Obama Declares War on Investors, Entrepreneurs, Businesses, And More

[Combat Ready]

Friday, 27 Feb 2009 | 4:39 PM ET
Posted By: Larry Kudlow

Let me be very clear on the economics of President Obama’s State of the Union speech and his budget.

He is declaring war on investors, entrepreneurs, small businesses, large corporations, and private-equity and venture-capital funds.
That is the meaning of his anti-growth tax-hike proposals, which make absolutely no sense at all — either for this recession or from the standpoint of expanding our economy’s long-run potential to grow.

Raising the marginal tax rate on successful earners, capital, dividends, and all the private funds is a function of Obama’s left-wing social vision, and a repudiation of his economic-recovery statements. Ditto for his sweeping government-planning-and-spending program, which will wind up raising federal outlays as a share of GDP to at least 30 percent, if not more, over the next 10 years.

This is nearly double the government-spending low-point reached during the late 1990s by the Gingrich Congress and the Clinton administration. While not quite as high as spending levels in Western Europe, we regrettably will be gaining on this statist-planning approach.

Study after study over the past several decades has shown how countries that spend more produce less, while nations that tax less produce more. Obama is doing it wrong on both counts.

And as far as middle-class tax cuts are concerned, Obama’s cap-and-trade program will be a huge across-the-board tax increase on blue-collar workers, including unionized workers. Industrial production is plunging, but new carbon taxes will prevent production from ever recovering. While the country wants more fuel and power, cap-and-trade will deliver less.

The tax hikes will generate lower growth and fewer revenues. Yes, the economy will recover. But Obama’s rosy scenario of 4 percent recovery growth in the out years of his budget is not likely to occur. The combination of easy money from the Fed and below-potential economic growth is a prescription for stagflation. That’s one of the messages of the falling stock market.

Essentially, the Obama economic policies represent a major Democratic party relapse into Great Society social spending and taxing. It is a return to the LBJ/Nixon era, and a move away from the Reagan/Clinton period. House Republicans, fortunately, are 90 days sober, as they are putting up a valiant fight to stop the big-government onslaught and move the GOP back to first principles.

Noteworthy up here on Wall Street, a great many Obama supporters — especially hedge-fund types who voted for “change” — are becoming disillusioned with the performances of Obama and Treasury man Geithner.
There is a growing sense of buyer’s remorse.

http://www.cnbc.com/id/29434104

[FORD]

Never mind what Wall Street funded "studies" say, Kuntlow....

REALITY says that 28 years of tax cuts for the rich have BANKRUPTED the goddamn country.

Why is that? Well Larry, it's mathematics that are so simple even Chimpy SHOULD HAVE been able to understand them, he just didn't give a shit.

1) When the rich don't pay their fair share of the tax burden, it falls to the middle class.

2) When the middle class shrinks, that means there are less people paying taxes.

3) Less tax revenue = bigger deficits.

Solution = make the rich vampires pay their fair share of the taxes. Repeal every tax "cut" since 1980 AND close every loophole immediately, so they can't get out of paying them.

[Combat Ready]

Never mind what Wall Street funded "studies" say, Kuntlow....

Sorry--the links to Tass and Pravda were down...Go figure.

[kwame k]

And as far as middle-class tax cuts are concerned, Obama’s cap-and-trade program will be a huge across-the-board tax increase on blue-collar workers, including unionized workers. Industrial production is plunging, but new carbon taxes will prevent production from ever recovering. While the country wants more fuel and power, cap-and-trade will deliver less.

"What is Cap and Trade?
The goal: To steadily reduce carbon dioxide and other greenhouse gas emissions economy-wide in a cost-effective manner.

The cap: Each large-scale emitter, or company, will have a limit on the amount of greenhouse gas that it can emit. The firm must have an “emissions permit” for every ton of carbon dioxide it releases into the atmosphere. These permits set an enforceable limit, or cap, on the amount of greenhouse gas pollution that the company is allowed to emit. Over time, the limits become stricter, allowing less and less pollution, until the ultimate reduction goal is met. This is similar to the cap and trade program enacted by the Clean Air Act of 1990, which reduced the sulfur emissions that cause acid rain, and it met the goals at a much lower cost than industry or government predicted.

