WhatFinger


Cradle to grave, Lavish entitlement programs, higher taxes

Democrats have BIG PLANS



Now that the country is drifting ever so slightly left and the Republicans are in what appears to be total disarray, the Democrats are seeing a chance to seize power.

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Their long-range game plan, they hope, will amount to a virtual coup d’etat, as they promise to take care of their constituents from cradle to grave, with lavish entitlement programs that range from a Canadian-style government healthcare monopoly to prescription drugs for everyone to universal preschool programs and subsidized college tuition. They’re betting that these social programs will make voters dependent on their party and thus keep them in power in perpetuity. Of course, paying for these new programs will be a snap, or at least so say some of their presidential candidates, who claim that reversing the Bush tax cuts for the rich would easily provide enough revenue. But if we examine the new tax plan released by the House Ways and Means Committee (of which the illustrious Charles Rangel, D-NY is chair), it’s clear that it’s going to take a heap of additional tax money. Rangel proposes to repeal the Alternative Minimum Tax (AMT) and raise taxes on the rich across the board to make up for the loss of revenue. The AMT was initially introduced in 1970 to counter all the tax loopholes that wealthy families were using to substantially reduce their tax burdens. The tax was not indexed to inflation and as the years have passed, more and more individuals and families earn substantial portions of their annual incomes from sources that are taxed under the AMT. Repealing this tax would, in effect allow the government to redefine “the rich”. Rangel proposes to levy a 4.6% surtax on adjusted gross incomes of over $500,000 per annum, which he believes will make up the difference. It will also raise the top federal tax rate back to 39.6%. However, the Rangel plan has some hidden bombs. The Bush tax cuts are expected to expire in less than 4 years and when they do, the top marginal tax rate will jump to 44.2%. Add in state, local and other taxes and the U.S. top marginal tax rate will be among the highest in the world. A second, and even bigger bomb is that Rangel’s plan is expected to be revenue neutral, meaning that all those promises being made by Democrat presidential candidates will have to be funded from new taxes. History has demonstrated repeatedly that raising taxes tends to have a dampening effect on the economy, while the obverse happens when taxes are lowered. For some reasons, the Democrats can’t seem to get the relationship between lower taxes and a buoyant economy straight. John F. Kennedy, Ronald Reagan and George W. Bush, have all clearly demonstrated that lower taxes result in good economic times. Rangel’s plan, then will probably result in a broad-based tax increase if the Democrats take the White House next year and retain control of the Congress. Imposing their programs on the hapless American taxpayers will very likely backfire in that the economy will suffer and grumpy voters will let the Dems know how they feel. It will take another Republican sweep to repair the damage.


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Klaus Rohrich -- Bio and Archives

Klaus Rohrich is senior columnist for Canada Free Press. Klaus also writes topical articles for numerous magazines. He has a regular column on RetirementHomes and is currently working on his first book dealing with the toxicity of liberalism.  His work has been featured on the Drudge Report, Rush Limbaugh, Fox News, among others.  He lives and works in a small town outside of Toronto.

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