Yes, that’s correct. President Barack Obama wants Congress to pass the George W. Bush tax cuts before they sunset on Dec. 31, 2012. There is one exception, however. The president wants to raise taxes on those persons making more than $250,000. If Congress and the president fail to come to an agreement and the tax structure for all Americans returns to the taxes of the Clinton era, “The tax cliff is a growth killer,” according to the Wall Street Journal.
“The United States faces an economic collapse thanks to massive tax increases on Jan. 1, and continued deficit spending for years on end,” the Journal states.
Expiration of the Bush tax cuts, and the additional tax of the Obamacare will send the nation into a tail-spin.
The top tax rate would jump from 35 percent to 39.6 percent, plus and additional 0.9 percent for Medicare and a return of the 2 percent payroll tax that has been temporarily on hold. That would raise the tax rate to 42.5 percent for the top wage earners.
“Great!” Those who have bought into the president’s class warfare plan would finally get even with the rich.
Hold on a minute. In addition to the increase in taxes for top earners, there will be an increase in the rate paid on dividends: from 15 percent to 43.4 percent, according to the Journal. That applies to working and retirees.
“In all, federal tax increases total almost $500 billion per year on a static-revenue basis,” the Journal noted.
What’s the big deal?
“The blunt reality is that we cannot have a prosperous economy when government is overspending, raising tax rates, printing too much money, overregulating and restricting the free flow of goods and services across national boundaries,” the Journal opined.
Okay, so we tax the rich. We tax companies. We tax everything that moves. However, we don’t tax 50 percent of the citizens of this country now. Who’s left to tax? The middle class — those persons hit hardest by this recent deep recession.
In the end, if we continue to tax and spend, one thing is certain — there will be fewer people able to pay taxes and eventually companies will take the hint and move out of the U.S. Then we lose more jobs. We lose tax revenues. When there are none left to pay the taxes needed to keep a growing government going, there is a financial collapse.
Americans have been avoiding harsh realities far too long. We are only months away from realizing our worst nightmare if our government fails, again, to control spending and reduce the tax burden on all Americans.