Wrecking The Economy Is NOT Patriotic
OBAMA'S TAXES COULD WRECK ECONOMY
By DICK MORRIS & EILEEN MCGANN
Published on DickMorris.com on September 22, 2008
Whatever is left of the economy after the current round of crisis interventions by the Fed could go down the drain if Obama is elected and carries out his plans for sharp increases in taxation.
Even if Obama does not understand the linkage, most Americans do and will turn sharply against Obama's tax plans if McCain hammers away at the risk they pose for us all.
During the Great Depression, Congress raised taxes sharply in the Revenue Act of 1932. The top rate went from 25% to 63%. As a result, the real GDP dropped by 13.3% and unemployment rose from 15.9% to 23.6%.
In 1990, Bush-41 famously broke his "read my lips - no new taxes" pledge of the 1988 campaign and raised the federal gasoline tax, federal excise taxes, and imposed 10% surtax on the top income bracket, raising its taxes to 31%.
The recession which followed in 1991-1992 cost him re-election.
It is obvious that increasing capital gains taxes by a minimum of one-third and possibly doubling them, both of which Obama has proposed during his campaign, would send a clear signal to investors to keep their money under the mattress.
Who would buy stock now knowing that the tax on any profits he or she will make is going to go up sharply if Obama becomes president.
Look at what happened just last year in Michigan. Democratic governor Jennifer Granholm raised taxes on almost everything in 2007. Income taxes shot up 11.5% and the state's 6 percent sales tax was expanded to dozens of new services like investment advice, janitorial services, landscaping, ski lifts, carpet cleaning, and tanning.
The $1.75 billion tax package shook the economy to its foundations. Michigan became the only one of the fifty states with a shrinking gross domestic product (GDP). The value of all goods and services produced in the state fell by one half of one percent while the national GDP rose by 3.4%.
The state fell from 23rd in GDP to 35th.
Taxes caused a disaster.
In a strong economy, Obama's tax hikes would raise questions.
In a weak economy, they portend a catastrophe.
It would be like bleeding a sick patient, the medicine of two hundred years ago, depriving him of blood even as he needs more not less circulating through his arteries.
McCain's populist rhetoric, including his pledge to fire SEC Chairman former Congressman Christopher Cox, is important for a Republican candidate. But his focus should shift to the tax issue.
With firms suffering, withering, and dying for a lack of capital, tax increases on those who invest would be a horrible mistake.
Americans will realize this obvious fact and McCain should use it to gain the advantage in discussing the economy.
There is no reason for the economy to work to Obama's advantage when he is committed to a doctrinaire program of tax increases and spending hikes. McCain can use the issue to run rings around him.
Go to DickMorris.com to read all of Dick's columns!
By DICK MORRIS & EILEEN MCGANN
Published on DickMorris.com on September 22, 2008
Whatever is left of the economy after the current round of crisis interventions by the Fed could go down the drain if Obama is elected and carries out his plans for sharp increases in taxation.
Even if Obama does not understand the linkage, most Americans do and will turn sharply against Obama's tax plans if McCain hammers away at the risk they pose for us all.
During the Great Depression, Congress raised taxes sharply in the Revenue Act of 1932. The top rate went from 25% to 63%. As a result, the real GDP dropped by 13.3% and unemployment rose from 15.9% to 23.6%.
In 1990, Bush-41 famously broke his "read my lips - no new taxes" pledge of the 1988 campaign and raised the federal gasoline tax, federal excise taxes, and imposed 10% surtax on the top income bracket, raising its taxes to 31%.
The recession which followed in 1991-1992 cost him re-election.
It is obvious that increasing capital gains taxes by a minimum of one-third and possibly doubling them, both of which Obama has proposed during his campaign, would send a clear signal to investors to keep their money under the mattress.
Who would buy stock now knowing that the tax on any profits he or she will make is going to go up sharply if Obama becomes president.
Look at what happened just last year in Michigan. Democratic governor Jennifer Granholm raised taxes on almost everything in 2007. Income taxes shot up 11.5% and the state's 6 percent sales tax was expanded to dozens of new services like investment advice, janitorial services, landscaping, ski lifts, carpet cleaning, and tanning.
