Catastrophe - Dick Morris [20]
Politically, Obama is making sure to gouge only the top wage earners in the nation. But economically the impact of these hikes will be huge. It’s that top 1 percent who pay 41 percent of all income taxes in the United States; the top 5 percent pay more than 60 percent.63
Upper-income taxpayers are also the biggest spenders. By hitting them as hard as he is, Obama is ensuring that they won’t be lured into spending by his stimulus proposals but will realize that they just presage the tax increases down the road.
Upper-income taxpayers must feel a bit like hogs at the Chicago stockyards—being fattened with stimulus spending so they can be slaughtered with tax increases two years down the road…all to make a nice breakfast for the federal government.
CLASS WARFARE BECOMES GOVERNMENT POLICY
More and more, President Barack Obama is turning American politics into a pitched battle between those who pay taxes and those who live off them.
It’s the tax payers vs. the tax eaters.
Under the guise of a stimulus package to bring the economy out of its recession, the Obama administration is reworking the fundamental politics of our country, passing out checks like heroin to create a constituency addicted to public handouts, and concentrating the tax burden of paying for it all on a smaller and smaller number of Americans. A larger percentage of the American population is paying no income taxes at all and few other levies, making them unlikely to complain when taxes are raised on those who do. At the same time, they’re getting checks from Washington as part of a concerted effort to build a constituency that supports big government and big handouts.
The social consensus that used to underlie public policy making in the United States has melted down. In the past, when we voted to embark on new spending, we understood that we’d all have to share the burden. And we accepted that. We all agreed that the rich should pay more and the poor less, but we knew we’d all have to shoulder some of the freight. To a great degree, we followed the Marxist maxim “From each according to his abilities and to each according to his needs.” But everyone had to contribute something!
Even before Obama took office, this basic construct had begun to fracture. On the day he became president, 43 million American households—roughly a third of all households in the country—were paying no federal income taxes at all.64 In fact, most of those people got checks from the government.
But when Obama’s tax program is fully implemented, a majority of Americans will be exempt from paying any federal income taxes. And, instead of a tax bill most of them will get checks from Washington every year.
Under the guise of cutting taxes and “making work pay,” Obama is effectively putting a majority of Americans on welfare.
This isn’t entirely new, of course. The government has long handed out checks to large segments of our population. Economists call these payments “cash transfers.” At first these checks targeted specific groups of people, mainly the elderly and the disabled—those who had paid into the Social Security system all their working lives. Veterans who had served our country in the military received pensions and other payments. Others who got government checks include those who were especially needy, such as unemployed single mothers trying to raise small children and people whose incomes were so low they need food stamps to maintain an adequate diet.
Washington also showered its largesse on us by granting tax deductions (which cut our taxable income) or credits (which cut our actual tax bill). If we gave to charity, paid a home mortgage, or shelled out money for local taxes, we got to deduct the payments on our income tax returns. But the rule was always the same: you could reduce only the taxes that you had actually paid. If you made a charitable contribution but earned so little that you didn’t have to pay any income taxes,