leaders to intimidate and coerce workers. Anyone who has taken American History is aware how overly-powerful unions can have an adverse effect on American business. Just look at what unions have done to the auto industry.

6.) Obama has promised to raise taxes on small businesses - the largest job producing segment of our economy. Sure, 95% of small businesses will fall below the tax threshold, but it’s the top 5% where a majority of new jobs are being created. Why would investors want to jump into the market when successful and growing companies are going to be punished?

It’s no secret that Social Security is in trouble – the funds are completely exhausted and the program will soon go into deficit as baby boomers begin to retire in masses. In order to remedy this situation, many Democrats favor confiscating your 401(k)s and IRAs. They want to nationalize your earnings so the government can run guaranteed retirement accounts, thus “saving” you from the volatile stock market.

What’s the bottom line? People who never bothered to save a dime will be entitled to YOUR money that YOU have worked hard for over the course of your entire life.

It’s hard to believe that such an absurdity has been considered seriously, but this idea is gaining traction according to numerous news sources (ABC News, Carolina Journal, Market Watch, US News & World Report). And considering that a 15% tax on all retirement funds nearly became enacted under Clinton, losing our 401(k)s to a broken welfare program will be a very real possibility when our government is controlled by liberal radicals in January.

Saving redistribution of wealth and the evils of communism for another discussion, let’s talk about how the government is already ripping you off through the Social Security program. To put it quite simply, the government prints money thus causing inflation (4.1 percent last year), while only meagerly adjusting social security pensions (2.3 percent last year). Compound your losses for 40-50 years and your pensions will be a pittance. If that sounds bad, look into how the government under reports the CPI in order to artificially keep COLA adjustments low and discover that the situation is much worse than it appears. 

Social Security is a failing government program. Do you really think they will do any better with the money from your 401(k)?