Democrats Betting on Gridlock

Steny Hoyer is leading the charge among Democrat Senators to put the brakes on an extension of the 2% payroll tax cut.  After nearly a month of blaming Republicans for the delay in passing the extension and parading around middle class Obama supporters saying how much $40 will change their lives, now Democrats in the Senate look likely to be the ones who kill this extension.

Why are Democrats defecting after a deal had been worked out?  Because the current payroll extension bill makes new federal employees contribute 3.1% to their own pensions.  Apparently we should share sacrifice and have skin in the game unless you are a federal employee.  Currently they contribute .8%.  The government picks up the rest of the tab and returns on the pension are guaranteed.

Meanwhile, many middle class Americans contribute anywhere from 3-10% to their 401k plans with no guaranteed returns and a maximum 3% matching contribution from their employers.  However, Democrats have characterized the plan to increase federal employee pension withholding as a budget war on federal employees.

Democrats appear to have figured out that they are succeeding in blaming congressional gridlock on Republicans.  It also appears that their strategy is to maximize gridlock even if it hurts the middle class.  But if Americans figure out why Democrats are holding up this tax cut extension, sentiment could turn pretty quick.  Democrats are betting against the intelligence of American voters.

Obama the tax cutter…until 2013

I predicted a couple years ago that Barack Obama was going to run as a tax cutter in 2012.  When Obama extended the Bush tax cuts through 2012, my fears were confirmed.  Obama has cut taxes.  Consider this:

In 2010, Obama extended the Bush tax cuts.

In 2009, Obama turned the $7,500 interest free loan on first time homes into an $8,000 freebie.

In 2009 and 2010, Obama passed the $800 a year making work pay tax credit.

In 2011 Obama passed the Social Security tax cut of 2%.

In 2010, a tiny percentage of businesses were eligible for the healthcare tax credit.

Now, watch this:

In 2013, taxes will go up between 5% for the poor to 4.6% for the rich with the end of the Bush tax cuts.

In 2013, even if the extension is passed in 2012, Social Security taxes will be back to 6.2%.

In 2013, individuals with $200,000 or more of income ($250,000 for married) will get an additional .9% in Medicare taxes

In 2013, individuals with income over $200,000 ($250,000 for married) will get another 3.8% in taxes.

In 2013, taxes on dividends and capital gains will jump up to a maximum rate of 39.6%. Even if Obama keeps his promises, it will still jump 5% for everyone.

Democrats are pushing for a 5% surtax on millionaires, which would would mean that in 2013 taxes on people who make a million dollars a year would be 16.3 percentage points higher than they are today to effectively be nearly 50 cents out of every dollar of income.

And Obama has no future election to cause him to prevent any one of these 2013 tax hikes.  In fact, half of these will have been specifically passed by him with a 2013 due date.  At the end of 8 years, Obama’s tax hikes will have vastly outweighed any piddly cuts and politically expedient extensions he has signed in the first four years.

Don’t be fooled. Obama isn’t a tax cutter, he’s just a politically smart tax and spend liberal.

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