The trade: It will be relatively cheaper or easier for some companies to reduce their emissions below their required limit than others. These more efficient companies, who emit less than their allowance, can sell their extra permits to companies that are not able to make reductions as easily. This creates a system that guarantees a set level of overall reductions, while rewarding the most efficient companies and ensuring that the cap can be met at the lowest possible cost to the economy.

The profits: If the federal government auctions the emissions permits to the companies required to reduce their emissions, it would create a large and dependable revenue stream. These financial resources could be used to achieve critical public policy objectives related to climate change mitigation and economic development. The federal government can also choose to “grandfather” allowances to the polluting firms by handing them out free based on historic or projected emissions. This would give the most benefits to those companies with higher baseline emissions that have historically done the least to reduce their pollution."

Link

He is declaring war on investors, entrepreneurs, small businesses, large corporations, and private-equity and venture-capital funds.
That is the meaning of his anti-growth tax-hike proposals, which make absolutely no sense at all — either for this recession or from the standpoint of expanding our economy’s long-run potential to grow.

Considering all the loop holes that big Corporations use to get out of paying almost any taxes, I say just enforce the laws on the books and I'll be happy.
"Most corporations, including the vast majority of foreign companies doing business in the United States, pay no income taxes, according to a Government Accountability Office report released Tuesday.

During the eight-year period covered by the report, 72 percent of foreign-owned corporations went at least one year without owing taxes, and the same was true for 55 percent of domestic corporations.

Small companies were much more likely to pay no taxes than larger companies. Still, more than 3,500 large domestic corporations - with more than $250 million in assets or $50 million in gross receipts - did not pay taxes in 2005.

The report said about 80 percent of the companies studied paid no taxes because they didn't generate any profit after expenses. Money-losing companies can legitimately owe no tax, and others can use provisions of the tax code to lower or eliminate their liability.

But the lawmakers who sought the data seized on the report as proof of corporate gamesmanship.

"It's shameful that so many corporations make big profits and pay nothing to support our country," said Byron L. Dorgan , D-N.D., who requested the report along with Carl Levin , D-Mich. "The tax system that allows this wholesale tax avoidance is an embarrassment and unfair to hardworking Americans who pay their fair share of taxes. We need to plug these tax loopholes and put these corporations back on the tax rolls."

The report covered the period from 1998 through 2005. During that time, corporate income taxes as a share of gross domestic product dipped, from 2.2 percent in 1998 to 1.2 percent in 2003, the lowest share since 1983. But receipts jumped after that, hitting 2.7 percent in 2006 and 2007, according to the Office of Management and Budget. That was the highest share since the late 1970s.

The GAO report also found that foreign-owned corporations were somewhat more likely to report no income than domestic corporations. There are several possible reasons for that. Foreign corporations may be younger, and startups are more likely to have no net income after expenses. They may also be in industries with lower profit margins.

Another possibility could be the use of transfer pricing, which companies use to account for transactions between subsidiaries in different countries. Creative, rule-stretching use of transfer pricing can allow companies to push their profits into lower-taxed jurisdictions. The report does not attempt to examine whether illegal transfer-pricing caused the difference between foreign and domestic companies.

But companies looking for lower-taxed jurisdictions often take profits out of the United States. The country's 35 percent top rate on corporate income is among the highest in the industrialized world.

Many tax experts and lawmakers from both parties, including Ways and Means Chairman Charles B. Rangel , D-N.Y., and presidential candidate Sen. John McCain , R-Ariz., have called for lowering the corporate tax rate. Lawmakers are likely to differ on what revenue-raising measures, if any, should be paired with a corporate rate cut.

