Romney needs to call Obama’s Bluffet….

 

We know that the Bluffet, sorry Buffet, rule is a motif for President’s class warfare, and more warning shots will be fired when Congress returns today from a two-week recess to a test vote on the rule, which would impose a minimum 30 percent tax rate on income over $1 million. The Bluffett tax targets wealthier Americans’ investments rather than salaries.

Today is the day when this issue of class warfare kicks off for November in earnest, now that we know it will be Romney for the GOP and Congress gets to have a say on the matter.

President Obama, who pays less tax than HIS secretary (he filed tax returns showing he paid an effective tax rate of 20.5 percent on income of about $800,000 in 2011) says the government needs the revenue from the Bluffett rule, estimated at $47 billion over 10 years, to cover “a broad range of goals.” He also says “This is not just about fairness.” Well, he got that right, it is very unfair, but not in the simplistic moralistic way he is peddling.

He says “This is also about growth. It’s about being able to make the investments we need to strengthen our economy and create jobs. And it’s about whether we as a country are willing to pay for those investments.” In other words, robbing Peter to pay Paul.

Fact is, do we really need government to do the investing, and where does the investment go? Into government black holes and deep pockets, rather than into businesses which create wealth. The Bluffet tax would not create wealth, it would merely enhance dependency. We would see a better rate of return on the $47 billion in business investment by the wealthy than we would from government. That is an awful lot of liquidity to take out of the markets, and I don’t see too many secretaries taking up the slack.

Of course, keeper of the Treasury keys Tim Geithner was out pushing the rule on Sunday, “Just because Republicans oppose this does not mean it’s not the right thing to do and not the right thing to push for,” he told NBC’s “Meet the Press” program. Double negatives aside, we can say that just because Democrats think it is the right thing to do doesn’t mean it even begins to make sense.

If we look at the paying side of this, we see the rich targeted for this end up paying more. Simple. But for what are they paying? Increased revenue means increased expenditure, and so the things for government to spend on expands to meet the expanded revenue. More programs, more dependency and less reward for effort. What does the payer get in return? They get little benefit, and the wealthier they are the less they need what they are paying for.

Which means the sole purpose of the Bluffet rule is twofold, increased state powers and redistribution of wealth. Conservatives who attack Romney or the rich for their wealth are playing with the same deck as Obama.

Obama says, “If you make more than $1 million every year, you should pay at least the same percentage of your income in taxes as middle-class families do… Most Americans support this idea. We just need some Republican politicians to get on board with where the country is.” Of course, Obama doesn’t have to worry too much about his investments, because after leaving office, which cannot come soon enough, he will make a ton of cash for the remainder of his days. He doesn’t have too much to worry about…The rest of us do.

Republicans Should Capitalize on Obama Budget to Nowhere

Class warfare has become a central theme of the Obama campaign.  In his 2013 budget released earlier this week, President Obama proposed major tax hikes on the wealthiest Americans – those making $200,000 per year or families making over $250,000.  Indeed, the “debt reduction” that the president claims is dependent largely on these tax increases alone. Class warfare and raising taxes on the rich may be beneficial to his political campaign, but it is bad for the economy as it merely redistributes wealth, not create it.  The Republican nominee needs to be committed to capitalism and battle the President’s class warfare, big government, Keynesian economic rhetoric using free-market principles, stressing economic growth, job creation, and wealth creation through lower taxes, less regulation, and smaller government.  Despite what the President claims, his budget does not promote growth and has the potential to be a weak spot that Republicans can capitalize on.

Included in the President’s proposal is around $1.5 trillion in new revenue coming from tax hikes on the wealthy and corporations.  These tax raises take various forms; a 9% raise in capital gains tax rates, the dividends rate jumps 25% from 15-40%, the carried interest tax on investment partnerships rise from 15 to 39.6%, and the estate tax rises to 40%.  In addition, the budget calls for allowing the Bush-era tax cuts to expire, raising the top-level income tax rates to 39.6%.  Then there’s the new “Warren Buffet Rule“, which requires all those making more than $1 million per year pay at least 30% of their gross income in taxes.

English: President Barack Obama signs the Tax ...

Obama signing The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010

Perhaps the most damning, however, is the tax hike on businesses; Obama has yet to announce his new corporate tax rates, but included in the budget is a “financial crisis responsibility fee” on large banks that amounts to $61 billion, taxing energy companies $30 billion over a decade by ending tax cuts, $148 billion in new taxes on multinational corporations, and another $87 billion by changing how businesses value their inventory. Continue reading

Perry’s Cut, Cap and Balance Flat Tax Plan is a Winner But Will it Make Him a Winner?

