I remember when “60 Minutes” wasn’t so warm ‘n cuddly. Sunday night Ben Bernanke dodged a question by simply saying “It’s difficult to make predictions.” The interviewer let it go.
I might have responded to Bernanke by pointing out that the president seems to have no problem making predictions with great precision and in great quantity. So maybe Bernanke’s incompetent by comparison, or is the president a looney or liar? How would Bernanke respond to that?
After all, the president has, at different times, predicted crisis becoming irreversible catastrophe, told Americans it was safe to go back in the stock market water, and that he would create, oops, create and save 3-million jobs. During the campaign he predicted precisely when we would exit
One of the most interesting campaign promises was that tax cut for the middle-class.
There was a lengthy report in the Sunday New York Times on March 15, quoting sources in Congress and in the Obama administration, including Peter Orszag, the president’s budget director. It seems the plan of treating employer provided health insurance and benefits as taxable income and requiring the employees receiving it to pay taxes on it is gathering steam, and the president won’t oppose it. Like the budget laden with 9,000 earmarks that Mr. No-More-Earmarks signed, or the new No-Lobbyists-Policy he violated while the ink was still damp, Obama would accept and sign such legislation into law even as he insists there should be free health care for all. But then what he says seems never to be what he means. Deciphering the president isn’t hard. He’s an Opposite Talker. Whatever he says, odds are he’s doing the opposite.
You may recall that this tax-health-benefits scheme is the exact same idea Senator McCain proposed and was vilified for. To be clear, this is a new income tax on “ghost income” of the middle class. The income is in benefits provided by the employer, but no money has moved from employer to employee. However, the value of those benefits is to be taxed as income, requiring that employee to dip into his pocket and hand over cash to the government.
During the campaign, an Obama advertisement called this “a multi-trillion dollar tax hike.” It would almost certainly be the largest tax increase on the middle class ever by any honest measurement. At least, that’s what President Obama called it when he was against it during his campaign, and since he’s the smartest president ever, he must have been right about that.
About 70 percent of the 253-million people who do have health insurance get some or all of it provided by employers, and employer-provided health care benefits 3/5ths of the population under age 65. But didn’t Obama claim he was only going to increase taxes on the filthy rich five percent with incomes over $250,000? Wasn’t that the target group the president promised to tax into oblivion, to pay for everything he’s promised to everybody else?
Beware the politician bearing gifts. Especially one with a big, toothy grin.
There’s another big tax on the middle class coming too. The president is creating it day by day. It requires no legislation or executive order. It is the monstrous inflation guaranteed to eventually follow the wild-eyed spending sprees past, present, and yet to come. Obama recently warned us of needing more federal money for banks and toxic asset purchasing and the other mysterious manipulations he and his financial wizards deem necessary. Congress is talking up a second stimulus package.
The bill for all this will be 12 percent, maybe 15 percent, maybe 18 percent inflation. It imposes a higher tax the less income one makes. Lowest earners spend 100 percent+ of their income after other taxes on necessities, so 12 percent inflation equals a 12 percent income tax hike. Mid-income earners may spend only 70 percent of their after tax income on necessities, so 12 percent inflation equals an 8.4 percent income tax hike. High income earners spend a tiny bit of income on necessities so inflation goes barely noticed.
Truth is, the president’s plans are chock full of new taxes on the middle class. His promise to raise taxes only on the rich is a monstrous, bald-faced lie.
I have a prediction: if he proceeds unchecked, when he’s done, the middle class will bear the greatest combined tax burden they have ever experienced.
Dan Kennedy is a serial entrepreneur, adviser to business owners, sought-after speaker and author of 13 books. More information about Dan can be found at www.NoBSBooks.com, and a free collection of his business resources including newsletters and webinars at www.DanKennedy.com.