The $1.75 billion tax package shook the economy to its foundations. Michigan became the only one of the fifty states with a shrinking gross domestic product (GDP). The value of all goods and services produced in the state fell by one half of one percent while the national GDP rose by 3.4%.
The state fell from 23rd in GDP to 35th.
Taxes caused a disaster.
In a strong economy, Obama's tax hikes would raise questions.
In a weak economy, they portend a catastrophe.
It would be like bleeding a sick patient, the medicine of two hundred years ago, depriving him of blood even as he needs more not less circulating through his arteries.
McCain's populist rhetoric, including his pledge to fire SEC Chairman former Congressman Christopher Cox, is important for a Republican candidate. But his focus should shift to the tax issue.
With firms suffering, withering, and dying for a lack of capital, tax increases on those who invest would be a horrible mistake.
Americans will realize this obvious fact and McCain should use it to gain the advantage in discussing the economy.
There is no reason for the economy to work to Obama's advantage when he is committed to a doctrinaire program of tax increases and spending hikes. McCain can use the issue to run rings around him.
Go to DickMorris.com to read all of Dick's columns!
Labels: McCain Palin 08
posted by RD at 9:54 AM
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6 Comments:
I have to admit, this post got me thinking you may have a point, until I started looking at the actual facts and compared them to the case you try to make. And in contrast to your post, I'm giving references to the facts I'm stating.
During the Great Depression, the Revenue Act of 1932 raised taxes across the board. Obama's tax plans calls for a raise in taxes for the top 1.1% percent of the American working force.. So unless you're making more than $603,402 annually, your taxes are not going up... You can ease up on the McCainorade.
If you were making 0-$4,000 annually in 1932, you were paying 4%-8% back in taxes... HUGELY different from Obama's plan. Obama plans to increase taxes on the upper ONE POINT THREE percent of the salary bracket (those Americans making more than $603,402 a year). These are the Americans who can AFFORD to toss in a nickle and dime to help the economy. Under Obama's plan, if you're making $0-$226,981, you're seeing a return. If you're making $0-$111,645, you'll get back a heck of a lot more than you would under McCain's plan.
"The top rate went from 25 percent to 63 percent".
Well, actually it went from 4-63 percent, but who's counting, it was a long time ago. Regardless, McCain's average cut would be -2%, Obama's would be -0.3%... Seriously, do you think people don't look up the facts when they're faced with voting for a president who has a daunting task ahead of them cleaning up the mess Bush Jr has left us with??
McCain, if you look at the numbers is planning on sending EVERY American worker a return on taxes. How in the world is he going to pay for that?? You want to talk about an economy going down the drain?!? How can you ignore this BLATANT problem with John McCain's tax plan???
On to Bush in 1990... as you said, Bush raised taxes, although it was not his tax increase that caused the recession.. Quite the contrary. Do some research (or jog your memory) and you'll remember it was the recession that came first, making it impossible for him to keep his word as he assumed the economic growth that started in the 80s would continue when he made his "no new taxes" promise at the '98 RNC. It was only AFTER the recession began that Bush raised taxes. Bush's tax increase brought the tax on the wealthy up to 31 percent (in contrast to 18 percent increase to the top 1.5% as detailed in Obama's tax plan)
If Bush Sr would have been a man of integrity with foresight and sound judgement, he would have been upfront about the possible necessity to tax SOMEBODY, instead of raise taxes to %31 after realizing his promise was impossible to fulfill two years into his presidency, causing possibly even a slower turnaround from the recession that had already begun and been reported prior to his tax increases.