  Bookmark and Share  In advance of his announcement of a flat tax proposal that would be the most dramatic tax reform in the nation’s history, Governor Rick Perry penned a summary of his proposal in this mornings Wall Street Journal .

Calling his proposal “Cut, Balance and Grow”, Perry hopes to balance the federal budget by 2020 and explains that his plan will abolish the death tax and give taxpayers the option to pay their current income tax rate or a new 20% flat tax that “preserves mortgage interest, charitable and state and local tax exemptions for families earning less than $500,000 annually, and  increase the standard deduction to $12,500 for individuals and dependents.”   In addition to a 20% personal income tax, the Perry plan will also adopt a lowers the corporate tax rate to 20% and encourage the swift repatriation of nearly $1.4 trillionthat are currently hidden overseas by temporarily lowering the rate to 5.25%.  The third part of his flat tax proposal includes what he calls a transition to a “territorial tax system”, that will only tax income earned in the United States.

Perry’s plan also calls for the elimination of the tax on Social Security benefits, a change that will supposedly boost the income of 17 million current Social Security recipients.

Governor Perry argues that without significant changes, our nations will go the way of Europe and be mired in a longterm debt crisis that will only get worse than the one we are currently experiencing and to help avoid that in addition to his new flat tax reform he attempts to cut, cap and balance federal spending habits by capping federal spending at 18% of our gross domestic product, banning earmarks and future bailouts, and passing a Balanced Budget Amendment to the Constitution. Additionally he will freeze federal civilian hiring and salaries until the budget is balanced and enact an immediate moratorium on pending federal regulations while also mandating  a full audit of all regulations passed since 2008 to determine their need, impact and effect on job creation.

In what is a direct nod to his need to shore up those voters who are fearful about Perry’s past remarks about Social Security being a Ponzi scheme and as such, something which he would seek to eliminate, Perry’s plan touches entitle reforms, an issue which needs to be addressed and which Perry’s plan does not address enough. His proposal merely declares that he will preserve benefits for current and near-term Social Security beneficiaries, by permanently prohibiting “politicians from raiding” the Social Security trust fund.

That part of his plan is the most politically shallow aspect of his proposal.  While he addresses that issue under the category of entitlements, he does not really address all of the entitlement reforms that are burdening the budget now and will bust it in the future.  It is also worth mentioning that it is nearly, if not totally impossible for a President to vouch for the permanent inability of Congress to “raid” any fund.  President’s come and go.  The mentality that relies on political expediency among Congress lasts forever.

In general, Perry’s Cut, Cap, and Balance plan is one of the most comprehensive and promising plans to come down the pike in decades.  One of the most, but the not only one.  Others have proposed similiar flat tax based plans and one of the major differences between those other plans and Perry’s plan is that at 20%, Rick Perry sets his flat tax at a rate significanlty higher than most all others.  That high 20% rate is probably the least attractive aspect of Perry’s plan.

Insofar as reform goes, it is much more solid than the light on detail, 9-9-9, hybridized flat tax proposal of Herman Cain and when it comes to the issue of reform, Perry’s proposal outshines even Ronald Reagan’s, Jack Kemp inspired, lower taxation, supply side economics plan of the 80’s.  That plan simply adjusted the existing tax code and while it was in no way insignificant, Perry’s plan admits that the tax code is not worth tinkering with and needs to be scrapped and replaced by something that will allow America to be competitive in the modern global economy.

In a previous post I indicated that if Perry proposes a good flat tax plan and can market it properly and exploit the promise that exists in a flat tax from a politically strategic point of view, than he can reestablish himself as a frontrunner, or at least within reasonable striking distance of such a status.  Now that the relative details of his plan are out, I can honestly say that despite my belief that his 20% rate is too high,  if he can build his campaign around this plan and make it a focal point of the overall Republican nomination contest, than Rick Perry will have many fruitful themes to touch upon and run on.  Now is just a matter of developing an effective campaign strategy and organization that can force the other candidates to run around his promising, conservative based economic plan and reforms. Bookmark and Share

Pawlenty Proposes Obama Go to “Econmic Rehab” and Lays Out His Own Recovery Plan

Bookmark and Share   In a perfectly timed speech, former Minnesota Governor Tim Pawlenty capitalized on the irrefutable evidence and increasingly undeniable sentiment that President Obama is mishandling the American economy.

