The New “Tax Deal”

“I’m not willing to let working families across this country become collateral damage for political warfare here in Washington,” opined President Obama, after agreeing not to raise taxes on the American people.

Too bad he didn’t think of collateral damage to the working families of this country when he signed the bogus health care bill or the financial regulation bill, both of which were packed with onerous taxes and fees adversely impacting the working families of this country.

On November 18th, Mr. Obama warned that if the government piled up too much debt it could lead to a double dip recession. On December 7th, Mr. Obama claimed “we don’t have the danger of a double dip recession.” On December 9th, Lawrence Summers, Mr. Obama’s chairman of the White House National Economic Council, predicted an increased risk of a double dip recession if Congress does not pass the “tax deal.” It is obvious confusion reigns at the White House.

And what is the “tax deal? “The “tax deal” has nothing to do with tax cuts. The only issue was whether there would be a tax increase on the highest wage earners: another act of discrimination and hatred against successful Americans by progressive-socialist Democrats. Divide and conquer: pit black against white; pit Hispanics against blacks and whites; pit the poor against the successful; transfer wealth from those willing to work to those who are not. This is the standard playbook of the Democrats.

Yesterday, the tax rates Congress passed under President Bush were a bad thing because they did not encourage work. Today, the same rates are a good thing and without continuing the Bush tax rates the economy could stall. Confusion is the one constant at the White House.

Democrats in Congress are furious that Obama agreed to a tax package with Republicans. Democrats hold that not increasing taxes on those taxpayers making above $250,000 annually will cost the government $700 billion. How so?

As a government of the people, for the people and by the people, how can a tax savings to the people be a cost to government? It can’t. This fact reveals the utter tyranny underlying the progressive-socialist strategies: government is superior to the people, and the government is not of, for and by the people, but actually works against the will of the people.

Extending the tax rates to all Americans means there is no change in current tax policy. The people avoid a tax increase. The government cannot lose what it did not have: there is no increase in the deficit. There is no cost to government. And since there is no change in tax policy, there is obviously no stimulus in the tax deal.

Capital gains tax rates are extended. Again, no tax increase to the people. No cost to government.

Dividend rates are extended. Again, no tax increase to the people. No cost to the government.

What is the cost of the “tax deal?” It is not even near the $1 trillion hyped by the Democrats; it’s closer to $200 billion based on the payroll tax deduction ($120 billion), unemployment insurance extension ($60 billion) and miscellaneous tax credits, all offset by $11-30 billion in estate tax revenue.

What does this bill actually do for the American people? Nothing! The uncertainty of the business community about the economic outlook has not been resolved. The economy is not helped. Unemployment is at 9.8%.

So why do we see such political theater? It is a function of progressive-socialist class warfare against successful wage earners. It is also a function of House Democrats being kept out of the negotiations between Republicans and Mr. Obama.

The House Democrats, in reaction, have spent two days adding billions of dollars of waste to the proposed tax deal, stating they will not bring Obama’s proposal to the floor of the House. The end result may well be no tax deal in December and a major tax increase in January, which may be preferable in the long run.

If this scenario occurs, the Democratic Party will be irreparably damaged and the Republican majority in the House will have to act quickly in sending a bill to the Senate permanently extending the existing tax rates in order to avoid sending the United States into a double-dip recession: a “tax deal” Mr. Obama cannot refuse.