Please cite your source regarding Obama's "plan" to increase capital gains "by a minimum of one-third and possibly doubling them"
You can argue till you're blue in the face that Obama's tax on those making more than $226K a year provides no added incentives for work, savings, investment or business expansion, but what about the opportunities that are given to America's working middle-class that has been running at full speed with a ten ton brick in it's pocket. Obama's tax benefits to this middle class tax bracket empowers the working class, those with intrinsic skill sets that can't even pay the bills yet. If you're rich, lazy and resting on your laurels, guess what. You're about to be replaced by someone smarter, younger and harder working than you. There's a FLOOD of entrepreneurs fighting an uphill battle (who can't wait to replace you) in this economy that has done nothing but allow the government to provide loopholes for the rich to keeo their wealth and power... and unless you've been sleeping under a rock, you can see where that's gotten our economy.
Regarding the economy, lets not blank out the fact that John McCain admitted to The Wall Street Journal on November 26, 2005 that "I know a lot less about economics than I do about military and foreign policy issues. I still need to be educated." It's interesting, seeing that John McCain is a member of NONE of the Senate Committees (or subcommittees) on foreign affairs, yet Obama is a member of not only the Senate Committee on Foreign Relations, but also the subcommittees on European Affairs, African Affairs, East Asian Affairs and Pacific Affairs. McCain is a member of none of the above.
Furthermore, we have the energy crisis. A topic those annoying democrat liberals have been crying about for decades. Now suddenly alternative energy is a platform the republican party is running on. Give me a LARGE break.
Im an independent voter who votes on ISSUES not partisan loyalty. It's blatantly clear to me who is getting my vote this November, and I hope you consider it too. Barack Obama clearly has the better judgement of the two. I welcome you to try to change my mind with distractions, but when I look at the cold facts and compare the two men's judgement and putting their money where their mouth is, Obama wins across the board.
LOL... Obama has not yet put his "money where his mouth is" as you say, all he has done to this point is "run his mouth" and has done zero.
He had said he would repeal the Bush Tax cuts... that is a tax increase anyway you slice it.
Increasing taxes on the rich as democrats love to say... only increases prices on the poor and democrats know it.
"the rich" are business owners and what happens when you raise taxes on business?
Answer: Prices increase accordingly.
ohhh and if you read the very first sentence in the article you cite... it was written by former Clinton advisor Dick Morris... not me. That is the source.
-red
Increasing taxes on the richest might initially drive up prices, which will be a shot in the foot when lower cost alternatives become available due to the tax breaks allowed for the under-funded entrepreneurs and innovators kept in the proportionately larger middle class. Out with the old, in with the new.
McCain's tax plan offers NO incentive for providing a stream of new innovation into our markets.
I see that your blog entry was copied and pasted from Dick Morris, but he did not site any of his sources regarding his historical references.. probably because he was afraid to find he was dead wrong when he went to look it up, like I did. He still hasn't answered to that on my comments I had to pay him $25 (which he originally removed) to post either.
There is no evidence to support your idea that small independent business can produce products ("lower cost alternatives") at a lower cost than large corporations. So your entire premise is flawed.
As far as your being "independent" and voting on the issues... lets see about that.
Since it appears as though you are supporting Barack Obama...
You believe winning the war in Iraq was a mistake and that we should invade Pakistan and put our efforts into Afghanistan where there are no known Al Qaeda bases located.
You favor increasing taxes, increasing the size of government while decreasing our military and loading the supreme court up with liberals... while not enforcing immigration laws or rewriting them to allow our southern border to virtually not exist.... also if you support Barack Obama you have no intention of ever owning a gun and want the government to take ours away.... while opposing the death penalty you support late term and post birth abortions.
Does that about sum up your stand on "the issues"?
Okee... so you're saying that competition in an economy does not lower prices. How far did you get in highschool??
As far as the rest of your post, you're wasting your time detracting from my point.
I'm talking to you about the economy.
Not sure what you're reading, but I did not say anything competition not being necessary.
There are ways for small businesses to compete with big companies... but price isn't often the way to accomplish that goal. Small companies generally are able to compete due to their being able to provide a better or more specific service rather than a price advantage.
So you point of saying that favoring small business over big bizness will lower prices is flawed... i stand by that statement.
I'm talking about the economy too and socialist principals and capitalist based economy doesn't work... thus the problem democrats are having figuring out what to do right now.
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