In addition, Levin, Finance Chairman Max Baucus , D-Mont., and other senators have been trying to close the "tax gap," the difference between taxes owed and taxes collected.

In a statement, Baucus said, "I'm committed to finding ways to improve compliance and reduce taxpayer burden so that we begin to bridge the tax gap, which accounts for $345 billion in legally owed but uncollected federal revenues each year."

He said the GAO report "shows yet again the need for full-fledged [tax] reform next year...."

"We are constantly reviewing the tax code to find ways to crack down on those who are trying to avoid paying their fair share, without placing undue compliance or reporting burdens on honest taxpayers. As part of this on-going effort, we are reviewing the GAO report to see what it might suggest about where to target tax gap efforts," Baucus said."
Link

[scamper]

Just remember there is no middle class in a socialist economy.

[kwame k]

Just remember there is no middle class in a socialist economy.

Yeah I know! Thank God Bush is gone.

[Combat Ready]

"What is Cap and Trade?
The goal: To steadily reduce carbon dioxide and other greenhouse gas emissions economy-wide in a cost-effective manner.


The profits: If the federal government auctions the emissions permits to the companies required to reduce their emissions, it would create a large and dependable revenue stream. These financial resources could be used to achieve critical public policy objectives related to climate change mitigation and economic development. The federal government can also choose to “grandfather” allowances to the polluting firms by handing them out free

We'll agree to disagree on faith in the Federal Government to determine who profits, and who does not.


As far as the lawmakers listed to lead the way:

Levin--Yeah--Levin is the right guy to lead the way. How are things in Michigan nowadays? 50th in unemployment? How long has he been in office?

Hell yeah--put him in charge of cap and trade. Maybe he can duplicate the big 3's success.

Supposed tax expert Ways and Means Chairman Charles Rangel , D-N.Y

Really? Seriously?


No thank you!

[kwame k]

Never said to put them in charge.....I see you jumped all over the quotes by various senators but not over GAO report itself.
The point was and still is Corporations pay next to nothing in taxes, period. Close the fucking loop holes and we'll see 100's of millions of dollars coming back.

As far as cap and trade goes, it worked with sulfur admissions why can't it work again?

I hear a lot of whining and crying about how this is going to fuck the middle class and how Democrats are going to tax and spend. Same fucking GOP song and dance, scare tactics. Which is funny because they may not of taxed but they sure as fuck spent. 1.3 Trillion Dollars.

The middle class are getting a tax cut and that will ruin America how? Small businesses are getting help and this will ruin America how?

[Combat Ready]

Never said to put them in charge

True.

Just referencing Rangel as a tax expert is enough for me to call "bullshit"---Sorry.

Talk about a fucking hypocrite...He's the poster boy.

[kwame k]

True.

Just referencing Rangel as a tax expert is enough for me to call "bullshit"---Sorry.

Talk about a fucking hypocrite...He's the poster boy.

Just remember that link was to a 2005 GAO report. I didn't want to post the full GAO report and it was used just to make the point about Corporate taxes.

[Nickdfresh]

Oh fucking please!!

What's Obama going to do? Wreck the economy by being a greedy asshole? I fucking he wages a jihad on these motherfuckers!!!

[Nickdfresh]

Just remember there is no middle class in a socialist economy.

Apparently there's no middle class in this economy either...

[Combat Ready]

Just remember that link was to a 2005 GAO report. I didn't want to post the full GAO report and it was used just to make the point about Corporate taxes.

Understood...And I appreciate your viewpoint.

We just disagree on the federal government's potential role and confidence to administer such a scheme...um, I mean---program.

[Combat Ready]

Apparently there's no middle class in this economy either...

Yes, there is. Probably 90% of us posting here are middle class. What do you say--Middle class 40k to 100k per household?

[kwame k]

Understood...And I appreciate your viewpoint.

We just disagree on the federal government's potential role and confidence to administer such a scheme...um, I mean---program.

Not really, it's the fucking government, they could fuck up a wet dream.