Appearing at The University of Chicago’s Harris School, a location that’s just a few steps away from the University that President Obama and his soon to depart chief economic adviser Austan Goolsbee taught at, Pawlenty became the first candidate in the 2012 Republican presidential field to actually act like a candidate for President as he laid out his plans to revive the U.S. economy. He began his almost 45 minute appearance which included questions and answers, by slamming the President and claiming that President Obama needs to enter “economic rehab”.

“President Obama is satisfied with a second-rate American economy, produced by his third-rate policies. I’m not” said Pawlenty

From there Pawlenty presented a Reagan-like, limited government approach to our economic woes that included proposals to eliminate the U.S. Postal Service, Amtrak, Fannie Mae and Freddie Mac.

The former two term Governor’s plan also calls for what he called a “simpler, fairer and flatter tax code” that would eliminate capital gains, estate, and dividends taxes, and include only two tax rates. One of 10% and the other of 25%. Individuals earning up to $50,000 or a joint income up to $100,000, would pay 10% while those with incomes above that would be taxed at 25%. Under Pawlenty’s plan, those who currently do not pay any income tax, will continue to not pay any.

Other aspects of Pawlenty’s economic reforms were actually quite bold for a politician seeking support from voters. He proposed expanding presidential powers. That is a move that many limited government, TEA movement activists may initially view as a power grab that is antithetical to their cause. But Pawlenty’s proposed expansion of presidential power is a request to have Congress give the executive branch emergency powers only to freeze spending.  According to Pawlenty, “If they won’t do it [freeze spending] — I will,”. The Governor also declared his supports for the creation of a Medicaid block grant program that would cap the amount of money states receive for the health benefits for the elderly, and much to his credit, he courageously endorsed raising the retirement age of Social Security recipients.

That last point is something which few politicians who want to win an election are brave enough to propose, but for many people, the fact that he did endorse such a move, demonstrated that maybe Tim Pawlenty is one of those few political leaders who will actually say what needs to be said and do what needs to be done. Isn’t that part of the reason why many are still clamoring for Chris Christie to jump in to the Republican presidential contest? The consideration of raising the age of SSI recipients is always a controversial one. However, it is nonetheless an unmistakably necessary move in light of the need to keep that program solvent, the need to get entitlements under control, and the increasing life expectancy rate of society.

The scheduling of Pawlenty’s speech, be it through good strategic instinct and timing or just plain luck, was impeccable. It came on a day when the news of President Obama’s mishandling of the economy was unavoidable. Facts, figures and polls all presented themselves today in a way that even the lamestream media could not avoid turning in to headlines. A new Washington Post/ABC news poll that found that by a margin of 59 to 40 percent, Americans disapprove of the President’s handling of the economy, the President’s Chief economic adviser announced he is resigning, and if the news wasn’t grim enough, a new study of businesses found that once Obamacare kicks in, 1 in 3 businesses will stop offering health benefits. So much for the President’s promise that under Obamacare, you will be permitted…. “permitted”….. to keep your current health insurance plan. The perfect timing of Pawlenty’s speech came at an optimum moment to exploit all these findings.

The speech Pawlenty gave and proposal he offered were in many different ways promising. While it could have easily gone much further with such proposals as a total flat tax that would offer one rate for one nation, and for other measures such as a balanced budget amendment, the plan was solid and a total reversal from the failed Keynesian path the President has put us on. It had much to offer not just for the fiscal conservative base of the Party that Pawlenty desperately needs to win over, but for the important limited government independent voters as well.  As for the delivery of the speech, it proved that Pawlenty can articulate his vision for the nation, and that he is capable of taking the bull by the horn and leading. So far, on the issue of the economy, he is the first 2012 candidate to provide such leadership.

All in all, today was a good day for Tim Pawlenty. Unlike the announcement of Rick Santorum’s presidential candidacy from the day before, Pawlenty had the fortune of not being stepped on by the breaking news of a scandal, like Weinergate and the conditions were right for his message to resonate. Most of all, today Pawlenty took his first real step towards going from being the candidate to support if your first choice doesn’t run, to being someone who could be considered a first choice in his own right. He was poised, presidential, confident, and seemed to have a command of the issue. And on another positive note, Pawlenty managed to weave into his presentation, an important theme that continues to point out the sense that President Obama is out of touch with both the American people and the purpose of government In America.

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